LETTER: Beware unregistered platforms
Financial Services Conduct Authority advises against using any trading platform that is not registered with it
There is a material difference between choosing a local or a foreign trading platform (“Local Or Offshore? How To Choose an Investment Platform”, April 9).
A trading platform is considered an intermediary service and any intermediary doing business in SA would be required to register with the Financial Services Conduct Authority (FSCA) and display its registration number on its website and on all correspondence.
While we cannot prevent the public from accessing foreign platforms it would be unlawful for a foreign platform to market or solicit for business in SA.
If the public choose to do business with an unregistered trading platform that is not locally domiciled, they will have no access to the protection or assurance the FSCA provides to protect the investing public. This is particularly important regarding foreign trading platforms, about which customers need to understand the very high risks involved and whether this type of investment is suitable for them.
We have many cases of customers who have been lured to these platforms, traded in very high-risk instruments and have lost everything, or even worse, have simply been defrauded. There is a greater risk that an unregistered operator will not pay over your investment money to the provider you have selected on the platform.
We take our duty to protect South Africans from the many crooked operators in the world seriously. We thus urge absolute caution and strongly advise against using any platform that is not registered with us to provide these intermediary services.
Investors can check the status of any financial service provider or intermediary on our website at fsca.co.za.