HERE IS ALL YOU SHOULD KNOW ABOUT FSCA REGULATED BROKERS
Best FSCA Regulated Forex Brokers
South Africa boasts of the most robust financial market in Africa, having evolved from a simple one-asset market into a market where various asset classes are traded. This position has allowed the forex market in South Africa to thrive.
Part of what has made the South African forex market excel is the regulation of that market. South Africa has the best and most advanced regulatory setup of any forex market in Africa. Kenya is the only African country where forex is regulated, and it is at best a fledgling setup, having just come into effect a few months before the COVID-19 pandemic. The South African financial market is regulated by the Financial Sector Conduct Authority (FSCA). This piece aims to establish who the best FSCA regulated forex brokers in South Africa are, and what benefits you can derive from them.
The FSCA and FX Brokers
The FSCA replaced the now-defunct Financial Services Board (FSB) in 2018, being one of two new agencies that came out of the split of the FSB. The FSCA regulates the South African forex market. However, it goes far beyond this.
The FSCA conducts several activities as part of its regulatory and oversight functions. One of the hallmarks of the FSCA’s work is the Financial Services Tribunal, which was set up to enable members of the trading public to get access to a pathway of redress if they feel they have been wronged by an FSCA-regulated forex broker. But the Tribunal is not the last bus stop. There is also an Appeal Board, where financial market operators or the trading public can challenge the Tribunal’s decision.
But does the FSCA allow complaints to develop and then proceed to its Tribunal or Appeal Board? No, because the FSCA holds providers of financial services (including forex brokerage) to very high standards of professionalism in the course of their work. There are reporting standards that must be adhered to, enabling the FSCA to identify problematic operations within its regulated brokerages. Investor education and provision of early-warning signals of scams are part of the functions of the FSCA. The FSCA believes that an informed trader or investor is less likely to fall prey to scams or to have issues that will eventually get to the point of intervention from the Tribunal or the Appeals Board.
FSCA Regulated Forex Brokers & CFD Platforms
Exness, an FSCA regulated broker, offers to SA traders very competitive spreads that start on the standard accounts from 0.3 pips and on the pro accounts even lower. The company features two popular trading platforms – MT4 and MT5 and a trading account either in USD or ZAR. In the forex asset category, you can find 107 currency pairs including 7 currency pairs with ZAR.
FP Markets launched its brokerage services in 2005 and is currently under the regulation of the FSCA in South Africa. With this broker, clients can trade over 10,000 different instruments including over 70 currency pairs. The spreads for trading on this broker site go as low as 0.0 pips on the raw account and a fairly low commission of *3$ USD per lot per side is paid. Finally, South African clients have a 1:500 maximum leverage available and access to WebTrader, MetaTrader 4 and 5, cTrader, and Iress.
Plus500 is an FSCA licensed broker that supports speculation on over 2 000 trading instruments. The company features an in-house built trading platform, a trading account in ZAR and tight spreads starting on major currency pairs from 0.6 pips. When it comes to forex trading, you can trade 71 forex pairs (including EUR/ZAR, USD/ZAR and GBP/ZAR) with up to 1:30 leverage.
XTB offers clients access to 48 different currency pairs with some of the lowest spreads in the market. The spreads on this broker site can go as low as 0.5 pips for major currency pairs. Clients can also invest in other markets. Specifically, they can trade CFDs on forex, indices, commodities, equities, cryptocurrencies, and ETFs. These assets are tradeable on the xTrader 5 platform that is built by XTB itself. South African traders will be happy to know that they will be investing with a broker that is authorised and regulated by the FSCA.
AvaTrade, a broker regulated by the FSCA, provides access to popular forex trading platforms – MT4 and MT5. The company supports trading with up to 1:400 leverage. When it comes to fees, AvaTrade spreads on major currency pairs can be as low as 0.9 pips. The broker offers access to 55 forex pairs (including USD/ZAR and EUR/ZAR) and also has a local office in Johannesburg.
What Do FSCA-Regulated Forex Brokers Bring to Your Table?
The principal benefit that trading with a regulated broker brings is investor protection. The FX market is a global enterprise worth nearly 6 trillion dollars. Wherever there is such a large pool of funds, you are sure to get a lot of scammers pouring into such spaces, looking for gullible traders to devour.
This is where the regulators come into the picture. Regulation of a financial market ensures that the operators in this market are known and properly registered. The searchlight is always beaming on the operators to ensure they are playing by the rules and not doing things that take advantage of their clients. Regulation ensures that there is a level playing field for everyone. Regulation ensures that the scammers are kept away. Some regulators like the FSCA also provide early warning signs to their clients, so that traders can be informed enough to identify and avoid all forex market scams completely.
So here is what you get with the best FSCA-regulated forex brokers in South Africa:
FAQ – FSCA Regulated Forex Brokers
FSCA runs a system that instantly informs you whether a broker is indeed FSCA-regulated or not. To verify if a broker you selected is regulated, head to the internal search engine on the FSCA website, where you can can type in the name of a forex broker and find out their status.
This is done by clicking on the “Financial Services Providers Search” icon and typing the broker’s name into the text box on the next page. Alternatively, there is a call centre that can assist clients by phone with this information.
Many people ignore the exotic pairs without realizing that these pairs have a solid potential for profit. Their range of movements is very large and they have correlations that can easily be tracked and traced. Those who are not following them up close might want to start with studying the market otherwise could end up with heavy losses.
Do you love to trade interest rate potentials, especially now that the interest rates in developed countries are at record lows? Trading the USD/ZAR is one of the best ways to take advantage of the interest rate differentials between the developed world and the emerging markets. The USD/ZAR is easily accessible to those who use FSCA-regulated forex brokers.
Now that you know the benefits you can get by using FSCA-regulated forex brokers in South Africa, it is up to you if you decide to trade with a forex broker that is regulated by this regulatory body but we highly recommend on doing so. Today, the forex market in South Africa is so attractive to forex brokers that it is not a big issue to find a trustworthy company with solid trading conditions that is also licensed by the local financial regulator FSCA.