7 Warning Signs Your CFD Broker Is Operating Under a Borrowed Licence

Last updated: June 2026

There is a specific type of forex scam in South Africa that does not look like a scam at all. The broker has a real FSP number. You can check it on the FSCA register and it comes back valid. The company appears regulated. Everything looks legitimate.

But the FSP number does not belong to the company you are trading with. It belongs to someone else.

This is what the industry calls a "borrowed licence" — and it has already cost South African traders hundreds of millions of rands.

What a Borrowed Licence Actually Means

Here is how the structure works under South African financial regulation.

The Financial Advisory and Intermediary Services (FAIS) Act allows a licensed Financial Services Provider to appoint authorised representatives and juristic representatives. A juristic representative is a separate company — its own legal entity — that renders financial services under the licence of the parent FSP.

In theory, this is a legitimate business arrangement. The licence holder supervises the representative. The representative operates under the licence holder's compliance framework. The FSCA holds the licence holder accountable for everything the representative does.

In practice, this structure gets abused. The licence holder "rents out" its FSP licence to a separate trading platform for a fee. The trading platform uses the licence number on its website and marketing materials. But the licence holder has no real oversight of how the platform operates, how it markets to clients, or what happens to client funds.

This is licence borrowing. Company A holds the licence. Company B runs the actual trading platform under Company A's regulatory cover. If Company B disappears with your money, Company A says it was not involved in day-to-day operations. You are left chasing a company that never held a licence in the first place.

The FSCA has acknowledged this problem. Board Notice 194 of 2017, which took effect in April 2018, introduced stricter capital adequacy and fit-and-proper requirements for juristic representatives — a direct response to licence-renting abuse. The upcoming Conduct of Financial Institutions (COFI) Bill is expected to restrict the juristic representative model even further, potentially eliminating it entirely for discretionary investment management.

But right now, the loophole still exists. And brokers are still exploiting it.

Why This Is Dangerous for You as a Trader

When you deposit money with a broker that operates under a borrowed licence, several things can go wrong:

No real supervision. The licence holder may have no idea what the trading platform is doing with your funds. They signed an agreement, they collect a fee, and they look the other way. Your money is being handled by a company that has no independent regulatory obligation to you.

Denial of responsibility. If something goes wrong — and in every major case in South Africa, something has gone wrong — the licence holder will argue that the trading platform acted outside its authority. The trading platform will argue that it was regulated. Neither takes responsibility.

Mass collapse. When the FSCA withdraws the licence holder's FSP, every entity operating under that licence loses its regulatory cover simultaneously. If three platforms are running under one licence, all three go down at once. That is exactly what happened with Mixirite.

The Case That Exposed Everything

In June 2026, the FSCA provisionally withdrew the financial services provider licence of Mixirite (Pty) Ltd (FSP 50382). Mixirite was a Category I FSP — an intermediary authorised to provide advice and intermediary services in derivative instruments.

Three trading platforms were operating under Mixirite's licence as authorised representatives:

• UMarketPro
• Protea Markets
• Randfox

None of these platforms held their own independent FSCA licences. They all operated under Mixirite's FSP number. When traders checked the FSCA register, they saw a valid licence. What they did not see was that the licence belonged to Mixirite, not to the platform they were actually sending their money to.

The FSCA's investigation revealed something even more damaging: 84 of Mixirite's 108 authorised representatives had previously been registered under AfriMarkets — a company whose licence the FSCA had already permanently withdrawn. And 44 of those representatives had worked across all three entities: AfriMarkets, Banxso, and Mixirite.

This was not a coincidence. It was the same sales operation, migrating from one licence to the next as regulators shut each one down.

Six victims who came forward to Moneyweb reported collective losses of approximately R4.5 million through UMarketPro alone. The actual total is almost certainly much higher.

And this was not the first time. Banxso (FSP 37699) had its licence permanently withdrawn in July 2025 after the FSCA found it had misappropriated client funds, provided false information to clients and to the regulator, and promised unrealistic returns. The FSCA imposed a R2.16 billion administrative penalty — the largest in South African financial regulatory history. Its directors were debarred for 30 years. Investor losses exceeded R3 billion. Over 4,200 formal complaints were filed.

