FSCA Regulated Forex Brokers in South Africa

FSCA Regulated Forex Brokers in South Africa

Trading as FSP Name FSP No Status
Alpari International Exinity Limited 50320 Authorised
AvaTrade Ava Capital Markets (Pty) Ltd 45984 Authorised
DMA SCM DMA (Pty) Ltd 40983 Authorised
Easy Equities First World Trade (Pty) Ltd 22588 Authorised
ExCentral OM Bridge SA 48296 Authorised
Exness Vlerizo (Pty) Ltd 51024 Authorised
FXCM FXCM SA (Pty) Ltd 46534 Authorised
FXTM ForexTime Limited 46614 Authorised
GT247 Purple Group 46315 Authorised
HotForex HF Markets Limited 46632 Authorised
IG Markets IG Markets SA Limited 41393 Authorised
Infinox Infinox Capital (Pty) Ltd 50506 Authorised
Markets.com TradeTech Markets SA (Pty) Ltd 46860 Authorised
Pepperstone Pepperstone Group Limited 49497 Processing
Plus500 Plus500 AU (Pty) Ltd 47546 Authorised
QuickTrade QuickTrade (Pty) Ltd 45262 Authorised
Scope Markets Scope Markets SA (Pty) Ltd 47025 Authorised
ThinkMarkets TF Global Markets SA (Pty) Ltd 49835 Authorised
Tickmill Tickmill (Oracle) SA Limited 49464 Authorised
Trade Nation Trade Nation Financial (Pty) Ltd 49846 Authorised
Velocity Trade Velocity Trade Financial Services (Pty) Ltd 43295 Authorised

The Financial Sector Conduct Authority (FSCA) is a regulatory body in South Africa for the non-banking financial services sector. FSCA has been responsible for regulating the non-banking financial services industry since 2018.

FSCA was established as a successor to the Financial Services Board (FSB). It is an independent body and has a mandate to supervise and regulate the non-bank financial services industry in the public interest.

Note: FSB was the governing body responsible for regulation of the non-banking financial services industry in South Africa from 1990 to 2018.

Currently, the foreign exchange (forex) industry is South Africa is not formally regulated in the same way licensed financial institutions are regulated by the South African Reserve Bank (SARB). It is recommended that forex brokers in South Africa become authorised by FSCA but it is not obligatory.

Note: SARB is the primary financial regulator in South Africa and its purpose is to achieve a sound, efficient banking system in the interest of the depositors of banks and the economy as a whole.

 

What is the role of the FSCA?

 

The Financial Sector Conduct Authority (FSCA) is a relatively newly-established governing body, although it has its roots in the old Financial Services Board (FSB). The FSCA is highly regarded as a competent regulatory authority in South Africa.

The FSB was originally founded as part of the FAIS Act of 2003 to root out and deal with corruption and improper dealings within insurance and pensions companies.

The regulations created to govern the insurance and pensions industry were not effective in regulating exchange-traded products or CFDs. Forex scams and bad brokers were doing real damage to the industry and getting away with it.

The forex industry in South Africa had a bad reputation because so many investors fell victim to unscrupulous brokers. It was extremely difficult for honest, legitimate forex brokers to operate in the industry because they were painted with the same tar brush.

The FSCA is following due process to introduce a new regime aimed at cleaning up the forex and CFD industry. The proposed regime will provide the FSCA with a real chance to stamp out scams and illegal bonus promotions in the South African forex market and create an environment where traders and investors are treated fairly.

 

Is forex trading legal in South Africa?

 

Forex trading is legal in South Africa, as long as traders and brokers abide by the financial laws of the country. These laws specifically prevent money laundering and ensure all income earned from forex trading is declared in income tax returns.

The forex industry in South Africa is unregulated in the sense that it is not compulsory to be authorised by a financial regulatory body. However, FSCA exists to provide an extra layer of protection to traders and investors even though it is not a legal requirement to trade through a FSCA-regulated broker.

 

Can forex brokers in South Africa be trusted?

 

There are several forex brokers in South Africa that have a proven track record for honesty, integrity and fair trading. You can find these companies listed on websites like Forex Trading Africa that compare forex brokers in South Africa and conduct extensive broker reviews.

Forex brokers who are not registered members with the FSCA or an overseas regulatory authority are considered highly dubious. Unregulated brokers can offer unlimited leverage and market promotional bonuses that make them look very appealing to local traders without consequences. If what they are promising is a scam, traders and investors have no safeguards and no recourse.

You’ll find all the reputable forex brokers in South Africa are members of the FSCA or a regulatory authority in another country. This provides peace of mind that the forex broker understands the rules and regulations governing the forex industry and is likely to abide by the Code of Conduct of the regulatory authority.

Any forex broker you consider trading through should be transparent with regards to whether the company is a registered member of the FSCA or an overseas regulatory authority. If they are not, this raises a red flag over the company’s standing in the forex industry.

