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JSE Launches ‘Verify a Broker’ Tool

20 May 2024 Johannesburg Stock Exchange (JSE)

With scams on the rise, the JSE has launched a new user-friendly, free tool that empowers people looking to invest their money to check whether the financial professionals they deal with are credible, before making any investment decisions.

Many scammers target people who are looking to invest and grow their money. These fraudsters often promise big profits with little or no risk, misleading people into putting their money into schemes that sound too good to be true. Recognising this risk, the Johannesburg Stock Exchange (JSE) has introduced ‘Verify a Broker’, an online tool designed to help people confirm if the stockbrokers and financial service providers they deal with are real and credible. This tool supports anyone who wants to make safer investment choices by ensuring they deal only with legitimate professionals and companies.

Stockbrokers are professionals who provide support with the buying and selling of stocks on markets like the JSE. They can be essential for anyone looking to invest in shares because they have the expertise and tools to carry out trades effectively. Alongside stockbrokers, there are other types of Financial Service Providers, or FSPs, who offer a variety of financial services. These include financial advisors, fund managers, and insurance brokers, each playing a unique role in helping manage investments. ‘Verify a Broker’ confirms the authenticity of these various financial experts, ensuring they are legitimate.

The ‘Verify a Broker’ tool works by providing a consolidated view of the JSE’s stockbroker database from the database managed by the Financial Sector Conduct Authority (FSCA), the regulatory body that oversees financial professionals and organisations in South Africa. Every financial services provider, including stockbrokers, must be registered with the FSCA to operate legally. By searching using the organisations’ name or financial services provider number against this database, the tool ensures that the financial professionals you as an investing are considering are officially recognised and meet all regulatory standards, giving you peace of mind when you decide to invest through them.

"The tool is easy to use and helps everyone – from grandparents investing for their grandchildren to young professionals inspired by finance influencers on social media – to make sure their financial professionals are credible. We want South Africans to feel confident and informed when making investment decisions with their hard-earned money. This tool makes the investment process more transparent and safer," said Nongcali Rubushe, Head of Retail and Business Enablement at the JSE.

How to identify a scam
Scams often rush people to invest urgently, pressuring them not to miss out on a chance to earn big profits from a “guaranteed” investment. One common trick is the advance fee scam, where fraudsters ask for money upfront, promising larger profits later. Another scam is telemarketing fraud, where scammers pretend to be employees or consultants from the JSE to fool people over the phone. They also create fake JSE profiles on social media and websites to steal money or personal information.

The JSE or any of its representatives will never call to get your personal information or ask you to invest money over the phone. The only way to trade directly on the JSE, is through an authorised stockbroker and a list of stockbrokers can be found on www.jse.co.za/brokers/find-a-broker.

Protect yourself from scams
“If it sounds too good to be true, it usually is. Research any investment opportunity independently of what any salesperson or website provides you. Never rush into an investment opportunity. If you are rushed or told not to discuss it with others, it’s likely you’re being scammed. There is no such thing as a guaranteed return on an investment,” said Rubushe.

“Protecting investors and entrenching financial literacy is key for us at the JSE. As the largest exchange in Africa, we are acutely aware of the role we play in uplifting our society and equipping people from all walks of life with the tools and information that enables them to protect their financial interests, make informed decisions, and pursue their investment goals with confidence."

To use the ‘Verify a Broker’ tool, please visit https://www.jse.co.za/verify-a-broker-or-fsp. If you encounter a potential scam, report it immediately by emailing info@jse.co.za.

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