SA forex broker has bank accounts frozen, regulator files urgent liquidation application – News24

SA forex broker has bank accounts frozen, regulator files urgent liquidation application – News24
  • The Financial Sector Conduct Authority has filed an urgent application with the High Court to liquidate South African-based JP Markets.
  • The company’s bank accounts have been frozen and an investigation is ongoing. 
  • JP Markets describes itself on its website as a “global Forex powerhouse” and “Africa’s biggest forex broker” and has over 41 000 Facebook followers as well as a number of apparent industry accolades.

The Financial Sector Conduct Authority has filed an urgent application with the High Court to liquidate South African-based forex broker JP Markets amid an ongoing investigation.

According to a statement from the regulator on Wednesday, JP Markets has also had its bank accounts frozen. This follows the company’s licence being provisionally suspended in June.

The regulator warned clients that no activity would be possible from the company’s bank accounts for a fixed period.

“This means that JP Markets will no longer be able to operate on these [bank] accounts and they will remain frozen for a specific duration in terms of legislative parameters,” the FSCA said.

According to the regulator, JP Markets “contravened financial sector laws, including but not limited to running an unlicensed over-the-counter derivatives provider (ODP) business”.

Over-the-counter derivatives are securities usually traded directly through a dealer network, rather than being listed on a central exchange. This means that the parties to the transaction can be exposed to a higher risk.

Risk to clients

The company’s licence was suspended due to “reasonable belief that substantial prejudice to clients or the general public” could occur if JP Markets continued to deliver financial services, the FSCA said.

It warned the public that derivatives-platform trading is high-risk and suitable only for investors with “the required knowledge, skills and experience”.

“The public should carefully consider whether trading in such financial instruments is suitable for them,” it said.

In June, JP Markets appeared to have taken issue with the suspension. A petition against the sanction – which is no longer available to view – was posted on its social media at the time.

On the company’s website, a licence issued by the Financial Services Board, the FSCA’s predecessor, is dated effective from 2016.

‘Forex powerhouse’

The company describes itself on its website as a “global Forex powerhouse” and “Africa’s biggest forex broker”, and features multiple glowing testimonials from clients as well as a number of industry accolades.

It has over 41 000 followers on its Facebook page.

“One complaint many people have about brokers is that they trade against their clients. Our clients face no such issues,” its profile reads.

An emailed query to JP Markets did not immediately receive a reply. However, an automated response from the company described it as “licensed and regulated by the Financial Services Board, South Africa”.

The reply included a disclaimer that “You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.”

Should a detailed response from JP Markets be received, this story will be updated.

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