The appellant lodged an appeal against the Registrar’s decision to withdraw his authorisation/the license of the FSP, as it failed to pay its levies. The appellant lodged an appeal more than 4 months after the Registrar’s decision.
The Financial Services Board Act (FSB Act) states that an appeal must be lodged within 30 days of the person becoming aware, or ought to have become aware, of the decision. In this case, the period for the appellant to lodge his appeal had prescribed as it was out of the 30 day period.
The appellant submitted that he only became aware of the Registrar’s decision upon a visit to the FSB months later. He states that he did not receive any letters informing him of the notice of intention to withdraw or the actual withdrawal of the licence. The Registrar applied a ‘reasonable person’ test to determine whether or not the appellant ‘ought to have become aware’ that the licence was withdrawn.
Firstly, the Registrar sent all of the notices as well as the final decision to withdraw the FSP licence to the appellant’s correct address as submitted in its licence application form. These notices were all sent via registered mail to the appellant’s postal address on the FSB’s records but were returned to the Registrar’s office unclaimed. The parcel tracking receipt also indicates that one of the letters has still not been collected by the appellant.
The Appeal Board highlighted:
- That the onus is on an FSP to ensure that it collects its correspondence sent by the Registrar to the address on record as submitted on its application.
- It is the duty of the FSP to inform the FSB, within 15 days, of any change within the FSP. No such changes were communicated to the Registrar.
- The FSP failed to pay the prescribed levy, knowing that the consequences of non-payment is the possibility of the withdrawal of its licence.
- From the evidence it is clear that the notices and letters were delivered but not collected by the FSP.
- The Appeal Board agreed with the Registrar’s view that the appellant might have known what he was to be confronted with on uplifting the mail from his postal box. The appellant failed to explain why he did not collect the notices from his postal box, neither did he deny receiving the postage slips from the identified postal address.
Based on this evidence, the appellant ought to have known of the registrar’s decision of cancelling its licence in the month that the letters were sent to the postal address. The registrar’s notification was delivered on/about 8 July 2015 and the appellant had 30 days from that date to lodge its appeal.
Key Learning Points:
- The onus lies on the Key Individual and/or FSP to ensure that the FSP’s details are kept up to date at all times. Each Key Individual and Sole Proprietor can register and access the FSP’s online profile on the FSB’s website to check that the information is correct.
- The FSB must be informed of changes within 15 days. The FAIS Online System on the FSB’s website makes profile changes a paperless and, in some cases, instant process which is not complicated. It is important that Key Individuals familiarise themselves with this process to ensure that any profile changes are made timeously. In a recent FAIS Newsletter (Volume 20) the FSB warned FSPs that the “Registrar of FSPs will henceforth, impose a penalty on the FSPs who fail to adhere to this requirement as she deems fit.”
- The case dealt with S26(2) of the FSB Act and addresses the difference between ‘became aware’ and ‘ought to have become aware’. The mere fact that an FSP does not collect its post does not preclude it from responsibility. It is reasonable to assume that an FSP will collect its post upon receipt of a postage slip. The registrar has the ability to show that it has delivered the notices. If the FSP’s address is correct, then it will become very difficult to justify why the notices were not received. It will be deemed that an FSP ‘ought to have known’ of a notice if it cannot be proved to the contrary.