Latest news with #FSCA
Daily Maverick
3 days ago
- Business
- Daily Maverick
Bitcoin reaches fever pitch — but always know what you're buying, say experts
TikTok traders, crypto evangelists and Bitcoin havens paint a picture of quick wins and easy exits. On Daily Maverick's Decrypting Crypto webinar, experts reminded investors that volatility, risk and regulation are all part of the crypto package. At more than R1-million a coin, Bitcoin's latest bull run is once again flooding feeds with promises of overnight wealth. Amid the media noise, experts are stepping in, urging caution: don't buy into something you don't understand. That was the message at Daily Maverick's Decrypting Crypto webinar, hosted by senior journalist Lindsey Schutters, in conversation with Christo de Wit, country manager of Luno, and Diketso Mashigo, head of the Financial Sector Conduct Authority's (FSCA's) licensing department. 'There's obviously a lot of clamour in the market,' Schutters said. 'Bitcoin is at an all-time high, it's a lot of money and everyone's trying to get in.' Don't invest in what you don't understand 'It is very important that people really get to understand what it is that they're buying into, what they're investing in and understand what the risks are,' Mashigo said. He stressed that the regulator expected authorised providers to actively educate their clients, especially when it came to a volatile asset such as crypto. While that may sound obvious, the crypto space is designed to move fast, often faster than many retail investors can realistically follow. Goals before gains 'When it comes to any kind of investment, whether it's crypto or not, it's important to have understanding and a very clear idea what your financial goals are, both short term and long term,' De Wit said. Crypto is notorious for its wild swings. Bitcoin itself has gone from R300,000 to R1-million, with some stomach-churning dips in between. 'Crypto is a higher risk asset class, and there is a lot of volatility,' De Wit said. Having a fundamental understanding of this was crucial in informing oneself when investing in crypto. Fractional ownership, full exposure A common crypto myth is that one needs to own a full coin to get started; an idea De Wit was quick to dispel. 'I think it's important for new-time investors to understand that you don't have to purchase an entire Bitcoin. You can purchase a fraction of it,' he explained. 'Even though Luno or the centralised exchange custodies it and keeps it in safekeeping, you have immediate access to further trade it, to withdraw it, to convert it back to rands, to convert it to other currencies.' The trick is choosing a credible licensed provider. 'Very carefully select your centralised exchange,' De Wit said. 'You can verify that on the FSCA website as well, to make sure that you know this is a cryptocurrency exchange platform that is licensed.' If your slice of the coin gains value, so does your investment. 'Any growth or loss, depending on what the market does, is related to the percentage that you hold,' De Wit said. Users can convert crypto to rands, transfer between wallets and even send Bitcoin to friends, which are growing trends in parts of the country. 'The whole Garden Route is becoming a crypto haven,' Schutters said. 'A lot of [people] are using stablecoins because they're just easier to transact with.' What does it mean to 'own' crypto? Ownership in the crypto space doesn't always look like traditional finance, but it follows similar principles, Mashigo explained. 'If I purchase a financial product, my ownership in that asset is represented somehow,' he said. 'And in this space, you can look at tokens. That, proportionately, is what I'm holding in that particular asset.' But how do you know that ownership is real and respected? De Wit pointed out a crucial consumer safeguard: proof of reserve. An important aspect to look out for is whether an exchange showcases proof of reserve, which is an audited report that validates that all consumer crypto currencies are exactly where the platforms say they are, he said. It's one of the most transparent ways users can confirm their holdings exist and they're not being lent out or siphoned off without consent. The three golden rules Mashingo broke down FSCA's consumer guidance into three pillars for anyone considering a crypto investment: Understand the product. Know exactly what you're buying, how it works and if it addresses your needs. Know the risks. Volatility, market swings and speculation are part of crypto's nature. Be ready to stomach the sudden drops. Verify the platform. 'Understand the party or the platform or the venue or the provider that you're dealing with, whether they're licensed or not,' said Mashigo. 'That's simple. You come through us. You check on our website, pop us an email, and we can confirm.' Growing regulation Mashigo made it clear that the FSCA was here to make sure that people knew what they were getting themselves into. 'We make sure that … certain basic things are in place,' said Mashigo and specified that businesses had to be contactable, transparent and authorised to do what they claimed. With crypto asset providers (CASPs) now being brought under formal licensing and regulatory oversight in South Africa, the hope is that consumer protection will continue to improve. DM
News24
3 days ago
- Business
- News24
PrimeXBT becomes an FSCA-regulated Crypto Broker in South Africa
