This blog was co-authored by Anathi Xaba, a candidate attorney.
In February 2025, the Financial Services Tribunal upheld an FSP’s decision to debar its representative, finding that the lack of a written debarment policy of the FSP did not undermine the overall fairness of the process followed. Procedural fairness does not require strict adherence to every formal requirement as long as the individual is afforded a fair opportunity to respond.
Prior to leaving his employment, the applicant sent 53 emails containing 895 attachments of confidential information regarding the FSP’s clients to his personal email address. Although the investigation confirmed that no third parties received the information, the applicant was found guilty of misconduct and was subsequently dismissed. In the debarment proceedings the FSP cited the applicant’s failure to meet the fit and proper requirements outlined in the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) and Board Notice 194 of 2017, and accused the applicant of dishonesty, lacking integrity and incompetence. The facts were undisputed in the debarment proceedings.
Section 14(3)(a)(ii) of the FAIS Act sets out that “a financial services provider must provide the person with a copy of the financial services provider’s written policy and procedure governing the debarment process”. An argument raised by the applicant was that the FSP failed to provide him with a written debarment policy which prejudiced his ability to respond effectively to the debarment proceedings. The FSP had instead attached a “debarment guide” in its notice of intention to debar the applicant.
Despite finding that the FSP did provide the relevant debarment policy, the Tribunal held that the absence of a written debarment policy is not necessarily fatal to a procedurally fair process ‘’because: (i) the provision of section 14(3)(a)(ii) is not couched in negative terms; (ii) there is no sanction or injunction attached to this provision; and (iii) the scope and object of the provision, which is to avail a fair process to the applicant, appear to have been achieved”, dismissing the applicant’s procedural challenge.
The Tribunal made important remarks in relation to the merits of the debarment proceedings. The question was not whether “the applicant intended to disclose the information to third parties or send it to the respondent’s competitors, but rather whether he can be trusted with sensitive information belonging to his employer and will accurately fulfil the responsibilities and obligations of a financial service provider.” The Tribunal confirmed the debarment.