The New FIFA Agent Regulations: Explained
After years of debate and discussion between FIFA and other football governing bodies since the deregulation of agents in 2015, the new era of football agent regulations has begun. Today, the 9th of January, 2023, marks the first day of which the newest FIFA Football Agent Regulations (FFAR) comes into force. The major points to note for these new regulations concern caps placed upon commission fees, the new centralised FIFA clearing house system, the prohibition of multiple representation and the updated licensing system which includes the requirement of passing an exam devised and internationally distributed by FIFA.
In this blog, we will provide a comprehensive and clear guide as to everything that an agent needs to be aware of with the new FFAR implementation. It is absolutely vital that agents that are already in the industry and those wishing to become a part of it, have a complete understanding of the implications that the new regulations will have for them and how to adhere to them to avoid legal issues and other problems throughout their career.
Licensing and the Exam
According to the new FFAR, there are several steps that must be adequately completed in order for a candidate to obtain their licence to operate as an agent. These core steps are as follows:
- Comply with eligibility criteria
An applicant must first complete a licensing application via the FIFA or National Association platform. Part of this process outlines the eligibility requirements that a candidate must comply with. This includes details such as possessing no criminal record and other ‘proper persons tests’.
NOTE: These requirements must also remain to be complied with throughout the entire period of time that the individual operates as an agent. Failure to do so will result in a revocation of an agent’s licence.
These eligibility requirements are set out below:
- No false or misleading statements within the candidate’s application.
- Zero criminal charges and convictions regarding all matters.
- Must not be a recipient of a suspension, disqualification or striking off order by a sporting governing body or regulatory authority.
- No record of failure to comply with rules relating to ethics and professional conduct.
- Must not be an official or employee of FIFA, a confederation, National Association, League, Club or any body that represents the interests of clubs. (The only exception to this is where an applicant has been appointed or elected to a body of one of these entities in a capacity of representing the interests of Football Agents).
- Must not hold any interest in a club, academy or league.
- Must not have been performing the services of a football agent without a licence prior to submitting their application.
- Must never have been personally bankrupt or been a majority shareholder in a business that declared bankruptcy, entered administration or undergone liquidation.
- Must not have been a part of a sports betting company or organisation in the year preceding the application.
Compliance with these requirements will be investigated and regulated by FIFA themselves.
- Pass the exam
FIFA’s new regulations demand that individuals wishing to obtain an agency licence must pass the newly formatted exam. The exam will be open-book but is only available in the three main football languages; English, Spanish and French. The must-know details of the agent exam are summarised below:
- Candidates that are confirmed as eligible will be invited to attempt the examination in their National Association allocated venue.
- Candidates may have to pay a fee to take the exam.
- FIFA will set the dates and frequency of the exams for candidates. It is currently understood that there will be two a year in March and September. The first exam will take place on the 19th April 2023. The deadline to apply for this will be the 15th March.
- The exam is structured as 20 multiple choice questions to be answered in 60 minutes (3 minutes per question). They will ask candidates to consider different scenarios and case studies and require you to select the single best answer to each question or situation. The pass mark is yet to be officially stated but it is expected to be 75% or 15 correct answers out of a possible 20.
- The questions will be based upon FIFA legislation only rather than specific national association laws. The six key documents that will be covered are as follows:
- FIFA’s agent regulations: As discussed previously, these are all the new regulations that have been implemented as well as those that are still relevant and applicable from previously. This covers everything from commission and representation contracts to representing youth players and exclusivity. It is expected that 15 of the possible 20 questions will be based on these regulations, whilst the remaining five questions are based on the below.
- Regulations of the Status and Transfer of Players (RSTP): This is the most important of FIFA documents that outlines registration of players, contractual matters, compensation, third party influence and jurisdictions.
- FIFA Statutes: Details the legislation and general rules and regulations for the operations of FIFA.
- FIFA Code of Ethics: This outlines rules of conduct within football as well as the sanctions and disciplinary measures that can arise from it. It also includes the procedures and methods of adjudication in disputes.
- FIFA Disciplinary Code (FDC): A wider and more intricate report regarding various disciplinary sanctions and infringements from doping and assault to forgery and corruption. It also explains the various bodies and organisations involved in sanction procedures.
- FIFA Guardians – Child Safeguarding Toolkit: Refers to education on the protection of minors and players.
Note: For agents that passed the previous exam that was conducted prior to the deregulation in 2015, they will not be required to sit the new exam but they are required to continue to meet annual educational requirements outlined by FIFA. For agents who have obtained their licence after 2015 and wish to continue to operate, they will be given until the 1st October 2023 to pass the exam and adhere to the newest licensing system.
- Pay the licensing fee
This fee will now be paid directly to FIFA rather than to a national association. Therefore, the fee is also standardised and universally set by FIFA (this has not been specified as yet). Failure to pay the annual licensing fee will nullify a candidate’s status as an agent or they will not receive their licence in the first place.
