The Ombud Council has commenced the process of giving effect to its legal establishment and developing an operational plan to establish its office and fulfil its functions, says National Treasury.

The Council will in due course issue communication with existing financial sector ombud schemes.

The Ombud Council began dispensing its statutory mandate in May following its appointment by Finance Minister Tito Mboweni. Its board held its first meeting on 26 May 2021.

During its start-up phase, the Ombud Council was expected to focus on developing an institutional framework to support its operations.

It was also anticipated that the Council would in this period confirm that under the Financial Sector Regulation Act No. 9 of 2017 (FSR Act), Chapter 14, Section 194, all financial sector industry ombud schemes already recognised under the Financial Services Ombud Schemes Act, 2004 (Act No. 37 of 2004) before its repeal, are deemed to be recognised for the stipulated period of 12 months up to 1 November 2021, after which a renewal process will be instituted.

“It will endeavour for the recognition process of new financial sector industry schemes to commence on 1 November 2021,” said the Ministry.

The Ombud Council has requested the Financial Advisory and Intermediary Services (FAIS) Ombud, according to the FSR Act, Chapter 14, Section 211, to continue addressing complaints as under the Financial Services Ombud Schemes Act, 2004, before its repeal.

A letter of designation has been issued to the FAIS Ombud in this regard.

The Ombud Council was established in terms of section 175(1) of the FSR Act.

“Its objective was to assist in ensuring that financial customers have access to, and are able to use affordable, effective, independent and fair alternative dispute resolution processes for complaints about financial institutions in relation to financial products, financial services and services provided by financial infrastructures,” reads the statement.

The Ombud Council has oversight powers over both the statutory and industry financial sector ombuds.

The Finance Ministry said the Council would recognise industry schemes that meet minimum requirements, set enhanced governance and accountability requirements, and harmonise and strengthen standards of practice for each ombud scheme. 

This is to be done through rule-making and enforcement powers to develop a uniform and consistent framework for external dispute resolution mechanisms across the financial services sector. 

Source: South African Government News Agency