The Financial Sector Conduct Authority (FSCA) was wrong to shut down JP Markets, then SA’s largest online broker with more than 300 000 clients, according to a judgment handed down by the SCA yesterday.

The court overturned a 2020 ruling by the Gauteng High Court (Johannesburg) for the liquidation of JP Markets and ordered the FSCA to pay the costs of two counsel for JP Markets.

The ruling gives relief to 16 other online brokers the FSCA told Moneyweb were under investigation for regulatory transgressions.

The FSCA says it will abide by the SCA’s judgment and commence processing the application by JP Markets for an over-the-counter (OTP) product provider licence.

It added that ‘JP Markets is not licensed as an OTP product provider, neither is it entitled to conduct the business of an OTP product provider, until a decision has been made by the authority on the status of its application’.

JP Markets CEO Justin Paulsen said the ruling overturns the liquidation order ‘and what is encouraging is that it was the unanimous verdict of all five judges at the SCA’.

‘Our business was unlawfully destroyed by the FSCA and there has to be accountability for that,’ he added.

JP Markets had argued that the FSCA had overstepped its regulatory powers by liquidating a company that was not insolvent and that was attempting to bring itself under the ambit of the law by applying for a so-called over-the-counter derivatives provider licence, which is required for the trading of a type of derivative product known as contracts for difference.

Full Moneyweb report

FSCA statement

Judgment