A former financial services employee discovered she had been debarred only when a prospective employer’s compliance check prevented her appointment, more than two years after the debarment was imposed.
In a decision dated 19 August 2026, the Financial Services Tribunal set aside the debarment by Moso Consulting Services (Pty) Ltd, finding that the financial services provider failed to follow the statutory process required before debarring a representative and appears to have treated debarment as an automatic consequence of an employment disciplinary finding.
The Tribunal’s decision highlights the distinction between an employment disciplinary process and a debarment process, and the consequences for an FSP that fails to comply with the requirements of section 14 of the Financial Advisory and Intermediary Services Act.
The employee was debarred on 12 April 2024, the same day as a disciplinary hearing. She was not notified of the debarment and only became aware of it when a prospective employer conducted a compliance check following a successful interview and told her that the appointment could not proceed. She promptly applied to the Tribunal for reconsideration.
Because the application was lodged about 26 months after the debarment, she also sought condonation. The Tribunal granted it, noting she had never been notified of the debarment and that the delay was a consequence of the very failure about which she complained. Her explanation was accepted by Moso Consulting, which did not oppose the application and consented to the removal of the debarment.
The fact that the application was unopposed did not, however, mean that the Tribunal could simply grant the relief.
The Tribunal said a debarment is the exercise of a statutory power, is recorded on a public register, and exists for the protection of the public. The parties therefore could not dispose of the matter by agreement, and the Tribunal was required to satisfy itself that there was a proper basis for setting aside the debarment.
Failure to follow the debarment process
The Tribunal found that Moso Consulting had not complied with section 14(3) of the FAIS Act.
Before effecting a debarment, an FSP must give adequate written notice of its intention to debar, the grounds and reasons for the proposed debarment, and any terms attached to it. It must also provide its written debarment policy and procedure, give the person a reasonable opportunity to respond, and consider that response before making its decision. The person must then be notified of the decision and their rights to challenge it.
None of this happened.
The employee received notice of a disciplinary hearing on two allegations of gross misconduct. But the notice made no reference to possible debarment, the fit-and-proper requirements, or her alleged status as a representative.
The Tribunal drew an important distinction between the two processes.
A person receiving notice of an employment disciplinary hearing would understand that their employment was at risk. They would not necessarily understand that their ability to render financial services anywhere in the industry was also at risk.
The employee was therefore not given notice that debarment was contemplated, nor the grounds and reasons for the proposed debarment. She was not provided with the FSP’s written debarment policy and procedure and was never given an opportunity to address the question of whether she should be debarred.
The failure went further. There was no evidence of a separate debarment decision.
The disciplinary hearing and debarment took place on the same day, while the written disciplinary outcome, issued six days later, made no mention of debarment. The Tribunal concluded that the only reasonable inference was that the debarment followed automatically from the finding of guilt.
This was contrary to the FSCA’s Guidance Notice 1 of 2019, which cautions that an FSP cannot simply debar someone based on the outcome of a disciplinary hearing without complying with section 14(3).
Moso Consulting also failed to notify the employee of the debarment or of her rights under Chapter 15 of the Financial Sector Regulation Act. She consequently remained excluded from the industry for more than two years without knowing that she had been debarred.
Merits were not determined
The procedural defects were sufficient to dispose of the application, so the Tribunal did not determine whether the underlying conduct justified debarment.
It nevertheless recorded several concerns about the substantive case.
The first disciplinary charge concerned an alleged failure to carry out an instruction relating to a municipal client. The Tribunal said this could not sustain a finding that the employee lacked honesty and integrity. The available evidence suggested that verification depended on the co-operation of a third party, which had confirmed that the volume of enquiries exceeded its capacity. Whatever failure the conduct might have represented, the Tribunal said it was a performance issue rather than dishonesty.
The second charge concerned the transmission of medical scheme members’ personal information to the employee’s personal email account.
The Tribunal regarded this as potentially more serious. Depending on the circumstances, unauthorised transmission of personal information could support a conclusion that a person no longer met the honesty and integrity requirement.
But the record did not contain the assessment necessary to reach that conclusion. There was no ruling, reasoned decision or separate finding on the charges. The Tribunal also noted that the identifiable decision-maker had been involved in several stages of the disciplinary process.
These observations should not be read as a finding that the employee was not guilty of the underlying allegations. The Tribunal expressly declined to determine the merits because the procedural defects were dispositive.
Was she a representative?
The Tribunal identified a further, potentially fundamental problem: the record did not establish that the employee was a “representative” to whom the section 14 debarment power applied.
Her position was Manager: Customer Services, and her undisputed description of her duties was largely administrative. The record did not contain her employment contract, mandate or the representative register that the FSP is required to maintain.
The FAIS Act excludes people who perform clerical, technical, administrative or similar services in a subsidiary or subordinate capacity where those services do not require the exercise of judgment or lead a client to a specific transaction.
The Tribunal therefore said that, on the description of her duties, this exclusion might apply. Her description as a representative on the debarment notification form was an assertion, not proof.
No opportunity to start again
Ordinarily, a procedurally defective decision may be set aside and remitted to allow a lawful process to be followed. The Tribunal found this would serve no lawful purpose in this case.
Moso Consulting did not seek remittal, consented to the removal of the debarment, and declined to defend it on the merits. More importantly, no debarment process had been commenced in accordance with section 14(3).
Even assuming that the employee had been a representative, her status would have ended, at the latest, when her employment was terminated on 12 April 2024. Section 14(5) requires a debarment process concerning someone who is no longer a representative to be commenced within six months. That period expired on 12 October 2024.
The Tribunal therefore concluded that remittal would serve no lawful purpose and set aside the debarment without remitting the matter to Moso Consulting.
