The FSCA’s Guidance Notice 1 of 2019 clarifies the requirements for debarment as described in Section 14(3) of the FAIS Act with which an FSP must comply when debarring a person. The Guidance Notice also outlines the FSCA’s role in the process.
Role of the FSP
When a debarment has been affected, the FSP must –
- notify the FSCA within five days of the debarment; and
- provide the FSCA with the grounds and reasons for the debarment within 15 days of the debarment.
Click here to access the prescribed Notification of Debarment Form.
Role of the FSCA upon receipt of notification of debarment
The FSCA does not review, approve or confirm a debarment of a representative by an FSP. The administrative action is complete once the debarring FSP takes a decision. The FSCA merely records the fact that a debarment has occurred in the register for debarred representatives which is published on the FSCA’s web site in terms of section 14(7) of the FAIS Act. Neither the recording of the debarment in the register nor the publication thereof translates into an administrative act.
The FSCA is therefore not required to engage with a debarred person in order to afford such person an opportunity to make submissions on why the debarment should not be recorded or published. A person who is dissatisfied with such an action can refer the matter to the Financial Sector Tribunal and should be informed of this right in the actual debarment notification, referred to above.
The FSP is required to inform the FSCA of the reasons for the debarment to enable the Authority to –
- consider the possible referral of the representative’s actions for criminal investigation or enforcement action as contemplated by section 167 of the FSR Act;
- have relevant information as to the debarment when approached regarding the reappointment of a debarred representative by another FSP and to assess whether or not there has been compliance with all the requirements for the re-appointment;
- satisfy itself that due process was followed by the FSP and that the debarment relates to compliance with provisions of the FAIS Act, in the absence of which possible regulatory action against the FSP may follow.
Click here to download Guidance Notice 1 of 2019 (FAIS).