This blog was co-authored by Kristen de Wet, Candidate Attorney
On 4 April 2022, the Financial Services Tribunal in JHE Murray v FSCA, held that there exists no requirement in terms of the legislative framework that obliges the Financial Sector Conduct Authority (FSCA) to conduct a formal hearing before making administrative decisions. Consequently, reconsideration applications brought on the grounds of failure by the FSCA to conduct a formal hearing when making a decision, are not likely to succeed.
Section 153 of the Financial Sector Regulation Act, 2017 empowers the FSCA to make a debarment order where a natural person has contravened a financial sector law in a material way. Despite no formal hearing being required when issuing these orders, the FSCA is required to follow the debarment process and provide the person allegedly in contravention with reasons for every proposed decision, as well as an opportunity for such person to make submissions, within a reasonable timeframe.
The FSCA took the decision to debar a representative of a financial service provider (FSP), where clear evidence illustrated non-compliance with the Fit and Proper requirements under the Financial Advisory and Intermediary Services Act, 2002 and followed the required debarment process. A representative of an FSP is a person who is authorised to render a financial service to clients for or on behalf of a FSP in terms of an employment or any other mandatory agreement.
In response to the debarment, the representative lodged a reconsideration application with the Tribunal on the basis that the FSCA committed multiple administrative and procedural irregularities which included a failure to convene a formal hearing. The Tribunal held that no formal hearing is required, provided the FSCA followed the debarment process. The FSCA’s debarment order was upheld.