New FIFA Regulations on Intermediaries - The main differences with the previous Player’s Agents Regulation

The FIFA Executive Committee approved, on March 2014, the new Regulations on Working with Intermediaries that will replace the previous Player’s Agents Regulation.

The intention, with the entry into force of this new regulation, is to break with the present model of the players’ agents activity and changing it completely.

This is illustrated in particular by the fact that the name itself has changed to “intermediary”.

This new Regulation, which will come into force on April 1, 2015, is the result of widespread discussions and a very lengthy and extensive consultation procedure with all the relevant members of the international football community, and its main objective is to propose a new system that is more transparent and simpler to administer and implement, resulting, in turn, in better enforcement at national level, through each member association. 

One of the main innovations brought by this Regulation is the implementation of a registration system in contrast to licensing system that lasts until nowadays.

The main differences between both Regulations – New FIFA Regulation on Intermediaries and the Player’s Agents Regulation – can easily be listed as follows:

I. SCOPE (ART. 1º)

The scope of the Regulations concerns services of intermediaries provided to players and clubs to conclude employment contracts or transfer agreements.

II. GENERAL PRINCIPLES (ART. 2º)

Players and clubs must act with due diligence when selecting an intermediary. This principle is complied with if the Intermediary Declaration (cf. Annexes to the Regulations) is completed and signed by the intermediary.

III. REGISTRATION SYSTEM (ARTS. 3º E 4º)

Each member association shall put in place a registration system (similar to TMS that already exists for the registration of international players transfers) whereby intermediaries shall be registered for every individual transaction they are involved in, whether a natural person or a legal person.

So the measures being taken must fulfil certain conditions:

a) All intermediaries will have to complete the “Intermediary Declaration” in which they confirm adherence to the applicable statutes and regulations of FIFA and those of the confederations and member associations when carrying out his activities, his impeccable reputation, his compliance with disclosure requirements, etc.;
b) The “Intermediary Declaration”, duly completed, shall be submitted to the member association where the intermediary is registered (which requires, at least, a registration in the correspondent association);
c) The representation contract concluded between the intermediary and his client also needs to be deposited both in the association where the client is registered as in the intermediary.

This declaration constitutes an essential element of the new Regulations as by signing it the intermediary certifies his impeccable reputation for this activity.

IV. REPRESENTATION CONTRACT (ART. 5º)

In any representation contract concluded with an intermediary, clubs and players shall specify, in writing, some minimum details, such as:

a) Scope of the services to be provided;
b) Nature of the legal relationship they have between them;
c) Names;
d) Duration of the contract;
e) Remuneration;
f) General terms of payment;
g) Signatures; and
h) Other relevant information agreed by the parties.
 
V. DISCLOSURE AND PUBLICATION (ART. 6º)

The new Regulations also contain enhanced provisions for transparency purposes in activities involving intermediaries, which implies, for the involved parties, specific disclosure requirements with respect to payments made to intermediaries, contracts and agreements with intermediaries, etc.

By way of illustration, member associations are required to make publicly available on an annual basis the names of all intermediaries they have registered. 

VI. PAYMENTS TO INTERMEDIARIES (ART. 7º)

In an attempt to provide for an overall rationalisation of fees paid to intermediaries, as a recommendation, the new Regulations set a limit of 3 % of the transaction value on the remuneration payable to intermediaries, which is calculated in accordance to the service provided, as follows:

a) The intermediary remuneration acting in behalf of a player may not exceed 3 % of the agreed player's basic gross income during the contract period;
b) The intermediary remuneration acting in behalf of a club, in order to sign an employment contract with any player, may not exceed 3 % of the agreed player's basic gross income during the contract period; and
c) In case of conclusion of a transfer agreement, the intermediary remuneration may not exceed 3 % of the transfer compensation.

A stricter approach has also been incorporated in relation to transactions involving minor players, prohibiting in this case any payments to intermediaries.

VII. CONFLICTS OF INTEREST  (ART. 8º)

As a general rule, conflicts of interest shall be avoided.

However, the new Regulations provide for the possibility of disclosure, in writing, of any potential conflict of interest by the intermediary.

If, prior to the start of the relevant negotiations, written agreement is obtained by all the parties concerned, in particular the clubs and the player, dual representation would become permissible, provided that the parties agreed, also in writing, which one (player or club) will pay the intermediary remuneration – which excludes, in theory, the double payment to the intermediary!

VIII. SANCTIONS (ART. 9º)

The responsibility for sanctioning parties that violate the applicable provisions lies mainly with the member associations.

IX. ENFORCEMENT OF THE OBLIGATIONS OF ASSOCIATIONS (ART. 10º)

FIFA shall monitor the proper implementation of the minimum standards or requirements by the associations in order to ensure compliance.

It is important to emphasise, once again, the break with the past regarding the agents’ activity, not just because the change of name, but mainly by setting up a new mandatory registration system for intermediaries, in opposition to the current licensing system. It is also important to refer the abandoning of the compulsory insurance system and the possibility for legal persons to act as intermediaries, in contrast with the former provisions, where this activity only was allowed for natural persons.

In fact, it looks like this new regulations implements a more transparent system, where the member associations will assume a key role regarding the proper compliance with the provisions set forth therein, especially in the case of an activity where constantly hovered an atmosphere of suspicion.

It is now a matter of waiting to know what will be the real impact of the new regulations on the football market, which will only be possible to verify after its entry into force on April 1, 2015.

Guilherme Belfo Pereira