PrimeXBT, a leading multi-asset broker, has expanded its FSCA licence to include Crypto Asset services in South Africa. With this development, PrimeXBT strengthens its position as an industry-leading global broker offering both crypto and traditional financial instruments under a regulated framework in the country. This milestone marks a meaningful step toward safer, more accessible crypto trading in South Africa and across the broader region. South African traders now have access to a unified trading environment that combines crypto and traditional markets in one place. Clients can deposit and withdraw in BTC, ETH, USDT, USDC, and USD, open fiat and crypto-denominated accounts on MT5, PXTrader, and Crypto Futures, use crypto as margin, and settle trades directly in their chosen digital asset. They can also exchange stablecoins with USD or from crypto to crypto using the built-in exchanger. In addition to crypto trading, PrimeXBT offers access to Forex, Stock, Commodity, Crypto and Index CFDs, all available through leading platforms such as MT5. Clients can choose to fund their accounts using crypto, USD, or local currency, with multiple convenient regional payment methods supported. With a secure, locally tailored setup, PrimeXBT is built to support both new and experienced traders. 'By expanding our FSCA-regulated offering to include crypto asset services, we're reinforcing our commitment to delivering an all-in-one trading experience that prioritises trust, access, and innovation,' said Sihle Tuta, Head of Region at PrimeXBT South Africa. 'Our goal is to lead the way in regulated crypto adoption across Africa, setting a new standard for what modern brokers should deliver. Financial growth starts with trust, and our mission is not just to help people trade, but to help them grow. That means offering knowledge-building opportunities, trader flexibility, and a secure infrastructure that adapts to the needs of real traders.' Alongside its expanding product offering, PrimeXBT continues to invest in regional development through educational seminars and free online learning resources. From first-time investors to professionals, PrimeXBT remains committed to helping every client trade and grow with confidence. The company also remains focused on supporting local communities as part of its corporate social responsibility (CSR) efforts across South Africa and beyond. This addition to PrimeXBT's regulated operations further strengthens its reputation as a compliant and forward-thinking broker. As demand for regulated crypto access grows, PrimeXBT remains committed to empowering traders to do more with their crypto and explore new opportunities, all within a secure, flexible and innovative trading environment. Start trading with PrimeXBT South Africa. Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website. PrimeXBT (PTY) LTD is an authorised financial services provider in South Africa with licence number 45697. PrimeXBT (PTY) LTD acts as an intermediary between the investor and the market maker which is the counterparty to the products purchased through PrimeXBT.
IOL News
3 days ago
- Business
- IOL News
The legal implications of Buy Now, Pay Later services in South Africa
Explore the complexities of Buy Now, Pay Later services in South Africa, examining the legal challenges and regulatory uncertainties that could impact consumers and providers alike. Image: Shutterstock Buy Now, Pay Later (BNPL) payment options have strutted onto South Africa's financial runway with the swagger of innovation—offering interest-free instalments, bypassing traditional credit checks, and boasting sleek user interfaces that make old-school lay-bys look prehistoric. For consumers, it feels like a dream: swipe today, split it tomorrow. For platforms, it's fintech gold. But beneath the surface of this frictionless façade lies a regulatory grey zone thick with risk, ambiguity, and potential litigation. Is BNPL empowering consumers, or quietly indebting them? And when the legal hammer finally drops, who's left holding the bill? BNPL services allow consumers to make purchases immediately and pay for them in installments over a set period, usually without interest if payments are made on time. However, as BNPL usage increases, so do concerns around consumer debt, regulatory arbitrage, and financial exclusion. The central question in South Africa is whether BNPL products fall within the ambit of the National Credit Act (NCA) or the Financial Advisory and Intermediary Services Act (FAIS Act). The National Credit Regulator is responsible for compliance with the NCA, while the Financial Sector Conduct Authority (FSCA) is responsible for compliance with the FAIS Act. The South African BNLP landscape The consumer credit environment in South Africa is governed by the NCA, which regulates all credit providers and mandates affordability assessments along with other consumer protection mechanisms. BNPL providers often argue that they are not credit providers, as their terms and conditions do not constitute a credit agreement. This is because they charge no interest and operate within a very short payment cycle (e.g. 4 to 6 weeks). As a result, many BNPL firms claim exemption from NCA obligations. According to the Intergovernmental Fintech Working Group (IFWG), BNPL currently falls into a regulatory void. The NCR has taken limited action against providers, while the FSCA has yet to issue clear guidance. Consumers thus face reduced transparency, no guaranteed recourse mechanisms, and inconsistent contract terms. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ BNPL's legal classification determines the scope of regulatory obligations. If BNPL is credit, then the NCA mandates affordability checks, registration with the NCR, and extensive disclosures (amongst other things). However, most BNPL operators avoid these obligations by structuring their offerings as payment solutions or deferred billing. The FAIS Act regulates financial advice and intermediary services. BNPL providers rarely claim to offer financial advice, and as such, FAIS oversight is generally not invoked. This ambiguity causes a jurisdictional conflict between the NCR and FSCA, with little resolution. Moreover, South African consumers are often unaware of potential late fees, the implications of missed payments, or the lack of legal recourse, especially when providers collapse or change terms unilaterally. While legal classification remains unresolved, enforcement action against BNPL providers in South Africa has been minimal. In practice, the NCR's enforcement has focused largely on traditional credit providers, while the FSCA's mandate remains unclear