On 1 April 2018, the debarment process under the FAIS Act was amended by the Financial Sector Regulation Act 9 of 2017 (FSRA). Since then, many debarment cases have been referred to the Tribunal. In some cases, the outcome was that the debarments have been uplifted and in some it was remitted back to the FSP for reconsideration and to follow the prescribed debarment steps. In order to provide more guidance, the FSCA published Guidance Notice 1 of 2019 on 6 June 2019, to clarify the role of all parties in this process.
Almost two years down the line it seems that most FSPs are adhering to the steps. However, the latest published application for reconsideration of such a decision points out that debarred persons should not ignore communication and put their head in the sand, especially if they feel they were treated unfairly.
The applicant was employed as a representative of the respondent, Tracker, a financial services provider. While a disciplinary hearing was in the air, the applicant resigned on 1 March 2019. As a result, the FSP informed him on 19 April of their intention to debar him in terms of section 14 of the Financial Advisory and Intermediary Services Act 37 of 2002 and provided him with the underlying documents.
However, the applicant did not respond within the given time nor did he take any further action to defend himself against a debarment. Therefore, he was debarred on 16 May and because of difficulties in reaching him, the FSCA was informed of the debarment on 3 December 2019.
The applicant filed an application for the suspension and upliftment of his debarment 10 December 2020, alleging that he had only become aware of the debarment on 7 December.
Tracker filed an affidavit in answer to the application and pointed out that they attempted to reach out to the applicant on various occasions – telephonically, via WhatsApp, email and even registered mail. As the applicant failed to respond to any of the notifications, the debarment was sent to the FSCA on the 3rd of December 2019. Interestingly, the email address used by the applicant appears on the face of it to be the same email address that he was using to approach the Tribunal.
“The applicant did not file a response to dispute these allegations and they must, accordingly, be taken as being correct. This means that the application is time barred and no grounds, even as to the merits, for condonation have been set out. In fact, the applicant’s allegations that he was not notified that after his resignation there would be a process or hearing for debarment and that the debarment was processed without his knowledge are, on his own papers, untrue,” the Tribunal states.
As a result of these findings the application for setting aside the debarment was dismissed by the Tribunal.
In the Tribunal notes, Deputy Chair, LTC Harms highlights the application of Board Notice 82, the Determination of Requirements for Reappointment of Debarred Representatives, 2003.
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