Anyone who approaches the Financial Services Board (FSB) can pick up a financial services provider (FSP) number for three months and remain on the FSB online database indefinitely.
This became clear when Fin24.com did a search on the FSB's website to determine the trading status of failed derivatives trader Dealstream Securities.
On Monday it emerged that Dealstream, one of South Africa's largest contracts for difference (CFD) market-makers, had closed up shop and client accounts had been emptied.
The firm's failure has seen private traders and at least one AltX-listed company, Vox Telecom, lose a great deal of money.
"From the moment a company contacts the FSB call centre (with the intention of becoming a registered financial institution) they are issued with an FSP number," said Manasse Malimabe, head of the FAIS division of the FSB.
"Firms then have three months in which to complete all relevant documentation to process their registrations," he said.
Dealstream's FSP number is listed as 29 541 on the FSB's site, but its record has been marked as cancelled.
The Financial Advisory and Intermediary Services Act (FAIS) department of the FSB is responsible for issuing licenses, assessing financial services firms and taking action against firms who fail to comply with FSB legislation.
The department is also responsible for 'risk-based supervision' of financial service providers and their compliance with legislation. This includes on-site visits to FSPs and liaison with compliance officers.
Malimabe confirmed that Russell Leigh, the MD of Dealstream, was the contact person for this licence. However neither the FSB contact centre, communications or FAIS departments were able to confirm when the licence application had been received or cancelled.
Malimabe was "not aware" of the circumstances surrounding Dealstream's collapse or that the business had gone under.
- Fin24.com
Dealstream shows FSB flaw
History repeats itself. Remember (the quadriplegic) Keith Scott of SAM (Scott Asset MAnagers)? He too was a respected trader who built up quite a reputation managing a "Magnum" fund for the founder of Dions, a gentleman by the name of Friedland. He managed 100%+ annual performances when the mean was a mere 18% and became quite a guru. Scott went on to become a futures trader (registered with SAFEX) and to cut a very long story very short, swindled the opublic and PACT (Performing Arts Council of the Tvl) of some R300+ million. He, unlike Dealstream, showed up as a member in good standing of both the FSB and SAFEX. Fat lot of help!!! When the brown stuff hit the fan neither body did anything and investors lost all. The liquidation div was approximately 3%, probably more than will be the case with Dealstream. SAM, SCOTT ASSET MANAGERS, REFLECTED AS A MEMBER IN GOOD STANDING OF THE FSB WHILST LIQUIDATION PROCEEDS WERE BEING INSTITUTED AND CERTAIN GULLIBLE PEOPLE LOST MONEY IN THIS PERIOD!!!!!!!!!!!!!
Surely if this is a FAIS issue and presumably FICA as well how could the FSB allow them to ply their trade without getting all the details and signing off the deal. Don't belive you can trade as a private individual with an online company until all the documentation is completed by these on line companies. FSB should manage their accountabilities a lot better than they are after all tehy were set up as the watch dog for all financial services
you won't get any financial players to allow themselves to be quoted on it, but I think the overall market concencus is that the fsb is pretty incompetent. Sadly there is little sign things will improve in the forseeable future.