FSCA - Afrikan Heroes

South Africa Suspends ZAR X, Uprise.Africa’s Crowdfunding Partner

August 24, 2021

The Financial Sector Conduct Authority (FSCA) in South Africa has suspended ZAR X ’s exchange license.

“The suspension resulted from ZAR X’s non-compliance with section 8(1)(a) of the Financial Markets Act (FMA), read with Regulation 8 and 43(2) of the FMA Regulations, which relate to the liquidity and capital adequacy requirements of an exchange,” the FSCA said in a statement.

“We don’t take this regulatory action lightly, given its impact,” FSCA commissioner Unathi Kamlana said in a statement. “Our view, however, is that this is a necessary step to safeguard market integrity and the interest of issuers and the broader investing public. This is the cornerstone of our mandate as the FSCA.”

The first new stock exchange in South Africa in 58 years, ZAR X, was established five years ago. The exchange was founded after new regulations allowed new rivals to enter the market, including the JSE.

The exchange promised to resolve share trades substantially faster than the JSE. Senwes and Runway Property Group are two of the few companies that have listed on the market.
On behalf of the Government Employees Pension Fund, the Public Investment Corporation (PIC) purchased a 25% share in the exchange in 2018.

The market, however, is now facing closure, with the FSCA threatening to revoke its license in three months unless it addresses the watchdog’s concerns regarding capital sufficiency. In the meanwhile, ZAR X must provide weekly progress updates to the FSCA.

Uprise.Africa And ZAR X’s Partnership

In 2019, Africa’s first equity crowdfunding, Uprise.Africa, and ZAR X came to an agreement that would see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market.

Startups In South Africa Which Crowdfund Will Now Be Listed On Stock Exchanges

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

South African Regulator Apologizes After Crypto Gaffe

May 14, 2021

South Africa’s Financial Sector Conduct Authority (FSCA) has apologized to a Cape Town-based crypto startup, Ovex, less than 24 hours after warning that the firm was operating outside the law. In its retraction, the financial watchdog said the findings of an investigation into Ovex, which specializes in crypto arbitrage services, suggest that the firm is operating outside the FSCA’s purview.

The statement says:

Based on the information provided by Ovex we are satisfied that Ovex does not currently require a licence from the FSCA, as its business activities fall outside the current jurisdiction of the FSCA. The previous media release has been retracted.

Meanwhile, the FSCA’s about-face comes after its head of enforcement, Brandon Topham, was quoted in the local media defending the regulator’s initial handling of the matter. Responding to a media inquiry, Topham admitted that the issuing of the warning did not mean Ovex was “operating unlawfully.” Instead, the warning statement, according to Topham, was intended to urge the investing public to be cautious when dealing with Ovex “as they are making claims of returns.”

However, according to a report, the FSCA executive did admit at the time that the regulator might have “jumped the gun” and that an amendment to its warning statement would be made once more information was obtained.

In the meantime, the same report also carried Ovex’s initial response to the “damaging” warning that it said was “issued without giving the company time to respond to questions sent earlier in the week.” In its statement, Ovex said:

It seems [as if] there may have been panic, and the announcement was made without proper process. Ovex always acts in a 100% compliant, legal, and ethical manner, seeking legal and compliance advice with every action.

The crypto firm also said it had stopped its advertising campaign until this issue was resolved and that it expected the FSCA to issue a full retraction.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry