Anyone embarking on a FAIS process to debar a financial service provider or representative would do well to read a recent Financial Services Tribunal decision setting out what constitutes a lawful, reasonable and procedurally fair process. The matter is Mothei v Advicecube (FSP35/20).
The decision sets out the statutory and regulatory basis for debarment proceeding under section 14(2) of the FAIS Act and reminds us of the existence of the Guidance Note 1 of 2019 on the debarment process. The decision emphasises the distinction between the debarment process and any disciplinary proceedings relating to the contract of employment governed by the Labour Relations Act.
The debarment proceedings themselves are governed by the right to lawful, reasonable and procedurally fair administrative action in the Bill of Rights and the right to a fair public hearing, which is fundamental to a just and credible legal order.
The person accused of lacking honesty and integrity, contravening the FAIS Act or failing to meet fit and proper requirements must be informed of the purpose of the hearing and the charges levelled against them and they must be given an opportunity to respond to the allegations with sufficient time to prepare for the hearing.
In this case the debarment was set aside for lack of due and fair process and remitted back to the former employer for reconsideration in a proper manner.