Subject Title - INSETA

7.3 UNDESIRABLE BUSINESS PRACTICES7.3.1 What is an undesirable business practice?In terms of Section 34 of the FAIS Act, the Registrar may declare a businesspractice „undesirable‟ – after consultation with the FAIS Advisory Committee.This may be done for a specific FSP or a category of FSPs.Before declaring a business practice as undesirable, the Registrar must firstconsider the following:The business practice musthave, or is likely to have, adirect or indirect effectresulting in: harming the relations between FSPs orany FSP or category of FSPs, andclients or the general public OR unreasonable prejudice to clients OR deceiving any client OR unfairly affecting any client AND if allowed to continue, thepractice will defeat one or moreobjects of the FAIS Act.If the Registrar is convinced that these „requirements‟ are met, the followingmust happen:1. The Registrar must publish an intention to make the declaration inthe Gazette, and provide reasons and invite written representationsto the Registrar such representations must reach the Registrarwithin 21 days after date of publication of the intention.2. The Registrar considers the representations and decides to declarethe business practice as „undesirable‟ or not;3. The declaration must be published and the FSP concerned may notcontinue with the business practice on or after the date of publicationin the Gazette (this refers to the actual declaration, not the intentionto declare) 46 .4. If the FSP carries on with the business practice after the date ofpublication, the Registrar may inform the FSP to rectify or reinstateto the satisfaction of the Registrar, any loss or damage which was46 Sections 34(3)&(4) of the Act© INSETA - Section 1 12a 129