Online investing portal, Wealth Migrate South Africa, has been approved as a Category I Financial Services Provider (FSP 47394). This new status will allow the company to provide its crowdfunding offering on an intermediary services basis, using shares as a financial product category.
The announcement marks the completion of a long journey that Wealth Migrate began about a decade ago. CEO Scott Picken commented, “To put this into perspective, we worked with the Financial Sector Conduct Authority (FSCA), formerly known as Financial Services Board for 10 years to allow this to happen, including creating the African Crowdfunding Association [ACFA] in 2015. Wealth Migrate always had the objective to offer our crowdfunding offering to investors within a regulated environment. Obtaining our Category I licensing approval signifies the achievement of this objective.”
The ACFA has been campaigning with many platforms from all over Africa to bring in a regulatory framework to ensure compliance, said Picken. “Now that there is someone who can work and engage with the regulator and give them peace of mind it provides a catalyst for growth for SA and the continent as a whole.”
According to Picken, the company’s Category I licence approval also provides investors, who are used to dealing with regulated companies and financial services providers, with a greater sense of security and peace of mind.
After a crowdfunding event it arranged in October 2015, the first of its kind in SA, Picken had said the company would love to be regulated, but at the time there was no regulation. The then FSB (now FSCA) responded by saying that Wealth Migrate was not regulated, though was quick to add that there were no crowdfunding regulations in place, so the company was not doing anything illegal.
This led to Wealth Migrate setting up the ACFA with 24 other partners from around Africa in November 2015, which started the process of defining best-practice guidelines and getting the space fully regulated.
For Picken, obtaining the Category I licence approval allows Wealth Migrate SA to maintain its commitment to using technology to remove the middleman, cut costs and increase trust and transparency.