Tag archives: FAIS

The Role and Powers of the FAIS Ombud

By Donald Dinnie on February 22, 2022 Posted in Finance

This Supreme Court of Appeal judgment in The Ombud for Financial Services Providers and C S Brokers CC and Others [2021] ZASCA 117 is a reminder that section 20 of FAIS created the office of the Ombud as a mechanism for the speedy resolution of disputes which would otherwise be dealt with in court. A … Continue reading

Ombud must apply appropriate processes to disputes of fact

By Patrick Bracher (ZA) on December 3, 2021 Posted in General, Insurance

In November 2021 the Financial Services Tribunal emphasised that “time and again it has been pronounced that when there is a material dispute of fact, there should be a hearing of oral evidence”. It is only once the material disputes of fact are addressed that one can conduct an enquiry into the negligence, causation and … Continue reading

FAIS Exemption of banks in respect of certain clients extended to 30 June 2023

By Patrick Bracher (ZA) on July 28, 2021 Posted in General

The exemption under the FAIS Act of registered banks from the need to comply with the FAIS Act in respect of certain sophisticated or major clients has been extended once again to 30 June 2023. The exemption relates to clients who are another bank, a South African insurer, a foreign bank or similar business, a central … Continue reading

FAIS Ombud must determine jurisdiction before determining complaints

By Donald Dinnie on June 18, 2021 Posted in Finance

In April 2021, the Supreme Court of Appeal dismissed the review of determinations made by the FAIS Ombud established in terms of the Financial Advisory and Intermediary Services Act of 2002 (FAIS Act). The SCA was called upon to decide whether the Ombud had committed a reviewable error in determining complaints lodged by the respondents. … Continue reading

Lawful, reasonable and procedurally fair FAIS debarment process

By Desiree Reddy (ZA) on December 9, 2020 Posted in General

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 … Continue reading

FSCA clamps down on FICA non-compliance

By Desiree Reddy (ZA) on July 28, 2020 Posted in Banking

Financial services providers (FSPs) registered under the Financial Advisory and Intermediary Services Act 2002 fall within the ambit of ‘accountable institutions’ under the Financial Intelligence Centre Act 2001. As accountable institutions, these FSPs are obliged to comply with the FIC Act and are subject to oversight by the FSCA. The FSCA has recently investigated compliance with … Continue reading

POPI compliance – have you considered your existing data protection measures?

By Desiree Reddy (ZA) and Claire Friedman on July 3, 2020 Posted in General

The majority of the Protection of Personal Information Act 2013 (POPI) effectively commenced on 1 July 2020. The sections that commenced deal with how personal information (which is any information that can identify and infringe the privacy rights of a natural or juristic person) may be processed in South Africa or transferred across borders. As POPI … Continue reading

Difference between advice and information provided by a professional (for example a broker) – English law

By Patrick Bracher (ZA) on April 23, 2019 Posted in Insurance

English law relating to professional negligence draws an interesting distinction between whether the professional person is giving information or giving advice. This is not specifically part of South African law but it is relevant when considering liability, for instance, of brokers under the FAIS Act. The difference is between providing information for the purpose of … Continue reading

Asset management in South Africa – Ten things to know

By Shawn Barnett (ZA) on March 18, 2018 Posted in Banking

1. Licensing of asset managers South African asset managers must register as financial service providers (FSPs) with the Financial Services Board (FSB) under the Financial Advisory and Intermediary Services Act (FAIS). Any person carrying on asset management business in South Africa, or from abroad directed at South African clients, whether in a discretionary or non-discretionary capacity … Continue reading

FAIS debarment does not entitle dishonest representative to damages

By Patrick Bracher (ZA) on September 26, 2017 Posted in General

A financial services provider debarred an employee and representative (who had taken up other employment whilst still employed and lied about it) without giving the representative notice and a fair hearing in terms of the Promotion of Administration Justice Act (PAJA) before doing so. The representative sued for damages for lost income based on this … Continue reading

Failure to respond to complaint lodged against FSP

By Raynold Tlhavani (ZA) on May 11, 2016 Posted in General

The January 2016 determination of the Ombud for Financial Service Providers in Johannes William van Breda v Alesio Mogentale & Another is a good reminder of the powers of the Ombud where an FSP fails to respond to a complaint made against it. The complaint arose from a failed investment into a product known as … Continue reading

The duty of financial service providers

By Raynold Tlhavani (ZA) on May 9, 2016 Posted in Insurance

The December 2015 determination of the Ombud for Financial Service Providers in De Hoop Steenwerwe v Finmar Makelaars reminds us of the duties imposed on FSPs by the FAIS Act and the FAIS General Code. Central to the complaint in this case was the FSP’s failure to update the sum insured under the business interruption section of … Continue reading

FAIS Act debarment is industry-wide

By Patrick Bracher (ZA) on August 26, 2015 Posted in General

If a financial services provider debars one of its representatives in terms of section 14(1) of the FAIS Act 2002 on grounds relating to honesty and integrity, the debarment means that the representative is debarred on an industry-wide basis from rendering financial services to the investing public. This issue was dealt with by the Supreme Court … Continue reading

FAIS Act debarment is subject to procedural fairness

By Patrick Bracher (ZA) on August 25, 2015 Posted in General

Where an FSP takes action to debar a representative, the representative must be given the right to make submissions in their defence. The representative must be put in possession of information that will render the right to make representations real. The nature of the charges against him or her have to be spelt out. Secondly, … Continue reading

Right to intermediary commission

By Patrick Bracher (ZA) on January 28, 2015 Posted in Insurance

The Retail Distribution Review has reminded us that in 2010 the appeal court in Maree v Chris Booysen t/a NVM Beleggings & Versekeringsadviseurs found that the long-term intermediary was not entitled to an advice fee. Earnings were restricted to a fee for services as intermediary under the Long-term Insurance Act. The matter went through three … Continue reading

Is providing leads an intermediary service?

By Patrick Bracher (ZA) on January 26, 2014 Posted in Banking, Insurance

An intermediary for the purposes of the FAIS Act and the Short-term Insurance Act is someone who acts as a go-between interposed between a client and product supplier whose acts directly result in a financial transaction, for instance a policy, being entered into. That means that someone supplying leads that may indirectly result in a … Continue reading