TRIBUNAL DECISION: DEBARMENT PROCESS MUST COMPLY WITH FAIS ACT

A recent application (Malcolm Winston Hendricks and Overberg Wealth and Risk Management (Pty) Ltd) was brought before the Financial Services Tribunal following the debarment of a representative by an FSP. The representative was debarred on the basis that he was engaged in conduct that conflicted with the requirements of honesty and integrity. The representative was also dismissed from employment.

The representative brought the application on the basis that a debarment hearing was never held and as such he was never given an opportunity to respond to allegations that resulted in his debarment. The FSP’s argument that the notice in respect of the disciplinary hearing sufficed as notice of debarment was rejected by the Tribunal.

The Tribunal found that the hearing held was a disciplinary hearing, not a debarment hearing. Section 14 of the FAIS Act sets out the procedure the FSP must follow to debar its representatives. FSPs may not debar representatives in any other way than in the prescribed manner. The FSP had failed to ensure that the debarment process was lawful, reasonable and procedurally fair. The decision was set aside, and the matter remitted to the FSP for further consideration.

Please take note of the above and contact your compliance officer at ICS should you have any queries regarding the debarment process.

GET IN TOUCH

If you would like to find out more about the services that ICS offers please contact us.