Unit Standard No.12164Page 145
THE CONSEQUENCES OF NON-COMPLIANCE
The following extract from the Act (section 36), outlines the consequences of non-compliance.
Offences and penalties
36. Any person who-
(a) Contravenes or fails to comply with a provision of section 7(1), 8(8), 13(1),
14(1), 18, 19(2) or 34(4) or (6); or
(b) in any application in terms of this Act, deliberately makes a misleading, false
or deceptive statement, or conceals any material fact , is guilty of an offence and is on conviction liable to a fine not exceeding R1 000 000 or to imprisonment for a period not exceeding 10 years, or to both such fine and such imprisonment.
The following extract from the Act details what the consequences for non-compliance can be, in relation to an FSP who is involved in Undesirable Practices:
34. (1) Subject to subsections (2) and (3), the registrar may, after consultation with the Advisory Committee, by notice in the Gazette declare a particular business practice to be undesirable for all or a category of authorised financial services providers, or any such provider.
(2) The following principles must guide the registrar in considering whether or not a
declaration contemplated in subsection (1) should be made:
(a) That the practice concerned, directly or indirectly, has or is likely to have the
(i) harming the relations between authorised financial services providers or any category of such providers, or any such provider, and clients or the general public;
(ii) unreasonably prejudicing any client;
(iii) deceiving any client; or 50
(iv) unfairly affecting any client; and
(b) that if the practice is allowed to continue, one or more objects of this Act will, or is likely to, be defeated.
(3) The registrar may not make such a declaration unless the registrar has by notice in the Gazette published an intention to make the declaration, giving reasons therefore, and invited interested persons to make written representations so as to reach the registrar within 21 days after the date of publication of that notice.
(4) The authorised financial services provider concerned may not, on or after the date
of the publication of a notice referred to in subsection (1), carry on the business practice concerned.
INSMAT final materials31/10/03