in the absence of explicit statutory triggers. This lack of supervisory clarity raises risks of selective compliance, where only larger players seek legal advice or act preemptively, while smaller or offshore providers bypass South African oversight altogether. Moreover, without designated supervisory frameworks, enforcement becomes reactive, often occurring only after consumer harm has materialised. The Conduct of Financial Institutions Bill (COFI Bill) is envisaged to address these regulatory gaps. A modern regulatory regime must therefore address not only classification and jurisdiction, but also enforcement mechanisms, investigative powers, and co-ordinated oversight, possibly through inter-agency memoranda of understanding or joint supervisory task teams. Without this, regulatory gaps become systemic vulnerabilities. Global BNLP landscape United Kingdom: The Financial Conduct Authority (FCA) will regulate BNPL under new legislation taking effect in 2026. Providers will be required to conduct affordability checks, obtain FCA authorisation, and ensure clear disclosures. Consumers will be granted Section 75 protections under the Consumer Credit Act. Australia: The Australian Securities and Investments Commission (ASIC) has introduced legislation bringing BNPL under the National Consumer Credit Protection Act. From mid-2025, providers must hold a credit license, conduct responsible lending assessments, and comply with disclosure obligations. These requirements are tailored to balance innovation with consumer protection. United States (US): The Consumer Financial Protection Bureau (CFPB) has classified BNPL loans accessed via digital accounts as 'credit cards', triggering protections under Regulation Z. Dispute resolution, refunds, and chargeback rights are now part of BNPL transactions, although industry litigation may reverse this. These models demonstrate that proactive regulation, coupled with flexibility, is essential for managing BNPL risks. Comparative legal analysis of South Africa South Africa's current dual-regulator model (NCR and FSCA) is ill-equipped for the digital fragmentation of modern finance. The lack of a clear BNPL regulatory framework stands in contrast with jurisdictions where regulators have already expanded definitions of credit to include BNPL explicitly. Key takeaways include: The UK's reliance on disclosure and licensing. Australia's focus on credit licenses and suitability assessments. The US approach of function-over-form classification (if it behaves like a credit card, it is regulated like one). The hope is that the COFI Bill will reconcile its institutional gaps and avoid regulatory arbitrage by expanding statutory definitions and enforcing consistency. Fintech partnerships and platform liability BNPL services are frequently integrated directly into online retail platforms via Application Programming Interfaces (API) partnerships. This embedded finance model raises questions of liability, especially when the BNPL provider operates outside the regulatory net. In South Africa, it is unclear whether a platform offering BNPL at checkout could be deemed to be providing or facilitating credit under the NCA. Retailers and marketplaces must consider whether they are indirectly exposing themselves to liability or reputational risk, especially if their BNPL partners engage in misleading conduct, impose unlawful fees, or collapse without notice. Globally, regulators are beginning to scrutinise not just BNPL providers, but also the platforms and merchants who offer such services. The UK's FCA, for example, has signalled that contractual and operational accountability may extend beyond the primary credit provider. South African platforms should pre-emptively assess their BNPL partnerships through the lens of operational risk, consumer protection, and reputational resilience. Digital identity and affordability in a credit-light economy One major challenge for effective BNPL regulation in South Africa lies in consumer verification and affordability assessments. Without a robust credit history or consistent income documentation, many consumers who use BNPL services remain invisible to traditional risk models. This opens the door to over-indebtedness, particularly among the underbanked. Future BNPL regulation must therefore account for the reality of fragmented digital footprints and low formal credit participation. There is room for innovation: open banking frameworks, mobile payment data, and transactional analytics could support dynamic affordability models. However, this would require legal certainty around data access, privacy, and proportional use of financial profiling. BNPL operators who proactively invest in these tools, backed by transparent disclosures and consent practices, will likely be best positioned when regulation catches up. BNPL has redefined consumer finance by promising simplicity and speed, but the country risks repeating mistakes seen in unregulated microcredit booms if it fails to address its regulatory gaps. Global trends show that regulation can evolve in tandem with technology. By embracing reform and cross-sector collaboration, South Africa can lead in creating a safe, competitive digital finance ecosystem. * Lamola and De Meyer are partners at Webber Wentzel. PERSONAL FINANCE
The Citizen
5 days ago
- Business
- The Citizen
Your money, your rules – these are your banking rights
