Another company South Africans are being warned to steer clear of
The Financial Sector Conduct Authority (FSCA) has warned South Africans to steer clear of another financial services provider after provisionally withdrawing the licence of Imermarket (Pty) Ltd.
In a statement on Thursday, 2 July, the FSCA cited concerns that its continued operations could pose a serious risk to clients and the public.
The move comes shortly after the regulator took similar action against online trading platform Mixirite (Pty) Ltd, highlighting growing concerns over the practices of some firms operating in South Africa’s investment and trading industry.
The FSCA said it had provisionally withdrawn Imermarket’s financial services provider licence following preliminary findings from an ongoing investigation.
“The FSCA is concerned that there is a real risk of harm to clients and/or the general public if Imermarket continues its operations as a financial services provider,” the regulator said.
According to the authority, investigators identified several troubling practices. These include what it described as “apparent aggressive, manipulative and high-pressure sales techniques” used by the company’s agents when dealing with clients.
The regulator also alleged that financial advice was being provided by individuals who were not authorised representatives, and that clients were pressured into making deposits even after expressing concerns.
In addition, the FSCA said Imermarket appeared to have failed to conduct appropriate suitability and needs analyses before recommending financial products.
It also raised concerns that clients were not given sufficient information about the risks associated with their investments and that the company had failed to honour and process withdrawal requests.
As a result of the provisional withdrawal, Imermarket is no longer permitted to conduct financial services business or accept additional funds from clients.
“The consequence of the provisional withdrawal is that Imermarket is unable to conduct any further financial services business or receive any additional funds from clients,” the FSCA said.
However, the regulator stressed that the action is not final and is based on preliminary findings.
Growing number of licences being withdrawn
The authority said it will make a final decision only once the investigation has been completed and after considering any submissions made by the company.
“In the interim, Imermarket has been afforded an opportunity to provide reasons why the provisional withdrawal should be lifted or not made final,” the regulator said.
The FSCA added that its investigation remains ongoing and may expand if further information comes to light. It also noted that it is limited in the amount of detail it can disclose while the investigation is underway to preserve the integrity of the process.
The action against Imermarket follows a similar intervention involving Mixirite (Pty) Ltd, another South African financial services provider that operates online trading platforms, including UMarketPro and Protea Markets.
Mixirite offers retail investors access to foreign exchange, shares and commodities, but the FSCA has also provisionally withdrawn the company’s licence while investigating its business practices.
The regulator said it was similarly concerned that allowing Mixirite to continue operating could expose clients and the public to harm.
According to the FSCA, preliminary findings pointed to “apparent aggressive, manipulative and high-pressure sales techniques” used by the company’s agents, as well as financial advice allegedly being provided by unauthorised individuals.
The authority also raised concerns about promises of unrealistic or guaranteed investment returns, failures to conduct appropriate suitability assessments, and inadequate disclosure of investment risks.
Like Imermarket, Mixirite is no longer allowed to conduct financial services business or receive additional funds from clients while the investigation continues.
The FSCA reiterated that the withdrawal of Mixirite’s licence is provisional and that the company has been given an opportunity to respond before a final decision is made.
The regulator said it will provide further updates on both investigations once they have been concluded.
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