The Financial Sector Conduct Authority (FSCA) of South Africa has initiated a comprehensive investigation into Sanus Financial Services, the entity behind online trading platforms EZInvest and Financix. This probe follows a series of complaints lodged by clients against the company. The FSCA's investigation will also examine the roles of Sanus directors Nicolaas Louw and Bradley Bickham Distras, as well as Annette Smyth, who serves as the company's sole key individual.
Sanus Financial Services is an authorised financial services provider, licensed to offer intermediary services related to derivative instruments and short-term deposits. The company provides clients with access to the EZInvest and Financix trading platforms, which facilitate trading in derivative instruments. While the FSCA did not disclose the exact number of complaints received or provide specific details of the allegations, it emphasised that the serious nature and volume of complaints necessitated a full investigation.
The FSCA's investigation aims to determine whether Sanus Financial Services and the three individuals in question contravened financial sector laws. These laws include provisions of the Financial Advisory and Intermediary Services Act, the General Code of Conduct for authorised financial services providers and representatives, and the Fit and Proper Requirements for financial services providers. Sanus has held an authorised financial services provider status since June 2021.
EZInvest and Financix offer trading in various financial instruments. Financix, for instance, provides access to forex trading, stocks, and commodities, describing its services as execution-only. The platform warns clients that contracts for difference (CFDs) are leveraged products that carry inherent risks. The FSCA's investigation will scrutinise these practices to ensure compliance with regulatory requirements.
This investigation is part of the FSCA's broader efforts to enhance enforcement across the financial sector. In the year to March, the regulator concluded 678 investigations and imposed penalties totalling almost R2.9 billion. This marks a significant increase from the previous year, when penalties amounted to about R120 million. The majority of these penalties, R2.48 billion, were related to contraventions of the Financial Advisory and Intermediary Services Act.
The FSCA has been actively engaged in monitoring and regulating the financial sector, receiving 7,842 complaints during the year and issuing 140 scam alerts. The regulator also took decisive action against non-compliant entities, withdrawing 14 licences, suspending 31, and debarring 68 individuals. FSCA commissioner Unathi Kamlana highlighted the regulator's focus on maintaining fair and effective regulatory outcomes in an increasingly complex and rapidly evolving financial sector.
The FSCA stressed that the investigation into Sanus Financial Services, EZInvest, and Financix does not imply that any of the parties involved have breached financial sector laws. The investigation is ongoing, and no findings have been made at this stage. The regulator's actions underscore its commitment to protecting clients and maintaining the integrity of the financial sector.
Key points
- The FSCA investigation into EZInvest and Financix follows multiple client complaints.
- Sanus Financial Services is an authorised financial services provider.
- The probe may lead to penalties if breaches of financial sector laws are found.
