The FSCA has fined forex broker JP Markets SA (Pty) Ltd R100 000 for contravening the regulations governing the trade in over-the-counter (OTC) derivatives.
The Pretoria-based company provides the platform and technology for its clients to trade forex on international financial markets. OTC derivatives are privately traded financial contracts that are generally regarded as fairly high risk.
The Authority said on Wednesday an investigation found that JP Markets enabled clients to trade in contracts for difference relating to forex pairs, shares, and indices on a trading platform, although JP Markets was not authorised to act as an over-the-counter derivative provider (ODP). JP Markets conducted unauthorised ODP business as envisaged in section 2 of the ODP Regulations.
Three years ago, the FSCA successfully applied for JP Markets’ liquidation, arguing it needed to be wound up to protect the public.
In October 2021, the Supreme Court of Appeal (SCA) overturned the liquidation order in a unanimous ruling, finding that the liquidation was not just and equitable. However, the SCA confirmed that the business of JP Markets fell within the definition of an ODP.
Following the SCA’s ruling, the FSCA said it would consider “all outstanding enforcement actions”, adding that JP Markets was not licensed as an ODP, and it was not entitled to conduct the business of such a product provider.
Read: FSCA reacts to overturning of JP Markets liquidation order