- Receive the licence
This grants the ability to conduct football agent services. This will then remain valid as long as the candidate continues to meet the eligibility criteria and the annual fees. Additionally, FIFA is introducing a Continuing Professional Development (CPD) education system which requires the agent to annually demonstrate that they are maintaining and updating their level of knowledge of relevant regulations to continue to possess a valid licence.
Note: The processes listed above will come into force on the 9th January for obtaining a licence. However, FIFA has facilitated for a ‘transition period’ for football agents that already have their licence. This provides a window until the 1st October 2023. By this time, it will be mandatory that any agents used in a transaction must be licensed under the new FFAR and sufficiently capped as explained in the next section.
Commission Caps and the FIFA Clearing House
As part of the new regulations, FIFA have installed commission caps, primarily to keep as much money as possible in the game. The hard commission restrictions implemented by FIFA for agent services in a single transaction are as follows:
Putting the table into simple terms:
- Individual refers to the agent acting on behalf of the player (the individual) as the client. If the player’s annual remuneration is above $200,000 (or the same amount in another currency), the agent is entitled to 3% of this figure. If it is below $200,000, the agent is entitled to 5%.
- The engaging entity simply means the ‘buying club’. If the player’s annual salary is above $200,000, the agent is entitled to 3% of this figure from the buying club; or 5% if it is below $200,000.
- If prior written consent has been given by each party, and the agent represents both the player and the buying club (the only permitted form of multiple representation) the commission percentage is doubled. If the player earns less than $200,000 annually, the agent is entitled to 10% of this, 5% from the player and 5% from the club. If the salary is over $200,000, the agent is entitled to 6% (3% from the buying club, 3% from the player).
- Finally, if the agent represents the selling club (releasing entity) as their client, they will be entitled to 10% of the transfer compensation, regardless of the individual’s remuneration.
Note: if there are multiple agents involved in one service provision, this does not entitle the agent to a commission fee any more than the relevant capped percentage in total.
Additionally to the implementation of commission caps and in the interest of enhancing the financial transparency of all global transfers and transactions that take place, FIFA have developed and established a centralised ‘Clearing House’. The clearing house requires that all transactions within the football transfer system to be passed through and documented by this single and universal clearing house. Hence, agent commission fees and remuneration will also be paid directly from here.
Part of the FFAR addresses multiple representation and aims to combat the issues of conflict of interests and other moral and legal questions that were previously raised through the practice. The changes made by FIFA are as follows:
- An intermediary should only perform his/her services on behalf of one party. There is only ONE exception to this rule (2)
- The agent can legally act on behalf of the individual player and the engaging club ONLY if the following criteria is met:
- Both parties are made aware of the conflict of interests that will arise as a result.
- The details of both contracts, including the terms of service and the terms of remuneration are fully disclosed to each party.
- Both parties have the right to seek independent legal advice on the matter.
- The player must have a pre-existing representation contract with the agent, lodged with the National Association.
- This means that the agent is not entitled to simultaneously represent the buying club and the selling club; the selling club and the player; nor ALL THREE PARTIES.
First and foremost, the primary purpose of these new regulations is to prevent instances where the agent was able to represent all three parties. They also minimise the conflicts of interest that would occur in dual representation agreements. FIFA suggested these changes as a sign of intent to achieve the fundamental principles that must be met in order to improve the football industry and to increase the transparency of agents and transactions. Instead of relying upon National Associations to make their own judgements on dual representation, FIFA has attempted to synchronise and coordinate the regulations to create a more robust and consistent system. The new regulations incur sanctions and penalties if they are violated and if an agent is found to have committed a ‘misconduct offence’.
Note: Penalties include punishments such as loss of remuneration for the agent from affected parties and potentially the revokement of a licence to operate.
Unchanged but Important Regulations to Know
As well as the major new regulations that have been implemented. The rest of the FFAR also contains regulations that are vital to be aware of. Some of the most significant of these are summarised below:
- National football associations will have until the 30th September 2023 to implement and enforce their own agent regulations. However, FIFA can also request that they be submitted for review before they are passed to ensure they adhere to the FFAR.
- Agent services may only be performed for a client having entered into a written Representation Agreement.
- A representation agreement is limited to a duration of a maximum of 2 years. Automatic renewal clauses are prohibited.
- An agent’s approach to a minor in relation to football agent services may only be made no more than six months before the minor reaches the age at which they may sign their first professional contract and as long as prior written consent has been obtained by the legal guardian.
- An agent may not approach a client that is already bound by an exclusive representation agreement with another football agent before the final two months of the existing contract.
- The FIFA Disciplinary Committee and Ethics Committee are responsible for imposing sanctions for any infringements on the regulations.
We hope that this is a useful summary to everyone that is researching the FIFA Football Agent Regulations that came into force today. Below we have recommended some further reading:
- FIFA FOOTBALL AGENT REGULATIONS
- WATCH: The New Agent Regulations Explained
- Capping Commissions (July 2021)
- Multiple Representation (July 2021)
- The Exam (July 2021)
To read a more in-detail exploration of the new FIFA Agent exam, click here.