 

Regulation requirements of forex brokers in South Africa

 

The FSCA requires a forex broker to a have a local presence in South Africa. This involves having a local office and at least one director residing in South Africa.

The following is also required by the FSCA of regulated forex brokers:

  • professional indemnity insurance
  • client funds are segregated from their own operating funds
  • audited on a regular basis to ensure client funds are not misused
  • have an ODP license

 

What is an ODP license?

 

The Over-the-counter Derivative Provider (ODP) license is part of a new regulatory regime for South African forex brokers that the FSCA is in the process of evaluating and implementing.

To obtain an ODP license, forex brokers will be required to conduct due diligence on their clients before they can trade high-risk products such as forex.

The new licensing regime will also introduce stricter capital adequacy requirements as well as require access to all transaction details including instrument type, underlying asset, price, leverage used and the investors name and country of residence.

The aim of the ODP license is to ensure forex brokers treat all clients fairly and do not engage in unprincipled or illegal activity.

Currently, the FSCA requires all its members have a physical presence in the country and to provide continuous access to all transaction data to the FSCA. This will be enforced more keenly through the new ODP licensing.

 

How can you protect yourself from being scammed by a dodgy forex broker?

 

Forex trading is the largest and most liquid market in the world. Approximately US$6 trillion is traded daily on the global market. With this amount of money being traded online every day of the week, the forex market is wide open to scam artists.

Forex brokers have been accused of running everything from pyramid schemes to Ponzi schemes. Believe us when we say, there have been many variants of these schemes that warrant the bad reputation. However, these crimes are being stamped out through more stringent regulations, both locally and overseas.

 

Tip #1

It’s strongly recommended that you only use a forex broker that is regulated by the FSCA or can prove the company is regulated by an authority in another country. The regulatory credentials should be clearly stated on its website and the company needs to be totally transparent on their membership status.

Tip #2

The best way to avoid falling victim of a forex broker scam is to trade over a secured platform which only regulated brokers can provide their clients.

MetaTrader is the most popular trading platform in the world. There are two versions: MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Nine out of 10 forex brokers offer MT4 because it is easy to use, reliable and fully functional.

Tip #3

Check the forex broker’s membership status with the FSCA. You can do this by reading broker reviews online or through the FSCA itself.

Tip #4

Check whether there has been any legal action taken against the company. You’ll pick this up online on sites that publish complaints and bad reviews on companies.

Tip #5

Check if there is a physical address for a local office for the broker. The FSCA requires a registered member to have a local presence which means having a permanent office in the country and at least one director of the company residing in South Africa.

Tip #6

Educate yourself on the forex trading market so you maintain full control of your money. Find out what forex scams are in the market, how legitimate forex trading works and which forex brokers are honest and reliable. The more you know about forex trading, the less likely the chances are of falling victim to a scam.

Tip #7

Don’t believe false promises of quick profits and no financial risks. The forex market is highly leverage and inherently high risk. More people lose money on the forex market than they make profits. If something sounds too good to be true, the chances are it’s a scam.

 

FTA DISCLAIMER

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. Forex trading is a highly leverage product which increases the risk associated with forex trading. Carefully consider your appetite for risk and trade forex with due care and caution.

 

FSCA Regulated Non-Bank Brokers : Derivative and forex instruments

 

Trading as FSP Name FSP No Status
Alpari International Exinity Limited 50320 Authorised
AvaTrade Ava Capital Markets (Pty) Ltd 45984 Authorised
DMA SCM DMA (Pty) Ltd 40983 Authorised
Easy Equities First World Trade (Pty) Ltd 22588 Authorised
ExCentral OM Bridge SA 48296 Authorised
Exness Vlerizo (Pty) Ltd 51024 Authorised
FXCM FXCM SA (Pty) Ltd 46534 Authorised
FXTM ForexTime Limited 46614 Authorised
GT247 Purple Group 46315 Authorised
HotForex HF Markets Limited 46632 Authorised
IG Markets IG Markets SA Limited 41393 Authorised
Infinox Infinox Capital (Pty) Ltd 50506 Authorised
Markets.com TradeTech Markets SA (Pty) Ltd 46860 Authorised
Pepperstone Pepperstone Group Limited 49497 Processing
Plus500 Plus500 AU (Pty) Ltd 47546 Authorised
QuickTrade QuickTrade (Pty) Ltd 45262 Authorised
Scope Markets Scope Markets SA (Pty) Ltd 47025 Authorised
ThinkMarkets TF Global Markets SA (Pty) Ltd 49835 Authorised
Tickmill Tickmill (Oracle) SA Limited 49464 Authorised
Trade Nation Trade Nation Financial (Pty) Ltd 49846 Authorised
Velocity Trade Velocity Trade Financial Services (Pty) Ltd 43295 Authorised

 

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