POLICY AND PROCESS ON DEBARMENT

1. Introduction

This Policy endeavours to create an understanding of the term “debarment” and to set out the procedure to be followed by compliance and the business in the event that a representative has to be debarred. The Hub Group Financial Services (“The Hub or FSP”) is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 2002 (“FAIS Act”) and it therefore required to implement a debarment procedure.

In terms of the section 8A, the FSP must ensure that its key individuals and representatives continue to comply with the fit and proper requirements and fit and proper requirements relating to continuous professional development. In addition, representatives’ must meet the competency requirements as required in the Fit and Proper Board Notice 194 of 2017.

In terms of the FAIS Act, when a representative no longer meets the requirements of the fit and proper requirements or competency requirements, the representative has to be debarred. A representative can be debarred by the FSP and in certain circumstance can be debarred by the Registrar. On debarment the representative’s name has to be removed from the register of representatives and the FSP has to ensure that the representative’s S13 (1) (b) letter is withdrawn.

The FSP is also required to allocate any unfinished business of the debarred representative to other representatives within the business.

2. FSP Responsibility

S14 places on an obligation on the FSP to debar its own representative and key individual under specific circumstances which are listed below in this policy.

The FSP bears the onus to ensure that the debarment process is lawful, reasonable and procedurally fairly.

In order for a debarment to be valid, the reasons for a debarment must have occurred and become known to the FSP while the person was a representative of the provider.

If the FSP is unable to locate a person in order to deliver a document or information concerning the debarment process, after taking all reasonable steps to do so, including dissemination through electronic means where possible, delivering the document or information to the person’s last known e-mail or physical business or residential address will be sufficient.

3. Person Responsible for the Policy

The persons responsible for the execution of this policy, the debarment process, overall oversight of representative activities including monitoring progress on competency requirements shall be the Key Individual; Human Resources and the Compliance Officer.

4. Key Individual Responsibility

The responsibility to ensure that representatives are at all times fit to carry out their duties and that they adhere to the legal prescripts and company policies lies with the key individuals. The FSP therefore has to monitor the activities of representatives on a continuous basis.

The key individual responsible for specific representatives or a person identified and formally appointed to review compliance internally, must review representative activities and report thereon. If any of the annual reviews are done by the compliance officer, it does not relieve the key individual from his or her responsibilities as conferred by the Act and that relates to representative compliance.

5. Grounds for Debarment

The grounds for a debarment are set out in s14 of the Act (including a juristic) if the FSP is satisfied on available facts and information that:-

the person does not meet or no longer complies with the

fit and proper requirements

competence requirements

has contravened or failed to comply the provisions of the Act in a material manner.

5.1 The following circumstances can be considered as grounds for a debarment:

5.1.1 can no longer be regarded as being honest and/or having integrity; and / or;

5.1.2 is no longer competent (i.e., does not have the required level qualifications / competency relating to products or general ability to advise or render intermediary services) to act as a representative.

5.1.3 A person can be debarred for failure to comply with honesty and integrity requirements as set out in s8A of the Act.

5.2 Consequences of Debarment

5.2.1 Impact on the Representative who has been debarred

Being debarred means that the representative:

5.2.1.1 may not be allowed to continue with the rendering of any new or existing financial service to a client; and

5.2.1.2 must be removed from the register of representatives immediately;

5.2.1.3 the individual’s name will be listed on the FSCA register of debarred representatives and will be published on the FSCA website.

5.2.2 Duties of the FSP on debarment

The FSP has a duty to:

5.2.2.1 Follow the internal disciplinary procedure and then withdraw the S13(1)(b) letter of the representative to act as a representative on its behalf.

5.2.2.2 update the representative register due to the FSCA to report the representative as debarred.

5.2.2.3 notify the FSCA within 5 days of the debarment

5.2.2.4 inform the FSCA of the debarment within 15 days from the date of removal of the debarment of representative of the grounds and reasons for the debarment, in a prescribed form;

5.2.2.5 ensure that any un-concluded business of the representative is properly concluded by introducing clients to a new advisor who may proceed with the client’s transaction.

9. Powers of the Authority on Debarment

When the debarment is effected,

9.1 the FSP must notify the Authority within 5 days of the debarment and provide the Authority within 15 days of the grounds and reasons for the debarment, in a prescribed form.

9.2 The Authority will record the fact that the person has been debarred in the register of debarred representatives which is published on the its website.

9.3 The Authority does not engage with the debarred person in order to afford the person an opportunity to make submissions why debarment should not be recorded or published.

9.4 with the grounds and reasons for debarment received from the FSP,

9.4.1 the Authority may consider making possible referrals of the representative’s actions for criminal investigation or enforcements action as envisaged by s167 of the FSR Act.

9.4.2 enables the Authority when confronted with the reappointment of the debarred person by another FSP to assess whether or not there has been compliance with all the requirements for the re-appointment.

9.4.3 to satisfy itself that due process was followed by the FSP and that the debarment relates to non-compliance with the Act.

14. Policy Review

This policy shall be reviewed once a year, however changes may be affected from time to time, if appropriate.