The Financial Services Board (FSB) of South Africa issued on Thursday warning notices against forex brokers Invest Acquired Holdings and AK Dollar Traders. The two entities provide financial advice and intermediary services without being authorized to do so.
Moreover, Invest Acquired Holdings purports to be an authorized Financial Services Provider (FSP), working under the wing of FSB-regulated Pal Life CC. The cited company, however, has denied having any relation with Invest Acquired Holdings.
AK Dollar Traders, on the other hand, has refused to provide clients access to their own funds. The FSB said it had received complaints from clients that their money invested with the broker has never been paid back and that they have not received promised returns on their investments.
The watchdog warned investors to act with caution when dealing with either of the unauthorized entities.
The website of Invest Acquired Holdings is no longer available and that of AK Dollar Traders is hard to find.
The FSB is the regulatory body of South Africa’s non-banking financial services industry, which, in addition to forex entities, includes retirement funds, short-term and long-term insurance, companies, funeral insurance, schemes, collective investment schemes (unit trusts and stock market) and financial advisors and brokers.
South Africa has been increasingly attracting forex service providers, regulated or nonauthorizes.Many well-known forex brokerages are expanding their operations there. Since the beginning of 2016, AvaTrade, HotForex, ForexTime (FXTM), and Xtrade obtained FSB licenses. XM has also applied and is awaiting a decision. The market is attractive with an over-the-counter (OTC) forex trading volume of $21 billion as at April 2016. The figure is flat compared to three years earlier, but has grown significantly from $5 billion in 1995, $10 billion in 2001 and 2004, and $14 billion in 2007 and 2013.