The Financial Services Tribunal is ready for action

November 1st, 2019
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The Financial Sector Regulation Act 9 of 2017 (the Act) establishes the independent Financial Services Tribunal (the Tribunal) in terms of s 219 thereof. The Tribunal replaced the Financial Services Board’s Appeal Board and came into effect on 1 April 2018.

The Act repealed the Financial Services Board Act 97 of 1990 and other financial sector laws, such as the Financial Markets Act 19 of 2012, the Financial Advisory and Intermediary Services Act 37 of 2002, and the Collective Investment Schemes Control Act 45 of 2002.

Since 1 August, the Tribunal has been operating from its new premises at Kasteel Office Park Orange Building (2nd Floor), 546 Jochemus Street, Erasmuskloof, Pretoria. All Tribunal hearings will take place at the new premises. The current chairperson of the Tribunal is former Constitutional Court Judge, Yvonne Mokgoro.

The Tribunal

The purpose of the Tribunal is to reconsider decisions. According to s 219 of the Act, the Tribunal is established to reconsider decisions as defined in s 218 and to perform the other functions conferred on it by the Act and specific financial sector laws.

Section 218 of the FSR Act defines ‘decision’ as including, for example, ‘a decision by a financial sector regulator or the Ombud Council in terms of a financial sector law in relation to a specific person’ or ‘a decision of a statutory ombud in terms of a financial sector law in relation to a specific compliant by a person’.

Section 219(2) of the Act, states that the Tribunal is independent, impartial and exercises its powers without fear, favour or prejudice. It is a tribunal of record and must perform its function in accordance with the Act and the specific financial sector laws.

The members of the Tribunal are appointed by the Minister of Finance in terms of s 220 of the Act. The requirements of who can be members of the Tribunal are contained in s 220 of the Act and include a requirement that at least two of the members must be retired judges, or persons with suitable expertise and experience in law and at least two other persons with experience or expert knowledge of financial products, services, instruments, market infrastructures or the financial system.

The chairperson of the Tribunal has an obligation to constitute a panel of the Tribunal for each application for reconsideration of a decision. Section 224 of the Act provides that the decision of the panel in respect of the application for the reconsideration of a decision is the decision of the Tribunal.

The Tribunal has been accorded with the power to make its own rules. Section 227 of the Act states that the chairperson may make rules for procedure to be followed in proceedings on applications for reconsiderations of decisions, and the conduct of those proceedings and may at any time amend or revoke them.

Applications before the Tribunal

An application for the reconsideration of a decision is basically an application to revise the decision as contemplated in s 218 of the Act. In terms of s 230 of the Act, the aggrieved party may apply to the Tribunal for a reconsideration of the decision.

It is critical to note that in terms of s 231 of the Act, an application for reconsideration of the proceedings regarding the application do not automatically suspend the decision of the decision maker. The decision can only be suspended if the Tribunal orders that such decision be suspended.

Section 229 of the Act deals with matters relating to the rights of persons to be provided with reasons for the decisions taken. For example, an applicant who has not been provided with the reasons for the decision taken, may within 30 days, request the decision maker for the reasons. In that event the decision maker must – within one month after receiving a request – provide the person with the reasons, which will include a statement of the material facts on which the decision was based.

There are two instances where an application can be made, it can either be in terms of s 230 of the Act, where the applicant has requested reasons, or where within 60 days after the applicant was notified of the decision, or such longer period as may on good cause be allowed.

Proceedings of the Tribunal

The aggrieved party or the decision maker may in terms of s 232(a) be represented before the Tribunal by a legal representative of their own choice. The Tribunal hearings are to be held in public. However, the person presiding over the panel may direct that a person be excluded from a hearing on any ground. The grounds on which the person may be excluded are expected to be more or less the same as those that exclude a person from civil proceedings before the High Court.

The proceedings for the reconsideration of decisions are to be conducted in terms of the procedure that are subject to the financial sector laws (for example, the Financial Markets Act) and the Tribunal rules.

In as far as the provision of evidence is concerned, the panel is not bound by the rules of evidence. However, it may inform itself on any relevant matter in any appropriate manner. It is important to also note that a person giving evidence or information, or producing documents, has the same protections and liabilities as a witness giving evidence before the High Court.

Proceedings are to be conducted with as little formality and technicality, as expeditiously, as the requirements of the financial sector laws and a proper consideration of the matter permit. Furthermore, the person chairing the panel may provide directions in order to facilitate the proceedings.

The person presiding over the panel has certain powers conferred on them, which includes calling on a witness to appear before the panel to provide evidence or produce any document. When the witness appears before the panel to give evidence the presiding officer must administer an oath or accept an affirmation from the witness.

It is the majority rule when it comes to the decisions of panels. However, in the event that the members of the panel are equally divided in opinion, the opinion of the presiding officer on the panel will prevail.

Tribunal orders

The Tribunal may in terms of s 234 of the Act impose certain orders, which may include the following –

  • the setting aside of the decision and remitting the matter to the decision maker for further consideration;
  • setting aside the decision and substituting the decision of the Tribunal (decisions in terms of ch 13, para (b) or (c) of the definition of ‘decision’ in s 218 and prescribed by Regulation for the purposes of s 231); or
  • dismissing of the application.

The Tribunal also has the authority, in exceptional circumstances, to order costs. It may impose an order that a party to the proceedings pay some or all the costs reasonably and properly incurred by the party in connection with the proceedings.

The above orders are, however, subject to any provision of a financial sector law that excludes, restricts or qualifies the orders that the Tribunal may impose in proceedings.

The orders of the Tribunal may be reviewed by the judicial authority. Section 235 of the Act provides any party to the proceedings who is dissatisfied with an order of the Tribunal to approach the judicial authority for review of the order of the Tribunal. This may be either in terms of the Promotion of Administrative Justice Act 3 of 2000 or any applicable law.

A party to the proceedings may in terms of s 234 of the Act file a certified copy of the order with the registrar of a competent court subject to s 236(1)(a) and (b) of the Act. Section 236(2) of the Act states that the order, on being filed, has the effect of a civil judgment, may be enforced as if lawfully given in that court.

Conclusion

The Tribunal has issued new rules, which came into effect on 1 August 2019. The Tribunal Rules and the Tribunal Hearing Schedule are obtainable from the Financial Sector Conduct Authority (FSCA) website at: www.fsca.co.za. Since the Tribunal’s inception in 2018, to date it has heard over 70 matters and all its orders have been published on the FSCA website at: www.fsca.co.za.

Michael Kabai LLB (University of Limpopo) LLM (Unisa) LLM (NWU) is a legal practitioner, adviser and senior manager of the Market Infrastructure and SROs at the Financial Sector Conduct Authority in Pretoria. The views expressed in Mr Kabai’s article are his own and do not reflect the views of the Financial Sector Conduct Authority.

This article was first published in De Rebus in 2019 (Nov) DR 6.