Wealth manager breaches Act

Patrick Cairns

International wealth manager Chase Buchanan has been offering services to SA clients without authorisation. The Financial Services Conduct Authority (FSCA, formerly FSB) confirms this is in contravention of the Financial Advisory and Intermediary Services (Fais) Act.

Its website states Chase Buchanan “is an independent financial advisory company, which provides unbiased financial solutions to both corporate and private clients in the UK and based internationally”. The company’s headquartered in Cyprus.

Moneyweb received a copy of an e-mail by a Chase Buchanan representative, offering services to ex-pats resident in SA. The e-mail appeared to be soliciting interest in the firm’s services:

“I am writing specifically to make you aware of a solution which can benefit British ex-pats living in South Africa and foreign nationals with frozen UK pensions – the possibility of consolidating and transferring a UK pension to a self-invested personal pension …”

Asked to provide details of the licence under which it was authorised to offer such financial advice or intermediary services in SA, the representative replied:

“Only investment firms headquartered in South Africa are regulated directly by the FSB, whereas we provide cross-border services using our MiFID Passport; our regulatory authority is CySEC,” adding that the company’s profile on CySEC’s website reveals SA is one of the countries in which it is licensed to provide cross-border financial advice.

Not authorised

But FSCA’s Caroline da Silva says this is incorrect.

“MiFID II only applies to entities providing investment services or performing investment activities in the European Union (EU), including when those services or activities are rendered in the EU but to clients outside the EU. The passporting provisions only apply to member states. South Africa is not a member state.”

Da Silva said no one, local or foreign, may provide financial services in SA unless they’re authorised as a financial services provider or appointed as a representative of an authorised FSP, whether or not they’re authorised/regulated in another jurisdiction.

Even marketing a service you’re not authorised to provide falls foul of the Act.

Moneyweb

Christo Wiese, through entities in the control of his family trusts, has instituted claims amounting to R59 billion against Steinhoff. The amount comprises two claims: first, for the transaction that saw Wiese vend his 52% stake in Pepkor – a privately-held business started by his parents in 1965 – into Steinhoff in 2015.

The second claim relates to the subscription of shares Wiese entered into when Steinhoff undertook a capital raising in 2016, to fund the Mattress Firm acquisition in the US.

In a letter with the summons, Wiese’s attorneys state he believes