Since october 2004 the fsb has turned down 17 advisers applying for financial advisers' licences and suspended two others
The South African regulator has rejected applications from 17 financial advisers for licences and has suspended two who had already been granted licences.
The Financial Services Board (FSB) said it had authorised around 9,700 licences under the 2002 Financial Advisory and Intermediary Services (FAIS) Act since October 2004 and declined 17. The FSB said it had received around 14,500 licence applications from financial advisers.
The licences issued to two intermediaries, M R Dennis, who trades as M R Dennis and Associates, and Kenstead Investment Holdings, have been provisionally suspended by the FSB. Gerry Anderson, deputy executive officer of market conduct and consumer education at the FSB, said the licences have been suspended "after numerous complaints from investors. M R Dennis was placed under provisional sequestration on 15 April and is operating under provisional trustees."
The first nine applicants to be rejected were African Assistant Company, Blue Pointer Trading 4, Christine Patricia Cameron, Leaderguard Securities, Nolan Loxton, NW Solutions, Philip Henry Lorenzo Chambers, Stanley Makgate and the Financial Boutique 2004. A tenth applicant, Kerford, had its application declined and then lodged an appeal. But the intermediary has subsequently withdrawn from the appeal process.
Anderson said: "The FSB declined the application by Leaderguard Securities as its activities did not comply with the code of conduct for forex services providers. In addition, the company had been placed in provisional liquidation on 23 March 2005. We have appointed external inspectors to conduct an investigation into the affairs of Leaderguard and all its intermediaries.
"It seems that Leaderguard Spot Forex, the company based in Mauritius through which clients traded, wants to make a compromise proposal to investors. Intermediaries who give clients advice on the compromise proposal should act with caution not to contravene their licensing conditions or any exemption granted to them in terms of the authorisation. Clients are warned not to waive their rights in entering into a compromise proposal."
The latest seven unsuccessful applicants are Aero and General Insurance Brokers, Albion Insurance Underwriters Brokers, Isambulo Investments, JNF Investments, Kobus Karsten, Luvhomba Financial Services and Ronald Desmond Cruse.
Anderson said the unsuccessful applicants could appeal to the FSB Appeal Board, which is an independent tribunal, if they are unhappy about the decision.
The South African government has revealed that the Exchange Control Amnesty, which began in February 2003 and lasted one year, will boost its revenue by more than R50bn (£4.12bn). Deputy finance minister Jabulani Moleketi said around R2.3bn (£180m) could be raised from the 35,198 applications that have been processed.
The government said 43,000 applications were filed under the amnesty. All applications are expected to have been processed by the end of May 2005 and finalised before October. In February 2003, the South African Revenue service estimated that around R90bn (£7.42bn) had been put offshore illegally.
In return for investors declaring to the Revenue Service how much money they had put offshore, the South African government said it would levy a tax of only 5% on money repatriated during the amnesty and 10% on assets that investors wanted to keep offshore.
Out of a total of 14,500 applications received, the FSB has authorised 9,700 financial intermediaries since October 2004 and rejected 17. Two advisers have been suspended.
The Exchange Control Amnesty will make the South African government a total of R50bn ($7bn)
All applications for the amnesty should be processed by the end of May.
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