All RE5 questions
FAIS Act FAIS Act and Subordinate Legislation
Pieter is a sole-proprietor FSP with no representatives. He misappropriates client money. Who has the power to debar him from rendering financial services?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) His compliance officer, who must debar an FSP that no longer meets the honesty requirement.
- b) No one, because debarment under section 14 can be carried out only by an FSP against its own representative.
- c) The Authority, under its own debarment power in the Financial Sector Regulation Act.Correct
- d) The FAIS Ombud, as part of a determination on a complaint lodged by an affected client.
Why this is the answer
Section 14 of the FAIS Act lets an FSP debar its own representatives, which cannot reach a sole proprietor or a key individual of the FSP itself. The Authority has a separate power under the Financial Sector Regulation Act to debar a natural person who has contravened a financial sector law in a material respect. The Ombud and compliance officers have no debarment power.
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