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Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002)

Chapter VI : Enforcement

Part 2 : Other enforcement measures

38B. Application by registrar for sequestration or liquidation

 

 

(1) Subject to subsection (3), if the registrar, after an on-site visit in terms of section 4(5) or an inspection in terms of the Inspection of Financial Institutions Act, 1998 (Act No. 80 of 1998), considers that the interests of the clients of a financial services provider or of members of the public so require, the registrar may apply to the court for the sequestration or liquidation of that provider, whether or not the provider is solvent, in accordance with—
(a) the Insolvency Act, 1936 (Act No. 24 of 1936);
(b) the Companies Act;
(c) the Close Corporations Act, 1984 (Act No. 69 of 1984); or
(d) the law under which that provider is incorporated.

 

(2)        In deciding an application contemplated in subsection (1), the court—

(a) may take into account whether sequestration or liquidation of the financial services provider concerned is reasonably necessary—
(i) in order to protect the interests of the clients of the provider; and
(ii) for the integrity and stability of the financial sector;
(b) may make an order concerning the manner in which claims may be proved by clients of the financial services provider concerned; and
(c) shall appoint as trustee or liquidator a person nominated by the registrar.

 

(3) This section does not apply if another registrar is authorised in terms of Financial Services Board legislation as defined in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990), or in terms of banking legislation, to apply to the court for the sequestration or liquidation of that provider.

 

[Section 38B inserted by section 201 of Act No. 45 of 2013]