South African investors seeking compensation through the Ombud for Financial Services (FAIS Ombud) for financial prejudice and damage can now be awarded up to R3.5 million.
This follows changes to the rules governing the FAIS Ombud, raising the compensation limit from R800 000 to R3.5 million, reports Business Tech.
The Office of the FAIS Ombud Welcomes the New @OmbudCouncil Rules for Financial Services Providers, effective 1 July 2024. The rules are now available on the Ombud Council’s website at https://t.co/rPXdoEOZ87. pic.twitter.com/uiG0rO3oZD
— Faisombud (@faisombud) July 1, 2024
The new rules were published by the Ombud Council on Monday, 1 July, and were applicable immediately.
“Previously, complainants with losses exceeding R800 000 often needed to forgo the excess before this Office could proceed with its investigation,” FAIS Ombud Advocate John Simpson told Moneyweb.
“The increase in the Office’s jurisdiction, which has remained unchanged since its inception in 2004, allows it to offer greater assistance to complainants.”
Another major change to the rules is that consumers will no longer be able to report unregistered financial service providers (FSPs) to the FAIS Ombud, but to the Financial Services Conduct Authority
‘Consumers are constantly encouraged to verify whether they are transacting with registered financial services providers, as the Office’s services will not be available if the complaint relates to unlawful unregistered entities,’ the FAIS Ombud said.
According to FSP advisory Moonstone, the new compensation limit does not apply retrospectively, only to complaints received on or after 1 July 2024.
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