Clarifying the Effect of Debarment of Representatives by Financial Services Providers and Related Due Process Requirements: Financial Services Board v Barthram  3 All SA 665 (SCA)
This note focuses on the decision of the Supreme Court of Appeal (SCA) in Financial Services Board v Barthram  3 All SA 665 (SCA). The case dealt with the debarment of a person active professionally in the financial sector as a representative for a financial services provider (FSP) in terms of section 14 of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act). Barthram, an FSP representative of Discovery, was found by Discovery to have ceased to comply with the extant requirements of the FAIS Act for a representative in good standing. He was consequently debarred by Discovery from rendering financial services on behalf of Discovery and removed from the register of representatives. Barthram was subsequently listed on the Financial Services Board (FSB) website as a debarred representative for failing to comply with the personal character qualities of honesty and integrity. The central question posed in the litigation that ensued was regarding the effect of Barthram’s debarment. The High Court held that he was only debarred from providing financial services on behalf of Discovery and not industry wide. However, the SCA reversed the High Court’s decision. It would appear that there is a misconception whether a representative banned from providing financial services on behalf of one FSP under section 14 will be prohibited from providing financial services industry-wide. This note intends to clarify this misconception by exploring the SCA’s decision in Financial Services Board v Chidede and Osode.