AfriMarkets Capital (FSP 52813) was shut down the same year. Same violations. Same playbook. Same connected individuals.

The pattern is clear: when one licence gets pulled, the operation moves to a new one. Different company name. Different FSP number. Same people. Same tactics. Same outcome for traders.

The 7 Warning Signs

Here is how to spot a broker that may be operating under a borrowed licence — before you become the next complaint on the FSCA's desk.

1. The FSP Number Belongs to a Different Company

This is the single most important check you can do. Go to the FSCA FSP register and search for the FSP number shown on the broker's website. If the company name that comes up is different from the name of the trading platform you are using, that platform is operating under someone else's licence.

UMarketPro displayed an FSP number on its website. That number belonged to Mixirite. Not to UMarketPro. If you had checked the register, you would have seen the mismatch immediately.

This takes two minutes. Do it before you deposit a single rand.

2. The Company Was Registered Recently but Claims to Be "Established"

Check the company's registration date on the CIPC database. If the entity was incorporated in the last 12 to 18 months but the website talks about "years of experience" or "trusted by thousands of traders," something does not add up.

Mixirite was registered in 2021. The platforms operating under it were newer still. Yet their marketing material positioned them as established, trusted brokers with long track records. That track record belonged to the licence holder — not to the platform handling your money.

3. Aggressive Cold-Calling or WhatsApp Recruitment

Legitimate brokers do not cold-call you on WhatsApp promising to change your life. Legitimate brokers do not slide into your DMs on Instagram with screenshots of trading profits.

This is exactly how Mixirite's representatives operated. Facebook ads, Instagram campaigns, WhatsApp follow-ups. The ads promised returns of R500,000 per month from a starting investment of R4,300. That is a return of approximately 11,527% per month. The best hedge fund managers in the world average 20 to 30% per year.

If someone contacts you first — especially via social media or messaging apps — and the conversation leads to forex trading, treat it as a red flag. Not a yellow flag. A red flag.

4. Promises of Guaranteed Returns or "Automated" Trading Profits

No legitimate financial services provider in South Africa can guarantee returns. It is illegal under the FAIS Act. Any broker or representative who tells you that you will make money — not might, but will — is breaking the law.

The language is always the same: "Our AI trading system generates consistent profits." "Our automated bot does the work for you." "Just deposit and watch your money grow."

CFD and forex trading is leveraged speculation. The FSCA requires that all providers disclose this clearly. Most retail traders lose money. If a broker is not telling you this upfront, they are not complying with their regulatory obligations — assuming they have any.

5. The Platform Brand Name Does Not Match the FSP Holder

This is a variation of warning sign number one, but it deserves its own point because of how common it is.

If you are trading on a platform called "XYZ Markets" but the FSP licence is held by "ABC Financial Services (Pty) Ltd," you need to understand what that means. You are not a client of the regulated entity. You are a client of a representative of the regulated entity. The regulatory protection you think you have may be far thinner than you assume.

Always ask the broker directly: "Are you the FSP licence holder, or are you operating as a representative of another entity?" If they cannot give you a clear answer, that tells you everything.

6. High-Pressure Onboarding: "Deposit Now to Lock In Your Bonus"

Urgency is a manipulation tactic. Legitimate brokers do not pressure you to deposit immediately. They do not offer time-limited bonuses that expire in 24 hours. They do not tell you that a "special rate" is only available today.

This was a core part of the Banxso and AfriMarkets playbook. Representatives — who the platforms euphemistically called "success managers" — would push new clients to deposit as quickly as possible. The faster the money came in, the harder it was for the client to step back and do proper due diligence.

If a broker is rushing you, they do not want you to check their credentials. Ask yourself why.

7. The Withdrawal Process Is Slow, Blocked, or Requires Additional Deposits

This is often the moment traders realise something is wrong. You try to withdraw your funds and suddenly there are conditions: a minimum trading volume requirement you were never told about, a "processing fee," a "tax clearance" payment, or a request to deposit more before you can withdraw.

In the Banxso case, agents continued to mislead clients about the company's licence status even after the FSCA had suspended it, encouraging further deposits. Withdrawal requests were delayed, blocked, or simply ignored.

