By Lehlohonolo Lehana.
The Financial Sector Conduct Authority (FSCA) has officially withdrawn the FSP licence of Banxso (Pty) Ltd, a Cape Town-based online trading platform, following an investigation.
The regulator’s investigation uncovered that Banxso misappropriated client funds, provided false and misleading information to both clients and the FSCA, and failed to act in the best interests of its clients.
The FSCA provisionally withdrew Banxso’s licence on 15 October 2024, following preliminary findings made during an investigation.
Banxso was allowed to respond to the provisional withdrawal notice and provide reasons to the FSCA as to why the provisional withdrawal should be lifted.
The FSCA considered the preliminary findings and Banxso’s submissions in respect of the provisional withdrawal and has decided to withdraw the licence of Banxso.
The FSCA said Banxso materially contravened various financial sector laws and that it no longer meets the requirements to be a financial services provider.
It found that Banxso misappropriated client funds, provided false and misleading information to clients and the FSCA, and did not act in the best interests of clients.
The FSCA has also provisionally withdrawn Afrimarkets Capital’s licence. Afrimarkets and Banxso are linked through common directorships and key persons.
The FSCA stated that Afrimarkets and Banxso conducted their financial services business in a very similar manner.
“The FSCA will update members of the public in due course regarding the investigation and its decisions in this matter,” the authority said.
Banxso released a press statement, saying it noted the publication of the FSCA press release about the final withdrawal of its financial services provider licence.
Banxso stated that it disputes the conclusions reflected by the FSCA and will exercise its full rights of recourse under the Financial Sector Regulation Act.
These rights include the option to apply for reconsideration of the decision before the Financial Services Tribunal.
The company is also undertaking a comprehensive legal review of the procedural and factual aspects underpinning the FSCA’s decision.
“We are disappointed by the FSCA’s decision, which in our view does not reflect the substantial engagements with and representations to the FSCA,” it said.
The company added that it also made material improvements to its systems and compliance frameworks.
“Banxso remains committed to the highest standards of client care and regulatory integrity and will engage the available legal avenues to ventilate and defend its position fully,” it said.
“We will continue to rely on our legal team, including senior counsel and regulatory experts, to challenge the FSCA’s decision through the appropriate statutory channels.”