In the past editions, we have published many articles on the outcome of various FAIS Ombud as well as Financial Services Tribunal decisions, highlighting legislation and regulatory requirements as well as many guidelines for financial advisors.
But when can a matter be referred to the Financial Services Tribunal? What does a FAIS Ombud determination mean? What can a client complain about?
The FAIS Ombud deals with complaints submitted to them by a specific client against a financial services provider. The complaint must relate to a financial service rendered by a financial services provider or the representative of the provider.
Where a matter has not been settled or the FAIS Ombud’s recommendation not accepted by the parties, the FAIS Ombud will make a final determination which may include –
- the dismissal of the complaint; or
- the upholding of the complaint wholly or partially, e.g. by awarding the complainant an amount as fair compensation for the financial prejudice or damage suffered.
The FAIS Ombud’s determination has the effect of a civil judgement of a court.
The determination will be signed-off by the Ombud and all parties will be notified of the outcome. The determination must, however, be appealed within one month of the date of signing.
To appeal a determination, you will need to provide written reasons for the appeal. The Ombud will then consider the reasons and either grant or deny your application for leave to appeal to the Tribunal.
In the event that your application for leave to appeal is denied by the Ombud, you may approach the Financial Sector Tribunal directly to apply for a reconsideration of such a decision. Please refer to the Financial Services Tribunal Rules linked below for time frames.
The test applied in deciding whether to grant or refuse an application for leave to appeal is two-fold:
- Whether there is a likelihood that the Tribunal will reach a different conclusion on the matter; and/or
- Whether the matter is complex.
Referring the complaint to the Tribunal
The Financial Sector Regulation Act 9 of 2017 (FSR Act) has from 1 April 2018, established an independent Financial Services Tribunal in terms of Section 219 of the FSR Act. This Tribunal will reconsider, on the application, any decisions made by any decision maker, including the FAIS Ombud, for any aggrieved party.
An application for reconsideration must be made:
| a. | in accordance with the Tribunal rules; and |
| b. | within the time periods set out in section 230 (2) of the FSR Act. |
How do I apply for leave to reconsider a decision made by the FAIS Ombud?
An application for leave to reconsider, to be valid, must be lodged with the secretariat AND all other parties to the decision. It must be in accordance with Form C as published on the FSCA website.
| a. | a copy of the original application submitted to the Ombud; |
| b. | the decision letter; |
| c. | full particulars of the grounds (stated succinctly) on which the application is based and, if necessary, must deal with the aspect of condonation should the application be filed out of time. |
Guidelines on submitting documents
Only documents relevant to the decision may be submitted. All documents must be properly marked, not duplicated, collated and in a single file. The Tribunal does not accept applications lodged piecemeal.
The FAIS Ombud, on receipt of an application for leave to reconsider, must provide the Tribunal secretariat with a hard copy or an electronic PDF version of a properly collated bundle of the relevant underlying documents on which the decision was based.
The application will be decided by the Chairperson on the papers received. If the application is granted by the Chairperson, the applicant may proceed to lodge an application for reconsideration in accordance with section 230 of the Act.
Hearing of an application for reconsideration
- The argument will be limited to the grounds upon which the application for reconsideration is based.
- The maximum time allowed for argument is two hours for the applicant and two hours for the respondent(s).
It is important to note that any decision by the Chairperson is final and not open to reconsideration by the Tribunal.
Click here to view the FAIS Ombud’s Complaint Handling Process.
Click here to download the Financial Services Tribunal Rules.
Click here to download Chapter 15 (Financial Services Tribunal) of the FSR Act.
It is interesting to note that recent determinations by the FAIS Ombud already provide both the complainant and respondent permission to appeal against its determinations. This is in stark contrast to previous experience, where virtually no requests for permission to appeal were allowed.
