From CompliNEWS | Financial Service Intelligence Watch
Overview of the Financial Services Tribunal Consolidated Rules (issued 27 September 2024)
The Financial Services Tribunal plays a pivotal role in ensuring fairness and accountability within South Africa’s financial regulatory framework. Issued under section 227 of the Financial Sector Regulation Act (FSR Act), the Consolidated Rules of the Financial Services Tribunal, dated 27 September 2024, outline the procedures and processes governing the Tribunal’s operations. These rules establish the mechanisms through which individuals and entities can seek reconsideration of regulatory decisions, ensuring a structured approach to resolving disputes and promoting transparency.
Key Definitions and Application Process
The rules begin by clearly defining essential terms such as ‘Act’, ‘Tribunal’, ‘Decision’, and ‘Decision-maker’. The ‘Act’ refers to the Financial Sector Regulation Act 9 of 2017, which serves as the foundation for these rules. The ‘Tribunal’ is the Financial Services Tribunal, responsible for reviewing decisions made by various financial regulatory bodies. Meanwhile, a ‘Decision’ refers to any regulatory action taken under the Act, and a ”Decision-maker’ is the authority responsible for making such decisions.
A notable aspect of the rules is the definition of ‘day’, which specifies that for the purposes of the Tribunal’s procedures, ‘day’ refers to ordinary calendar days rather than business or court days. This means that timelines for filing applications, responses, and other procedural actions are calculated based on all calendar days, excluding public holidays and Sundays.
Reconsideration of Decisions
One of the key functions of the Tribunal is to allow individuals or entities who feel aggrieved by regulatory decisions to apply for reconsideration. This right is rooted in section 230 of the FSR Act, enabling parties to challenge decisions made by financial regulators. To initiate a reconsideration, an applicant must submit an application within the stipulated timeline: 30 days if they had requested reasons for the decision, or 60 days in all other cases.
The application must include the decision letter and the statement of reasons provided by the decision-maker, along with any supporting documents. The rules emphasise the importance of succinctly stating the grounds for reconsideration, ensuring that applications are well-structured and easy to process. The Tribunal also provides two standard forms (Form A and Form B) to streamline the submission process, depending on whether the decision affects a third party or only the applicant.
Decision-Maker’s Role
Upon receiving an application for reconsideration, the decision-maker—typically a regulatory authority—has 30 days to submit a complete and properly collated set of documents to the Tribunal. This record must include all underlying documents that influenced the decision, as well as any additional reasons for the decision if necessary. Importantly, only relevant documents should be submitted to avoid unnecessary duplication, and any non-compliant records will be returned.
Suspension of Decisions
Applicants may also request the suspension of a decision pending the outcome of the reconsideration application. This is crucial in cases where immediate enforcement of a decision could cause irreparable harm to the applicant. Such applications must be supported by an affidavit and filed with both the Tribunal and the decision-maker. The suspension is typically granted based on the urgency of the situation and whether the applicant has demonstrated a reasonable likelihood of success in the reconsideration.
Introducing Further Evidence
In certain circumstances, an applicant may seek to introduce new evidence that was not initially submitted. This requires a separate application supported by an affidavit explaining why the evidence was not available earlier, its relevance, and its credibility. The Tribunal is generally cautious about allowing additional evidence, as it aims to base its reconsideration on the facts available at the time of the original decision. However, in exceptional cases, oral evidence may be permitted.
Condonation and Joinder Applications
The Tribunal also provides for condonation applications when an applicant fails to meet the procedural deadlines. These applications must clearly demonstrate good cause for the delay, such as unforeseen circumstances or other valid reasons. The Tribunal evaluates condonation requests on a case-by-case basis, ensuring that the integrity of the process is maintained while allowing some flexibility where justified.
Additionally, the rules outline procedures for joinder applications, which allow third parties with a direct interest in the decision to join the proceedings. Such applications must be supported by an affidavit and demonstrate that the third party has a substantial and direct interest in the outcome. The Tribunal may grant or deny joinder based on the specifics of each case.
Hearing and Set-Down Procedures
Once all relevant documents are submitted and the Tribunal record is prepared, the Panel Chairperson sets a date for the hearing. While the Tribunal aims to accommodate the schedules of the parties involved, the convenience of the legal representatives is considered secondary to ensuring timely resolution of cases. The rules specify that hearings are usually limited to one day, with each party allotted a maximum of two hours for their arguments.
For certain cases, the Tribunal offers the option to decide the matter solely on the papers, without the need for a formal hearing. This is designed to reduce costs and expedite the process, but parties are not obligated to forego their right to a hearing. Legal representatives must file heads of argument ahead of the hearing, adhering to guidelines similar to those of the Constitutional Court and the Supreme Court of Appeal.
Postponement and Withdrawal
The rules also cover procedures for postponement and withdrawal. It is important to note that the unavailability of legal representation is not considered a valid reason for postponement. Parties are free to withdraw their applications at any time, but failure to prosecute an application within the set time frames may result in dismissal for non-prosecution.
Public Access and Privacy
The Tribunal adheres to the Protection of Personal Information Act (POPIA), balancing transparency with privacy. Documents submitted to the Tribunal become part of the public record, ensuring openness in the decision-making process. However, the Tribunal takes steps to protect personal information, limiting its disclosure to relevant regulators and interested parties as necessary for adjudication. Parties retain the right to object to the sharing of personal information, but such objections may hinder the Tribunal’s ability to process the application.
Publication of Tribunal Decisions
In line with section 258 of the FSR Act, all decisions made by the Tribunal must be published, ensuring that the outcomes of reconsideration applications are accessible to the public. This enhances the transparency of the Tribunal’s work and provides valuable precedent for future cases.
Dies Non Period
A significant procedural rule concerns the dies non period, which runs from 16 December to 15 January each year. During this time, the Tribunal does not count the days for procedural time limits, except where the Act mandates specific deadlines. This provision ensures fairness by pausing the countdown during the holiday period.
Conclusion
The Consolidated Rules of the Financial Services Tribunal provide a comprehensive and structured framework for handling reconsideration applications, suspension requests, and other procedural matters related to financial regulatory decisions. The rules are designed to ensure fairness, transparency, and efficiency, while also allowing flexibility in cases where procedural deadlines cannot be met or further evidence emerges. By balancing these elements, the Tribunal plays a crucial role in maintaining accountability within South Africa’s financial sector.
Financial Services Tribunal Consolidated Rules with new applications