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The Financial Services Conduct Authority has withdrawn the operating licence of Ecsponent Financial Services – and slapped it with a fine of R3 million for unlawfully marketing high-risk preference shares in its holding company to pensioners.

EFS is a subsidiary of JSE-listed financial services group Ecsponent Limited.

EFS marketed the products without conducting appropriate suitability testing to check that no undue risk was posed to its clients, said the regulator.

In addition to the fine and the withdrawal of its licence, the company has also agreed to re-evaluate clients retrospectively, work with the regulator on a strategy to deal with those clients, and work toward redress for them. The FSCA previously suspended EFS’s licence for two weeks pending the outcome of its investigation, which had been ongoing for seven years. The investigation was initiated after “several complaints” from the public.

Ecsponent Limited did not fall under the FSCA’s jurisdiction, the regulator noted, so it focused its investigation only on EFS, which is an authorised financial services provider. — fin24.com.