FSCA warns public against unlawfully conducting unauthorised financial services business

Pretoria - The Financial Sector Conduct Authority (the FSCA) has today issued a warning for the public to exercise caution when conducting financial services business with the entities or persons listed below. Through a statement issued today, the AuthorityIt said it had come its attention that these entities or persons may be rendering financial services to members of the public without being authorised to do so.

Without commenting on the business of these entities or persons, the FSCA pointed out that offering financial products or services in South Africa requires authorisation by the FSCA.

It said financial services business includes persons advising the public on investing their funds in any manner, which is often in the form of offering the public investment opportunities. This also refers to persons dealing with investments of the public in any manner. This includes receiving funds from the public, making investments on behalf of the public and trading in any financial product for or on behalf of the public or enabling the public to trade in financial products.

It explained that to avoid unnecessary risk, the public should not accept any financial advice, assistance or investment offers from persons who are not authorised by the FSCA to conduct financial services. Authorised financial services providers must display the fact that they are authorised on their documentation, and if this is absent, the public should avoid paying any funds to such a person without investigating it further.

"The public is urged to act with care when investing their funds. There are many fraudsters
operating scams, and the number is growing. South Africans loses millions of rands every
year to fraudsters. Illegal operations are sometimes well-disguised as legitimate operations.

"The public is advised to be on the lookout for the tell-tale danger signs when dealing with persons offering attractive investment opportunities. These red flags include unrealistic returns that is offered, claims that the entity or person does not require an FSCA licence, vague information about the investment product, or the company that provides the financial product, claims that the investor must act urgently, and requirements to pay more money over to have their investment returned to them," the regulator said.

If in doubt, the public is encouraged to seek advice from an authorised financial services
provider Members of the public should always check:

• that an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest.
• what category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
• that the FSP number utilised by the entity or individual offering financial services matches to name of the FSP on the FSCA database.