In the previous issue of Mastering Compliance, we published the new contact details and updated Rules of the Financial Services Tribunal (Tribunal) which took effect on 1 August 2019. In this issue we take a closer look at the Tribunal and the Rules.
The Tribunal was established in terms of section 219 of the Financial Sector Regulation Act (FSRA) and came into effect on 1 April 2018 when it replaced the FSB Appeal Board. The Tribunal is responsible for the reconsideration of decisions made by decision-makers, such as the Ombud, the Financial Sector Conduct Authority (FSCA) or even a Financial Services Provider (FSP) and provides for a new ‘appeal’ route for an aggrieved party.
FSPs may sometimes find themselves on the wrong side of a FAIS Ombud Determination or regulatory action by the FSCA or a Rep may be dissatisfied with an FSPs decision to debar him/her. The Tribunal provides them with an avenue for the decision made against them to be reconsidered independently. However, if an FSP or a Rep (for example) wants to approach the Tribunal, they should understand the parameters within which the Tribunal has to operate and the various steps and timelines which they need to follow. A decision made against them could have far reaching financial and/or reputational implications and following the Rules carefully will give them a better chance of being heard.
Members of the Tribunal
The Tribunal consists of highly experienced legal experts appointed by the Minister of Finance. The Tribunal members must include:
- At least two retired judges or persons with suitable expertise and experience in law; and
- At least two other persons with experience or expert knowledge of financial products, financial services, financial instruments, market infrastructures or the financial system.
Powers of the Tribunal
The Tribunal is only able to perform its function in accordance with the FSRA and any relevant financial sector laws, such as FAIS for example. The powers of the Tribunal are set out in section 234 of the FSRA. The Tribunal can either:
- set aside a decision and remit the matter back to the decision-maker for reconsideration; or
- dismiss the application; or
- set aside a decision and substitute it with a decision of its own. However, this option may only be used when the decision relates to:
- Administrative Penalties in terms of Chapter 13 of the FSRA;
- A decision by an FSP to debar a person;
- A decision by a market infrastructure in terms of the Financial Markets Act; or
- A decision prescribed by Regulation.
The Rules of the Tribunal
The Financial Services Tribunal Rules (Rules) sets out the rules and procedures to be followed in an application for reconsideration of a “decision” by the “decision-maker”.
In terms of the Rules, an application for reconsideration must be made:
- Within 30 days after receiving the reasons for the decision from the decision-maker, if the applicant requested reasons; or
- In all other cases, within 60 days after the applicant was notified of the decision or such longer period provided good cause is shown.
What must the application contain?
The application for reconsideration must contain the decision letter and statement of reasons including any annexures provided to the applicant by the decision-maker. It must also include the full particulars of the grounds on which the application is based and must cite all other parties to the decision. Where an application is filed out of time, it should include the aspect of condonation.
Format of application
The Rules contain the format in which the application for reconsideration must be drafted. This is prescribed in Form A, B and C as contained in the Rules.
Form “A” must be used if the decision is in favour of another party.
Form “B” must be used where the decision affects only the applicant.
Form “C” must be used where the FAIS Ombud refuses leave to appeal in terms of S28(5)(b)(ii) of the FAIS Act.
Lodgement of the application
An application for reconsideration must be lodged with the Secretariat of the Financial Services Tribunal and all the other parties to the decision. Remember to use the new address details and new email address of the Financial Services Tribunal as communicated in our previous issue of Mastering Compliance.
Once the application for reconsideration has been submitted to the Secretariat, there are a number of other processes which follow.
For more details on these processes and the Rules, read the Financial Services Tribunal Rules.
A person who wishes to approach the Tribunal should understand the type of decisions which the Tribunal is allowed to make in the particular circumstances and must ensure that the timelines and various steps are followed closely.