The Financial Sector Conduct Authority (FSCA) has intensified its scrutiny of online investment and trading platforms, with more than 10 active investigations underway, amid mounting consumer complaints.
Speaking during a roundtable discussion last week at the FSCA Conference 2026, Phumeza Mabuza, departmental head of enforcement at the FSCA, said the financial regulator has prioritised the investigation of online trading and investment platforms due to the scale of losses suffered by investors.
Online trading is booming in SA, with this growth being attributed to the surge in consumer appetite for investing, technological advancements and increased internet penetration, she noted.
However, this rise has also seen a large number of unscrupulous platforms masquerading as legitimate companies.
“We saw that there's a lot of harm to consumers and people are suffering as a result of this area,” Mabuza explained. “We have finalised some investigations and the biggest penalty that we've imposed relates to this kind of conduct, underscoring the seriousness of the issue.”
According to Mabuza, the FSCA’s investigations have identified systemic issues in how online trading platforms −particularly those offering complex products, such as contracts for difference and foreign currency-denominated instruments − are marketed and distributed.
“The products are complex, they are high risk; however, they are easily accessible. There’s prioritisation of accessing the products without looking at the consumer protection,” she noted.
Another key concern is the scale and intrusiveness of the marketing of these platforms across social media sites, with artificial intelligence increasingly being used in promotional campaigns, including deepfake content featuring well-known personalities.
“There’s heavy social promotion… it’s in our houses, it’s in our phones, it’s in our bedrooms. You don’t have to go out and seek this kind of investment,” she said.
“You would see a famous, rich person that pops-up and says you can invest in this kind of investment. Obviously, an average person would say: I want to make so much money as well.”
Online trading in SA has grown into a mainstream segment of the financial services market, driven largely by retail participation and digital platforms.
SA’s online trading platform market generated about $115.9 million (±R2.1 billion) in revenue in 2025, and is projected to reach $201.3 million (R3.72 billion) by 2033, growing at a 7.2% CAGR, according to Grand View Research.
The broader local trading ecosystem is significantly larger when including forex and derivatives.
According to FX Trading Africa, forex-related trading activity alone reaches roughly $2.21 billion (R40.89 billion) traded daily in SA, with about 190 000 active traders.
Youth participation has reportedly increased by over 400% in recent years, driven by social media and digital tools, it says.
The FSCA has also flagged widespread failures by online platforms in assessing investor suitability, with high-risk products being marketed indiscriminately across age groups and income levels.
The regulator’s analysis of completed investigations reveals a consistent pattern of losses among retail investors, Mabuza pointed out.
“It doesn’t matter how old you are, you could be 75 years, and in terms of marketing it, a person could sell their house to invest their funds. In all the cases, more than 80% of the clients lose out, and we’re talking big money.”
This is exacerbated by structural conflicts of interest, where platforms also act as counterparties to client trades.
“The very same platforms that are advertising are sitting on the other side of the transactions as counterparties. If they are also party to the transaction, they're not going to lose.”
According to Mabuza, another major concern is the use of offshore platforms operating in jurisdictions with limited or no regulatory oversight.
“There is no cover or protection for the customer,” Mabuza warned.
The FSCA is also closely examining the rise of copy trading and mirror trading models, which allow inexperienced investors to automatically replicate the trades or strategies of more experienced investors.
“Copy trading means that you replicate another [experienced] trader’s trading automatically. The FSCA is considering potential policy and legislative interventions in this area.
“We are looking very, very closely at that and will influence regime reforms, to see how we can prevent that from happening.”
According to industry pundits, copy trading often carries high risks because the copier links a portion of their funds to a "master" or "lead" trader's account. When the expert opens or closes a position, the same action occurs automatically in the copier’s account.
Strengthening oversight
Alongside its enforcement efforts, the FSCA says it is accelerating its adoption of supervisory technology (suptech) to improve its ability to detect and respond to market risks.
Also among the panellists at the conference, Phokeng Mogase, chief digital officer at the FSCA, said the regulator is investing in digital capabilities to become more data-driven and proactive.
The FSCA’s dual focus on enforcement and suptech reflects a broader effort to keep pace with rapidly-evolving financial services models, particularly in the online trading space.
Mogase emphasised that traditional supervisory approaches are no longer sufficient in a fast-evolving digital financial ecosystem.
“We recognise that investing in such technologies gives us an opportunity to become more data-centric, to become more responsive,” she noted. “We will never be effective as supervisors if we don’t rely on the technology that is out there.”
Central to the FSCA’s suptech strategy is the development of an Integrated Regulatory System, designed to unify data, streamline processes and improve regulatory visibility.
“What it seeks to do is to make sure we can integrate all our internal processes, [and create a] single view of a customer from the FSCA point of view,” Mogase explained.
This capability looks to eliminate inconsistencies in regulatory actions, such as simultaneously licensing and sanctioning the same entity.
The system intends to also enhance responsiveness and service delivery, including improved tracking of service level agreements and more efficient engagement with industry participants.
Progress on digital roadmap
Mogase confirmed the FSCA has completed key phases of its digital transformation programme, including the digitisation of regulatory returns and the development of a risk-based supervisory model.
“I stand here with pride that we are done with phase one and phase two, which is the risk model,” she said.
The regulator is now refining its “omni-risk return” framework, which defines the data inputs required to power its risk analytics capabilities.
“We’ve received industry feedback and what we’re busy doing right now is actually reflecting on those comments and what its impact is going to be on our project timelines.”
As digital platforms continue to expand access to high-risk investment products, the regulator is signalling a more assertive stance − combining investigations, penalties and technological innovation to strengthen market conduct oversight and protect consumers, she concluded.
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