JP Markets SA (Pty) Limited v Financial Sector Conduct Authority

JP Markets SA (Pty) Ltd operated a large over-the-counter (OTC) derivatives business, primarily offering contracts-for-difference (CFDs) to clients, acting as principal (so‑called B‑Book clients). Although it held a Category 1 financial services provider (FSP) licence under the FAIS Act, it did not hold an OTC Derivative Provider (ODP) licence as required by regulations under the Financial Markets Act 19 of 2012 (FMA). The Financial Sector Conduct Authority (FSCA), after receiving client complaints and conducting an investigation that was still ongoing, applied urgently to the Gauteng Division of the High Court for JP Markets’ winding-up under s 96 of the FMA and s 38B of the FAIS Act. The High Court granted a final liquidation order, holding that JP Markets’ failure to apply timeously for an ODP licence and its continued operation without such licence justified winding-up on a just and equitable basis. JP Markets appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the FSCA’s winding-up application with costs, including the costs of two counsel.

The judgment clarifies the scope of the FSCA’s powers under s 96 of the Financial Markets Act, confirming that an investigation need not be concluded before regulatory enforcement steps are taken. Importantly, it establishes that liquidation of a solvent financial institution is an exceptional remedy that must be closely linked to achieving the objects of the FMA and requires careful consideration of proportionality and alternative remedies. The case is significant for balancing regulatory enforcement with fairness in the financial markets.