Your banking rights are protected by the Code of Banking Practice compiled by the Financial Sector Conduct Authority. When you pay your money into your bank account, your money remains yours and therefore you should have rights attached to your money and your bank account. Having a bank account is not just about keeping your money safe but about having financial security, making payments easily and accessing services that improve your life. In short: your bank owes you. Banks are required to treat all customers fairly and cannot discriminate based on income, gender, race or background. However, despite these regulations, many consumers continue to face challenges in accessing financial services due to high costs and complex requirements. Therefore, Cheslyn Jacobs, chief commercial officer at TymeBank, says you should understand your rights as a consumer when it comes to banking. 'Understanding your rights helps you to make informed choices and ensures that your bank treats you fairly. It allows you to confidently navigate banking services, question unfair charges and take advantage of the benefits and protections available to you as a customer. 'When you know what to expect, you can make financial decisions that best serve your needs and long-term goals.' The Code of Banking Practice guides how banks should treat you. The Financial Sector Conduct Authority (FSCA) also ensures compliance with the code. Jacobs says these rights include: Your right to a bank account You have the right to open a bank account, provided you meet some basic requirements, such as proof of your identity, proof of residence and sometimes proof of income. You may also need to provide a minimum opening deposit. ALSO READ: FSCA finds banks do not handle consumer complaints properly Your right to clear information about bank charges It is important to know the costs associated with your account, Jacobs says. Banks are required to clearly explain all fees, charges and interest rates before you open an account. Always ask for a list of all costs upfront, check your bank's website and regularly review your bank statements. Your right to switch banks If you are unhappy with your bank's service, fees, or policies, you have the right to move your money to another bank. Jacobs says it is easier than ever to switch banks. 'Compare options and choose a bank that offers affordable, transparent and secure banking when you switch.'. ALSO READ: FSCA to investigate banks charging different amounts for the same product Your right to have your privacy and security protected Your bank must protect your personal and financial information and cannot share your details without your consent unless required by law. However, Jacobs points out, safeguarding your financial security is also your responsibility. 'To protect yourself, always use strong, unique passwords for online banking and enable two-factor authentication where possible. Be cautious of phishing scams and never click on suspicious links or share your banking details over the phone, email, or text unless you are 100% certain of the recipient's identity. 'Regularly monitor your bank statements for any unauthorised transactions and report them immediately. When using ATMs, be aware of your surroundings and shield your PIN entry. If you lose your card or suspect fraud, notify your bank as soon as possible to block unauthorised access. By staying vigilant and following these steps, you can help keep your financial information secure.' ALSO READ: FSCA fines African Bank R700 000 for misleading advertising [VIDEO] Be on the lookout for fraud and stay aware According to the South African Banking Risk Information Centre (Sabric), an organisation that works with banks, law enforcement, and regulators to combat fraud, nearly R3.3 billion was lost to fraud in 2023. Digital banking fraud increased by 45%, and banking app fraud by 89%. 'Criminals are using advanced technologies, and therefore it is important to stay informed,' Jacobs says. Look out for a bank that offers security features such as: Biometric verification that protects you against identity theft. DebiCheck, which allows you to approve transactions before money is deducted. Multi-factor authentication by using a One-time PIN (OTP) to verify transactions. Security updates must be done regularly to protect your account against fraud. Tips and updates via various communication channels, including SMS, social media and email on how to protect your money. ALSO READ: Consumer Protection Act and your rights How the Consumer Protection Act adds to your banking rights The Consumer Protection Act (CPA) protects you from unfair treatment, misleading information and hidden fees from your bank. It ensures you receive fair and transparent financial services. Jacobs says if your bank fails to meet these standards, you have the right to take action to protect yourself and hold them accountable. He says when you have a problem with your bank, you must start by trying to resolve your complaint directly with the bank, as the Code requires all financial institutions to have internal dispute resolution processes. 'Clearly outline the issue, provide any supporting documents and request a formal response. If the bank does not resolve your complaint satisfactorily and you believe you have been treated unfairly, you have the right to escalate the matter.' If you believe that your bank did not comply with the CPA, you can approach the National Consumer Commission (NCC) for complaints about unfair business practices, such as misleading advertising or hidden fees. ALSO READ: Financial service provider giving you problems? The NFO can help Other regulators that can help to protect your banking rights The National Financial Ombud Scheme South Africa (NFO) is an independent organisation dedicated to resolving consumer complaints against financial service providers, including banks, credit providers and insurers. Their services are impartial, confidential and free of charge. You can visit the NFO's website to lodge a complaint. Concerns related to financial advice or investment products can be investigated and mediated by the Ombud for Financial Services Providers (FAIS Ombud). Jacobs says these regulatory bodies have the authority to enforce corrective action, ensure that consumers are treated fairly and that banks comply with consumer protection laws. 'By taking these steps, you can assert your rights, seek fair treatment and contribute to greater accountability in the financial sector. 'Many South Africans do not realise they have banking and consumer rights. Understanding these rights helps you to make informed choices and protect yourself from unfair treatment or fraudulent activity.'
