FSCA Temporarily Suspends Forex Trader's Licence
By: SA Shares
It cited the trader has been operating in "absolute conflict" with its clients. It has allegedly been tampering trading conditions to minimise some high-level clients' earnings and instead maximising its own. It also transpired that the trader has for the past year amassed numerous complaints from clients who have not had their deposit withdrawal requests honoured, or have suffered losses due to intermittently not being able to access the trading platform. The FSCA said it has a reasonable belief that prejudice to clients or the general public may occur if the trader continued rendering financial services.
The regulator is moving to have the trader liquidated, and has filed papers to this effect with the High Court in Johannesburg. While on suspension, JP Markets are not permitted to take on any new business or clients or render any services; however, it is not prohibited from processing client withdrawals. The firm had to inform all affected clients of the recent events. The FSCA's investigation is currently on-going and any new findings will be made public.
The FSCA said in a statement it is considering further enforcement actions depending on the outcome of its investigations. It warns the public that JP Markets is not authorised as an (OTC) derivative provider, and as such may not trade in these markets, whether as part of its own business or as acting principal for a third party.
The trader is opposing the FSCA's application for liquidation and plans to fight back in court, said its attorney.
Head of FSCA business supervision division, Kedibone Dikokwe, explained the nature of the investigations. According to her, JP Markets allowed its clients to access a platform to trade in (CFDs), and to deposit their funds into its bank accounts. These deposits would then seemingly allow the clients to trade in forex CFDs, enter transactions, and make profits or losses depending on how the underlying forex exchange rose or fell. However, it transpired these clients were not trading on an online decentralised global financial market, but merely on a software application that the firm acquired ready-made and pre-programmed, that recorded these trades. According to Dikokwe, these clients were in fact purchasing CFDs issued by JP Markets (https://www.sashares.co.za/
Linda J van Vuuren