Subject Title - INSETA

PurposeChapter 6 gives you an overview of the relevant aspects of debarment. Thisincludes the purpose, reasons, and steps for debarment.As a key individual you have certain responsibilities regarding debarment.This chapter also looks at the record-keeping requirements with regard to theactivities of representatives and key individuals, which also fall under themanagement of key individuals.6.1 DEBARMENT OF REPRESENTATIVES6.1.1 The purpose of debarmentThe purpose of debarment is to prevent a representative in certaincircumstances from rendering financial services to clients, by removing himfrom the representative register. (The representative register was discussedin Chapter 3). Debarment has certain ramifications, such as the fact that aperson who is debarred may not render financial services in the industry. Onthe other hand, removing a person from the representative register becausehe left the employment of a specific FSP is not debarment.Debarment is a requirement of the FAIS Act, and Section 14 of the FAIS Actrequires an FSP to:ensure that a representative who is no longer fit and properis prohibited by the FSP to provide any new financial services.The FSP must do this by:withdrawing the authority of the representative to act for and onbehalf of the FSP; andremoving the name of the representative from the representativeregister.The FSP must also:take immediate steps to ensure that the debarment does notprejudice the interests of the clients of the representative; and116 © INSETA - Section 1 12a