The Citizen
6 days ago
- Business
- The Citizen
The actual cost of non-compliance with Fica
'Any accountable institution, whether in property, legal, crypto or lending, is at risk if compliance lapses occur.' In the past 18 months, institutions in banking, legal, and financial services have faced steep penalties for non-compliance with the Financial Intelligence Centre Act (Fica). Some South African commercial banks have been sanctioned with fines ranging from R7.7 million to more than R50 million. These are not outliers, they reflect a clear regulatory shift toward stricter enforcement. Sameer Kumandan, MD of SearchWorks360, said that while much has been said about Fica obligations, less attention is paid to what happens when businesses fall short. 'The penalties are not limited to financial institutions. Any accountable institution, whether in property, legal, crypto or lending, is at risk if compliance lapses occur.' ALSO READ: FSCA fines 3 financial services providers R1.2 million for Fica non-compliance How Fica penalties are determined He said the type of punishment depends on the severity of the violation. Regulators apply a structured framework that considers both mandatory and discretionary factors. 'These include the nature, duration, seriousness and extent of the contravention, as well as whether the conduct was intentional, reckless or negligent. 'The regulator will also assess whether the entity gained any financial or commercial benefit from the non-compliance and if there was any remedial action taken once the issue was identified.' A business's compliance history matters too. Institutions with prior contraventions or those seen as repeat offenders can expect harsher sanctions, as can those found to have obstructed investigations or withheld key information. Fica sanctions Kumandan said sanctions range from a written caution or public reprimand to a remediation directive, restriction or suspension of business activities, and administrative fines of up to R10 million for individuals and R50 million for companies. For more serious breaches, particularly those involving an element of intent, criminal charges may be brought, with potential fines of up to R100 million or imprisonment up to 15 years. Senior managers, directors and employees involved in the breach may be held personally liable. ALSO READ: Prudential authority fines Absa R10 million for FICA non-compliance Common non-compliance issues 'Most Fica penalties stem from recurring failures such as inadequate or generic risk management and compliance programmes (RMCPs), poor customer due diligence, incomplete recordkeeping, failure to submit reports like cash threshold reports and insufficient training,' said Kumandan. 'These are not technicalities – they are central to the act and form the basis of most enforcement actions. In one case, a legal firm was fined R7.7 million for failing to implement an RMCP or train its staff. 'A financial services provider was penalised for failing to report suspicious transactions in a timely manner. These are the kinds of 'basic' oversights that now carry serious consequences.' The pressure is industry-wide He added that the uptick in enforcement isn't limited to large financial institutions. In recent months, law firms, insurers, financial advisers and crypto platforms have all faced enforcement actions. 'Fica applies across sectors and smaller firms are not immune. If you deal with money, you are accountable.' Avoiding penalties requires more than good intentions Fortunately, regulated entities have access to automated compliance platforms that facilitate the prevention of fraud, money laundering and regulatory breaches. He said these tools reduce manual oversight, simplify regulatory reporting and ensure Popia-compliant data handling. They also automate Know Your Customer (KYC)/Know Your Business (KYB) verification processes and can generate suspicious transaction and compliance reports as requested by regulators. 'One of the big selling points of automating Fica compliance is ongoing monitoring. Often, a business will conduct its due diligence at the start of a relationship with a client, only for that client to engage in illicit and illegal activities down the line. 'Ongoing monitoring helps accountable institutions to assess and manage risks continuously, during the onboarding process and throughout the business relationship. 'By tracking client profiles daily, accountable organisations keep tabs on all transactions as they happen and they are alerted to any changes that might indicate a compliance risk.' NOW READ: The risks of doing business with politically exposed persons