If you cannot get your money out cleanly and quickly, you have a serious problem.

How to Protect Yourself: A Practical Checklist

Do this before you deposit money with any broker:

• Verify the FSP number matches the platform name. Go to the FSCA register. Search the FSP number. The company name must match the broker you are dealing with. If it does not, you are dealing with a representative, not the licence holder.
• Check the authorised products. The FSP must be authorised for "Derivative instruments" (Category I, Subcategory 1.13). If the broker offers forex and CFD trading but the FSP is not authorised for derivatives, the broker is operating outside the scope of its licence.
• Search the FSCA's enforcement actions. The FSCA publishes warnings, debarments, and licence withdrawals. Search for the broker's name, the FSP holder's name, and the names of any directors or key individuals. If any of them appear on the enforcement list, walk away.
• Check BrokerToolsHub's Scam Tracker. We track FSCA warnings, licence withdrawals, and reported scam brokers in one searchable database. If a broker has been flagged, you will find it there.
• Use BrokerToolsHub's Find My Broker tool. Answer a few questions about your trading needs, and we will match you with brokers that are properly regulated — not operating under borrowed licences.
• Never deposit more than you can afford to lose on your first trade. This is not just risk management advice. It is scam protection. If a broker turns out to be problematic, you want your exposure to be minimal. Start small. Test the withdrawal process before committing larger amounts.
• Read our Regulation Guide. Understand what FSCA regulation actually means, what protections it provides, and — critically — what it does not cover.

What to Do If You Are Already With a Suspicious Broker

If you are reading this and recognising the warning signs in your current broker, do not panic. But do act quickly.

Step 1: Attempt a withdrawal immediately. Request a full withdrawal of your available balance. Do it in writing — email, not a phone call. You want a paper trail. If the withdrawal processes normally, you may have dodged a bullet. If it is delayed, blocked, or met with conditions, move to the next step.

Step 2: Document everything. Take screenshots of your account balance, all transactions, all communications with the broker and any representatives. Save emails. Save WhatsApp messages. Download your trading history if the platform allows it. You will need this evidence.

Step 3: File a complaint with the FSCA. You can submit a complaint through the FSCA's online portal or contact them directly. Provide your evidence — the FSP number, the broker name, the communications, and a clear description of what happened. The FSCA cannot recover your money directly, but your complaint contributes to investigations and enforcement actions.

Step 4: Report the broker on BrokerToolsHub's Scam Tracker. Your report helps warn other traders. The more reports we collect against a specific entity, the clearer the pattern becomes.

Step 5: Contact your bank. If you deposited via EFT, your bank may be able to assist with a dispute — especially if the broker's bank accounts have been frozen by the Financial Intelligence Centre, as happened with Banxso. If you deposited via credit card, you may have chargeback options. If you deposited via crypto, recovery is unfortunately extremely unlikely.

Step 6: Do not deposit more money. This sounds obvious, but it is the most common mistake. The broker will tell you that you need to deposit more to "unlock" your withdrawal, pay a "fee," or meet a "minimum threshold." This is a second extraction. Do not fall for it.

The Bigger Picture

The FSCA collected R119.8 million in administrative penalties during the 2024/25 financial year. It debarred 131 individuals, suspended 24 licences, and withdrew 382 licences. It issued 107 public warnings.

South Africa tops global charts for risky financial advertising on social media. A recent analysis found that 37.5% of finance-related ads on Meta platforms in South Africa were scams. A TransUnion survey found that 68% of South Africans were targeted by some form of fraud between August and December 2024.

The regulators are fighting back. The R2.16 billion penalty against Banxso sent a clear message. But enforcement takes time, and new entities pop up faster than old ones can be shut down. In the time it takes the FSCA to investigate and act, thousands of traders can lose money.

Your first line of defence is not the regulator. It is you.

Check the licence. Verify the name. Test the withdrawal. And if anything feels off, trust that feeling and walk away.

Browse verified brokers on our broker comparison page — every broker listed has been checked for proper, independent FSCA regulation. No borrowed licences. No shell companies. No games.

Have you traded with a broker that showed warning signs? Report it on our Scam Tracker to help protect other South African traders.