On the back of the recent BHI Trust scandal, which has rocked the investment world and realised billions of rand lost, we look at some of the investment signs that investors should take caution of and look at some of the safeguards investors should consider when choosing a financial product or investment. Notably, the distinction between regulated and unregulated options becomes increasingly apparent.
Financial regulators are the watchmen of the financial markets. They are there to ensure that the entities under their purview adhere to the established regulations and operate in the best interest of their investors. While the allure of potentially higher returns may draw investors towards unregulated investment vehicles, the risks associated are substantially higher.
Thankfully, as an investor, there are steps that you can take to ensure that your investment is regulated. When in doubt, seek professional advice. Regulated firms with qualified professionals can provide you with the insights and guidance you need to make informed investment decisions. As reported by Reuters, the FSCA’s head of enforcement, Gerhard van Deventer, acknowledged the regulatory gaps, stating that cryptocurrencies were not yet classified as financial products, thus excluding the FSCA from its regulatory boundary. “We are in the process of bringing crypto into the regulatory fold,” van Deventer indicated .