Wealth Migrate SA (Pty) Ltd has been approved as a Category I Financial Services Provider
Online investing portal Wealth Migrate SA (Pty) Ltd has been approved as a Category I Financial Services Provider – FSP 47394, which allows it to provide its crowdfunding offering (when a group of people club together to fund a project or venture) on an intermediary services basis using shares as a financial product category.
This marks the completion of a long journey that Wealth Migrate began about a decade ago. CEO Scott Picken said: “To put this into perspective, we worked with the Financial Sector Conduct Authority or 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.
“With the approval of Wealth Migrate SA’s Category I licence by the FSCA, Wealth Migrate is the leader in obtaining the relevant financial product category approval from the South African financial services industry regulator. We now have the required approval and licensing from the FSCA that allows us to offer our crowdfunding business model to investors,” Picken added.
He said that the Category I licence approval, “which represents an important achievement for Wealth Migrate, SA and the whole continent”, comes at a time when the Covid-19 pandemic has ushered in an increased adoption of online and digital platforms.
ACFA head Elizabeth Howard welcomed the news, saying: “You are not only the first in Africa to be officially regulated, but you also have the only platform which is purpose built with our own IP and integrated into a European PSP [payment service provider] with European regulation.”
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.”
Our 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, Picken said.
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. Unfortunately, Picken was misquoted in the media, so it seemed he had said the firm was already regulated. 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. “This allows us to pursue our purpose, which is to close the wealth gap,” he said.