Page 91 - Profile's Unit Trusts & Collective Investments - March 2026

Legislation and guidelines Chapter 5

their agents. The TCF principles represent the best way to build a relationship of trust with clients and
to achieve a sustainable long-term business model. A key feature of TCF is a top-down approach
which tasks business leaders and senior managers with creating a culture of good service rather
than a delegated “tick box” compliance approach.
TCF goes beyond customer satisfaction. The fact that customers are satisfied does not necessarily
mean they have been treated fairly – satisfaction might be due to ignorance, distorted expectations,
or even misleading information given by the service provider.
In applying TCF, companies should seek to achieve six key outcomes, which are encapsulated
in the mindset: doing things right and doing the right thing. The key objectives can be summarised
as follows:
R In December 2014 the National Treasury issued an updated discussion document titled
Treating Customers Fairly in the Financial Sector: a market conduct policy framework for
South Africa. The FSCA’s TCF initiative is part of the regulatory initiative spearheaded by the
FSR Act. The TCF principles underpin the FSCA’s General Code of Conduct (GCOC) and are
one of the building blocks of the draft COFI Bill.
R At a practical level, the TCF principles are being incorporated into the new regulatory
structures evolving under the FSR Act and the COFI Act – TCF will not exist as a separate
piece of legislation. In the words of Caroline Da Silva, the former head of the FSCA,
the TCF objectives are “the guiding principles that the FSCA will use to design both our
regulatory as well as supervisory frameworks to ensure that financial institutions will indeed
prioritise these outcomes”.
FAIS Ombud
The FAIS Act set up the Ombud for Financial Service Providers or FAIS Ombud, charged with
adjudicating complaints. Once the COFI Bill is enacted, the Ombud’s office enabling legislation will
be moved to the FSR Act and the Ombud Council created by that Act. Currently, in terms of the
FAIS Act, the objective of the Ombud is to “consider and dispose of complaints in a procedurally
fair, informal, economical and expeditious manner”. The office of the Ombud provides a dispute
resolution mechanism which avoids lengthy and costly court proceedings. In considering
complaints, the Ombud must consider the contractual arrangements and legal relationship between
the parties, and must act in a fair, impartial and independent manner.
A determination made by the Ombud (or a final decision by a board of appeal) is regarded as a civil
judgement of court.
The Ombud has fairly broad powers in terms of the FAIS Act and the Ombud Council’s Rules for
the Ombud for Financial Services Providers.
The Rules, which came into effect on 1 July 2024, replace the offices Rules on Proceedings,
which had been in place since 2004. He may elect to refer a matter to court if he feels that there are
reasonable grounds why the office of the Ombud should not deal with the matter. Most disputes
between consumers and FSPs or FSPRs, however, will be considered by the Ombud. Note that the
Ombud may not consider a matter which has already been taken to court.
Before beginning an official investigation into a complaint, the Ombud must in writing inform every
other interested party about the complaint, and must give all parties an opportunity to submit a
response to the complaint.
The Ombud must, as a first resort, “explore any reasonable prospect of resolving a complaint by a
conciliated settlement acceptable to all parties”. The Ombud may suggest mediation to the parties,
and may allow legal representation if he feels this is appropriate.
Where possible, the Ombud will suggest a solution to the parties. The parties must advise the
Ombud whether his recommendation is acceptable, and must give reasons if it is not acceptable.
Where the parties accept the Ombud’s recommendations, it has the force of a court order.
If the Ombud is unable to achieve some conciliation between the parties, the Ombud
must make a final determination. This could involve dismissing the complaint, upholding the
complaint, or partially upholding the complaint. In the latter cases, the Ombud may make a

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