A representative leaves under a cloud. Section 14 of the FAIS Act tells a brokerage what to do, in what order, and inside which deadlines to notify the FSCA.
A representative resigns three days after a client phones to say a premium she paid in cash never reached the insurer. The principal accepts the resignation, removes the name from the register of representatives, and moves on. Six weeks later the FSCA asks why a person the brokerage knew had misappropriated premiums is selling policies for someone else down the road.
That is the gap section 14 of the Financial Advisory and Intermediary Services Act 37 of 2002 exists to close. Debarment is not a disciplinary option a brokerage may take or leave. It is a statutory duty, triggered by facts rather than by an employment outcome, and it comes with a sequence and a set of clocks. Get the sequence wrong and the debarment is set aside on reconsideration; skip it altogether and the brokerage has failed a duty of its own.
Section 14(1) says an authorised FSP must debar a person who is or was its representative, or the key individual of a juristic representative, where the FSP is satisfied on available facts and information that the person no longer meets the fit and proper requirements referred to in section 13(2)(a), or has contravened or failed to comply with the Act in a material manner.
Two limits on that duty matter in practice, and both come up repeatedly at the Financial Services Tribunal.
The first is the knowledge test in section 14(1)(b): the reasons for the debarment must have occurred and become known to the FSP while the person was still its representative. Conduct you only discover at a new employer's request, long after the person left, is not yours to act on.
The second is that debarment is not a substitute for discipline. Missed targets, a poor persistency book, an argument with a branch manager, a CCMA dispute you would rather not have — none of these are grounds. The question is honesty and integrity, competence and operational ability, or a material breach of FAIS. If the misconduct would not have kept the person out of the register in the first place, it will not support a debarment.
Both limits point at the same operational problem: you need to be able to show what happened, when it happened, and when you learned of it. That is a records question before it is a legal one, and for most brokerages the records now live in chat.
The order below is the one the FSCA and the Tribunal expect to see reconstructed from your file.
| # | Step | Clock |
|---|---|---|
| 1 | Establish the facts and record the date you became aware of them | Must fall inside the person's time as your representative — section 14(1)(b) |
| 2 | If the person has already left, commence proceedings | Within six months of the date they ceased to be your representative — section 14(5) |
| 3 | Serve written notice of intention to debar: grounds and reasons, the supporting evidence, any terms attached to the debarment including measures to protect clients' interests, and a copy of your debarment policy and procedure | Give a reasonable period to respond — 30 days is the common benchmark |
| 4 | Consider the response together with all available facts and information, including anything from the FSCA, an ombud or other interested parties | Before deciding, not after |
| 5 | Notify the person of the decision in writing, and of their right to request reasons and to apply to the Financial Services Tribunal for a reconsideration under the Financial Sector Regulation Act 9 of 2017 | On decision |
| 6 | Notify the FSCA of the debarment in the prescribed form and manner | Within five days of the debarment |
| 7 | Provide the FSCA with the grounds and reasons | Within fifteen days of the debarment |
| 8 | Remove the name from your register of representatives; the FSCA records the debarment on the public register of debarred persons under section 14(7) | Immediately after the decision |
Step 2 is the one that catches brokerages out. The six months runs from the date the person ceased to be a representative, and it governs when proceedings must be commenced — not when the notice of debarment is finally issued. A resignation letter therefore starts a clock rather than closing a matter, and "we were still investigating" is only an answer if you can date the start of that investigation.
Step 6 has no discretion in it either. The FSCA does not review, approve or confirm your decision; the administrative action is complete when you take it. That cuts both ways — nobody is going to correct your process for you before it becomes a Tribunal matter.
The evidence that decides these matters is rarely a signed document. It is the instruction the representative gave the client, the amount they said they would collect, the quote they sent, the promise about a claim, the date the client first raised it. In a brokerage that runs on WhatsApp, all of that sits in a thread — and if the thread is on the representative's personal handset, it walks out of the door with them.
Three practical consequences:
This is where a system built for brokerages earns its keep. In ORIS, conversations run through the brokerage's own WhatsApp Business Account rather than a personal number, every message is attached to the customer record, audit logs sit under Settings, users can be removed without the history going with them, and customers, opportunities and campaign activity can be pulled out as CSV when a compliance officer needs a bundle. It will not tell you whether to debar. It will let you answer, with dates, the two questions the Tribunal asks first: what did you know, and when did you know it?
The first is the resignation reflex. Accepting a resignation is an employment decision; debarment is a licensing one. They run in parallel, they use different tests, and a settlement agreement that promises not to debar is not something a brokerage can lawfully offer.
The second is the missing policy. Section 14 requires you to hand the person a copy of your debarment policy and procedure with the notice of intention. If the document does not exist, you cannot comply with step 3 — and drafting it in the middle of a live matter tends to produce a policy written around one person's facts. Write it once, sign it off at management level, and reference it in your appointment letters. While you are there, add the debarment register check to the appointment checklist alongside the honesty and integrity enquiries and, for anyone still under supervision, the clocks covered in onboarding a representative under supervision.
Yes, provided two things hold. The conduct must have occurred and become known to you while the person was still your representative, under section 14(1)(b), and you must commence the debarment proceedings within six months of the date they ceased to be a representative, under section 14(5). Proceedings begun inside that window can be concluded after it.
No. The decision is the FSP's, and the administrative action is complete once the FSP has taken it lawfully. The FSCA records the debarment on the public register kept under section 14(7) and cannot lift it of its own accord — that requires a decision of the Financial Services Tribunal or a court, or a successful application by an FSP to reappoint the person.
Yes, but not automatically and not quickly. Where the debarment concerned honesty or integrity, an FSP wanting to appoint the person applies to the FSCA with, among other things, an affidavit confirming that all unresolved business from before the debarment has been concluded and that the person now meets the fit and proper requirements, plus an explanation of the rehabilitation; a minimum period of twelve months is generally applied, and the Authority retains a discretion to refuse. Where the debarment was purely for an unmet competence requirement, such as an outstanding regulatory examination, meeting the requirement is the substance of the application.
You proceed. Section 14 requires that a reasonable opportunity to make a submission be given, not that one be taken. Record the delivery of the notice, the deadline you set and the absence of a response, then decide on the available facts and information — and keep the delivery proof, because service is the first thing a reconsideration application attacks.
Section 14 does not require a client notification as such, but the notice of intention must set out any terms attached to the debarment, including measures stipulated for the protection of the interests of clients. In practice that means deciding who takes over the book, what you check in those files, and how you respond if a client asks why their adviser has changed. Handle the last part carefully: what you may say about the reasons is constrained by employment and privacy law, and POPIA applies to the former representative's personal information too.
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