FSCA Takes Firm Action Against Unlicensed Financial Advice.

The FSCA recently debarred Petrus Rasmus Erasmus from offering financial services for five years and issued an administrative penalty of R1.18 million, which includes the cost of the investigation.

An FSCA investigation revealed that Erasmus had been operating as a financial services provider (FSP) without a licence. He solicited funds from clients, which he used to trade in Contracts for Difference (CFDs), a high-risk financial product.

He also issued trading signals, which are considered financial advice, guiding clients to trade based on his recommendations. Many clients suffered significant financial losses.

Under Section 7(1)(a) of the FAIS Act, it is a serious contravention to provide any financial service or advice without proper authorisation. The FSCA has made it clear that issuing trading signals or managing trades without a licence is not only unethical, but also unlawful.

What can consumers do to protect themselves?

Before accepting investment guidance or trading tips:

• Check authorisation using the FSCA’s database to confirm whether the person is licensed.

• Verify that the FSP number matches the business or individual offering the service.

• Understand the scope of the licence to ensure the individual is authorised for the specific product category.

The FSCA continues to monitor and act against unregulated activity in the financial sector. This case serves as a reminder that confident sales pitches and trading advice should never come at the cost of compliance.