Introduction
The Republic of South Africa has come a long way since Apartheid was abandoned nearly three decades ago. Foreign exchange trading in South Africa is now legal, and current estimates are that 190,000 citizens currently trade forex. Account balances average just under $1,000, indicating a viable market that several brokers have targeted for future expansion.
The forex market is booming in South Africa. The total volume for forex transactions of all kinds in a single day has increased from $14 to $21 billion, per data from the Bank for International Settlements for the three years from 2016 through 2019. Retail trading of spot and CFDs daily now exceeds $2 billion.
One of the reasons for this positive growth and outlook is the local regulator, the Financial Sector Conduct Authority (FSCA). This agency was formed in 1991 as the Financial Services Board (FSB) but changed its name in 2018. The change in status was due to government reforms, coinciding with making the agency independent.
The FSCA has oversight responsibility for the forex industry and regulates all forex brokers who have a physical presence in the country. It is considered a Tier 2 regulator, beneath the likes of the FCA in the UK, CFTC in the US, CySEC in the EU, and ASIC in Australia, patterning its organization and mission as a Tier 1 model.
The Best FSCA Regulated Brokers:
The FSCA awards licenses to both domestic and international forex brokers. If your choice is an international one, it is wise that your candidate also complies with a major regulator in another jurisdiction, like the FCA in the UK, for example. A table of the “Top 5” FSCA regulated forex brokers follows, with pertinent details afterwards:
| Broker | Features | Min Deposit | EURUSD Spread | ||
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 Your capital is at risk
US Clients: No Regulated : Yes
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– Regulated by FCA, FSCA, CMA and FSC |
$200 | ECN 0.1, Standard 1.6 | ||
 Your capital is at risk
US Clients: No Regulated : Yes
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– 40% New Member Bonus
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$100 | Fixed |
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Europe* CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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 * 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
US Clients: No Regulated : Yes
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100GBP/AUD/EUR/USD | variable |
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* 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
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- AvaTrade: AvaTrade is a global broker with offices in South Africa, and the FSCA has licensed it since 2015. It continually appears at the top of rating lists as one of the best forex brokers in the country, primarily for its mobile trading app. This broker provides very tight spreads, leverage up to 400:1, and MetaTrader trading platforms. Its offering includes 55 currency pairs and the ability to have a local ZAR account.
- Tickmill: This broker also receives high overall ratings from the reviewers in the forex industry. It is strictly a MetaTrader 4 shop, delivering its trading platform services via a PC download, Webtrader access on the Internet, or from mobile apps for Android and iOS devices. It also competes with low fees and very competitive spreads. The focus is on 62 currency pairs and CFDs for indices, metals, and bonds.
- Exness: Exness is another recent entry to the South Africa network, receiving its licence in late 2020. It is also a MetaTrader shop, but it offers trading in over 100 currency pairs, with a few cryptos and metals thrown in for good measure. Spreads are tight, even on the Standard account, and users give high marks for the trading conditions experienced.
- HotForex: Professionals and beginners are attracted to this broker for varying reasons. Its FSCA licence was issued in 2016, and the broker prides itself on its high level of market analysis and research, along with its competitive fee and spread schedule. It is another MT4/MT5 trading platform environment for 49 currency pairs and CFDs on stocks, commodities and cryptos.
- The IG Group: IG is a perennial leader and significant player in the global forex industry. It ranks as the largest forex broker by revenue alone. Its presence on the London Stock Exchange ensures that stability, safety, and transparency are never in doubt. Its commitment to a high standard of market analysis, educational materials, and tight spreads seals the deal.
Why trade with an FSCA Regulated broker:
Forex trading is a risky endeavour, requiring patience, preparation, and practice to succeed. You must have a forex broker as your financial partner to access the forex market; however, one of the largest risks in this trading activity is to deal with a foreign broker located in a slim to nonregulatory environment. All FSCA licensed brokers must have a physical location in South Africa, primarily to ensure quick dispute resolutions and provide accountability for the effectiveness of their operations and auditable compliance with regulations.
There are other benefits. Brokers must segregate client funds in a highly rated bank, report transaction details to an authorised trade aggregation organization, and validate that new customers understand the risks involved and have the necessary capital to proceed. In case of insolvency of a broker, an industry compensation scheme will step in for clients of regulated brokers. Lastly, the FSCA continually monitors the industry for scams and issues warnings of bad actors.
How to check if a broker is an FSCA regulated forex broker:
All FSCA forex brokers must prominently display their Financial Services Provider (FSP) number on their respective websites. To verify that the FSP is valid and not a shared data element, or worse yet, an outright fraud, it is wise to use the FSCA’s dedicated search engine for validation.
Concluding Remarks
If you are a citizen of South Africa and wish to join the burgeoning forex trader community within your locale, you are in luck. The FSCA is your friend. Select an FSCA regulated forex broker to be your business partner and enjoy the benefits of such a decision. Be wary of solicitations from foreign-based and unregulated brokers. The FSCA will protect you, but only if you deal with an FSCA licensed broker.