Debarment

Also known as: debar, debarred, debarment process

The process by which a representative or key individual is barred from rendering financial services for failing to meet legal or Fit and Proper standards.

Debarment is the formal process of prohibiting a person from rendering financial services. It happens when a representative or key individual no longer complies with the Fit and Proper requirements, or has materially contravened the FAIS Act.

An FSP must debar a representative who does not meet the requirements, following a fair, lawful and procedurally correct process — the person must be given reasons and an opportunity to respond. The FSCA can also impose debarment directly.

A debarment must be reported to the FSCA and recorded. The debarred person’s details may be published, and re-appointment is only possible once the grounds for debarment have been addressed and the prescribed period has passed.

Related terms

Fit and Proper RequirementsThe minimum standards of honesty, competence and financial soundness that FSPs, key individuals and representatives must meet.RepresentativeA person who renders a financial service to clients on behalf of an FSP — the role the RE5 exam qualifies you for.FSCAThe Financial Sector Conduct Authority — the market-conduct regulator that licenses and supervises FSPs.FAIS ActThe Financial Advisory and Intermediary Services Act, 2002 — the law that governs financial advice and intermediary services in South Africa.

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