Secondary

Debarment Process under Review

The Financial Sector Regulation Bill (FSRB) is a huge document comprising 17 chapters, 242 sections and is 136 pages long. There are, in addition, 4 schedules and 70 pages of proposed amendments or repeals to 15 existing laws – including the FAIS Act, 2002, writes Alan Holton of Compliance Monitoring Systems CC.

Of particular interest to readers will be proposed changes to the debarment process which is currently a huge headache for the Regulator and FSPs alike, particularly as far as representatives are concerned.

Before effecting a debarment, a provider will be required to ensure that the debarment process is lawful, reasonable and procedurally fair by following the process set out in the Bill.

These processes require a provider, before debarring a person, to give adequate notice in writing to the person of its intention to debar the person, the grounds and reasons therefor and any terms attached to the debarment.

The FSP must provide the representative with a copy of the provider’s written policy and procedure governing the debarment process and give the person a reasonable opportunity to make a submission in response.

The FSP must consider any response from the representative and may thereafter decide to debar or not to debar the person. Whatever the decision, the FSP must notify the person in writing of the provider’s decision, the grounds and reasons for such decision and details of the right of appeal to the Tribunal that will be established in terms of the Financial Sector Regulation Act.

A most welcome inclusion in these proposed amendments is a new provision whereby any person who feels aggrieved by a decision of a provider to debar that person will be able to appeal to the Tribunal established in terms of the Financial Sector (Regulation) Act.

The lack of recourse currently experienced by so many representatives will hopefully be addressed by these proposed changes. According to a media release by the National Treasury in December 2014, the revised third version of the Bill is expected to be published for tabling in Parliament before the end of June 2015.

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