South Africa Financial Sector Conduct Authority withdraws Medbond Markets and Medbond Insurance Brokers financial services provider licences after misappropriation findings

The South Africa Financial Sector Conduct Authority has withdrawn the financial services provider licences of Medbond Markets and Medbond Insurance Brokers, following an investigation into advice and investment management linked to products purportedly issued by Lombard International. The decision finalises a provisional withdrawal initiated in August 2021 after the firms were given an opportunity to make representations. Medbond Insurance Brokers had been authorised to provide Category I advice and intermediary services, while Medbond Markets had been authorised to provide Category 2 intermediary services. The Authority found that Medbond Insurance Brokers gave inappropriate financial advice that led clients to invest in non-existent financial products, and that Medbond Markets acted as a discretionary manager for client investments into a Group Variable Annuity purportedly issued by Lombard International Life Ltd, allowed client deposits to be received by unauthorised entities, and participated in arrangements that misled clients. A flow-of-funds analysis indicated client investments were misappropriated, resulting in financial losses, and the Authority cited material contraventions including section 2 of the General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003, section 7(3) of the Financial Advisory and Intermediary Services Act, 2002, and section 2(b) of the Financial Institutions (Protection of Funds) Act, 2001.