It’s a well-known fact that certain online brokers offering contracts for difference to their clients without the requisite licence have been sent a cease and desist letter by the Financial Sector Conduct Authority .
“There are less than a handful of us non-banking brokers that have been issued with ODP licences, and this is because the licence conditions are stringent. The FSCA is intent on cleaning up an industry that needed cleaning up to be honest. Online traders want to know who is regulated and who isn’t, because this gives them some level of comfort that there is an external regulator keeping an eye on things.
“We have been approached by several operators in the last few weeks since our ODP licence was awarded to see if they can trade under our licence. This, of course, is an opportunity for us, but we have to observe the requirements of our licence and make sure we stay within the boundaries allowed by the licence. But it is almost certain that there will be some consolidation among brokers in SA as a result of the heavy penalties that apply to those continuing to operate without the correct licence.
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