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FAIS Act FAIS Act and Subordinate Legislation
On 2 April an FSP discovers that a representative has been misleading clients. He resigns on 30 April. The FSP starts the debarment process on 15 November. Is the debarment process validly commenced?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) No. The misconduct became known in time, but the process had to be commenced within six months of 30 April.Correct
- b) Yes. The process may be commenced at any time within 12 months of the date on which the misconduct was discovered.
- c) Yes. The misconduct became known while he was a representative, and no time limit applies once that requirement is met.
- d) No. An FSP may debar only a person who is still its representative on the day the process is commenced.
Why this is the answer
A former representative may be debarred only if the reasons occurred and became known while he was a representative, and the process is commenced not longer than six months after he ceased to be one. Six months from 30 April ends on 31 October, so 15 November is too late. The FSP should instead report the matter to the FSCA, which has its own debarment power.
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