South Africa is a growing forex trading market. According to some estimates, there are more than 200,000 traders in the country, and on average they keep about 1000 dollars with their brokers. There is no large market for Fox on the continent, and under the policies of the FSCA, the regulatory body in the country, brokers from all over the world offer their services to South African clients.
If you are one of these customers, choosing a broker can be a bit difficult. Not only will there be many licensed firms competing for your attention, but you will also be able to avoid many scammers. It is important to stick with licensed brokers – and in this article we have listed the top 5 most regulated firms in the country. But before we mention them, a quick introduction to the country’s regulatory framework is as follows:
The regulatory system in South Africa
Markets in the country are regulated by a regulatory body called the Financial Sector Conduct Authority (FSCA). This regulator is not particularly strict compared to its counterparts in Europe, the United Kingdom and the United States. It does not set any formal requirements for a broker, the company FSCA operates online. This registry still allows you to know who to argue with when a regulated broker commits fraud – but there are many protections that are not available to clients of brokers only licensed by the regulator.
For example, brokers in the regions we mentioned are required to spend a certain minimum capital to be allowed to work on the markets – this amount is different between the courts, the EU and the UK require a liquid fund of at least €730,000. And states want much more – $20m, to license brokers. The purpose of each of the higher requirements is the same. Their aim is to ensure that brokers have the necessary liquidity to meet their costs effectively and remain in competitive markets. Unlicensed brokers in South Africa are not bound by the same regulations as these other regulators – there is no guarantee that these companies have the stability to offer their services to you!
Of course, a lax regulatory approach has some advantages over the strict regimes of other governing bodies. For example, the maximum leverage allowed in the EU and UK for FX majors is up to 1:30. In the States, this ratio is up to 1:50 per property unit. It makes sense to limit benefits as it can be risky for the retail customer. At the same time, if you know how to handle the increased risk, you can trade with a broker in South Africa, which does not have to limit the available capacity. The same can be said for bonuses – they are prohibited in most jurisdictions, but brokers in South Africa are free to give them to clients.
Overall, there are certainly some pluses and minuses to the lax rule. Fortunately for clients from South Africa, the FSCA allows them to trade with brokers licensed in other jurisdictions. This allows the world’s leading brokers to offer their services on the market. These companies are already licensed, sometimes in different jurisdictions, making them safe from default and reducing the chances of fraud to zero. Here are the five most licensed brokers in South Africa, ordered by the number of licenses they have received:
The 5 most regulated brokers in the country
FXTM
The first broker we want to present is FXTM. The company has licenses in four jurisdictions – the European Union, the UK, Mauritius and most importantly, South Africa. The domestic licensing of FXTM means that the broker has its finger on the pulse of the financial market. In terms of trading conditions, the company is very good – a minimum deposit of $50 is required to open an account. Said account can use leverage up to 1:2000 and receive several attractive bonuses. For example, a client who opens an FXTM account can win attractive prizes for a series of Forex trading contests. The broker offers Metatrader 4 and 5 platforms which are some of the best trading software on the market today. Overall, your money is in good shape with FXTM!
F.B.S
The second broker on our list is FBS – once again, the broker holds four licenses. The company has an EU license due to its office in Cyprus. He is also licensed by Australia’s ASIC, as well as the Offshore Regulator – IFSC Belize. Finally, the company was re-licensed by FSCA. The broker offers higher leverage than FXTM – up to 1:3000. The minimum deposit with it is as low as 1 dollar, which is very attractive for customers who want to keep their feet in the water and trade without any risk. Once again, the broker offers Metatrader platforms as well as a trading app for Android devices called FBS Trader.
FXCM
FXCM ranks third in our ranking with four licenses. The company is regulated by regulators in the UK, Cyprus, Australia and South Africa. Customers can open an account with a low cost of $50 and leverage up to 1:400. The broker offers access to Metatrader 4 as well as an incredibly comprehensive web-based platform. Reverse marketing is also available on the web platform.
HFM
Fourthly, HFM is a licensed broker in five states. These are the European Union, the United Kingdom, the United Arab Emirates, South Africa and Kenya. The company has a lot to offer its customers – account access is available for just ZAR70 – around $5, especially for customers from South Africa. You can also use attractive leverage up to 1:1000. This advantage can be used on both Metatrader platforms. The broker provides access to reverse trading on its own unique platform. Customers of the company can avail many attractive bonuses like 100% deposit bonus.
Saxo Bank
Finally, Saxo Bank is the most licensed broker operating in the South African market. The company has licenses in Denmark, France, Japan, UAE, UK, Turkey, Hong Kong, Singapore, Switzerland, Australia and South Africa. This amazing license amount is because the company is a real bank and acts as a forex broker. This means that Saxo Bank is slightly different from other brokers on the list and may not be the best choice for every trader. The company has a minimum deposit of $10,000. In addition, it is a fundamentally different type of broker from other companies – it is a market maker, while other companies provide STP and ECN services. However, if you are after the most licensed broker in the country, this is Saxo Bank!
