Many forex brokers have started offering services in South Africa as the country’s economy is experiencing rapid growth. Further, there is an increased demand for financial services in South Africa. Another reason as to why forex brokers setting up offices in this country is probably the mounting regulatory pressure on them in Europe.
South Africa is a huge market and the potential for growth is very high. As it is the most advanced country in the African continent in terms of economic growth, it is even part of the G20 countries. The legal, financial and communications sectors of the country are well-developed and South Africa’s JSE Limited is by far the largest stock exchange in the African continent and ranks among the top 20 exchanges in the world.
In South Africa, the operations of the non-banking financial services sector, including collective investment schemes (stock market and unit trusts) and financial brokers and advisors are overseen by the Financial Services Board (FSB). It is this agency that processes applications and issues licenses to companies that want to operate as financial services providers in the country. The agency also ensures that the regulated companies are complying with the relevant legislations and capital adequacy requirements in order to promote financial soundness among the service providers and protect the investors.
Trusted South Africa Forex Brokers Regulated By FSB
Min Deposit: $5
Spread: From 0 Pips
Regulation: ASIC, CySEC, FCA (UK), IFSC Belize
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Min Deposit: €100
Spread: The Spread can be as low as 0.01%” (0.01% = spread for EUR/USD)
Regulation: ASIC, CySEC, FCA (UK)
Moreover, the FSB is bestowed with the powers to enforce compliance and deal with breaches via an enforcement committee. The company also runs a customer complaints department, the Office of the Ombud for Financial Services Providers. As forex trading is allowed in the country and is well-regulated by the FSB with relatively less restrictions (capital requirement is R5 million), South Africa has become a promising destination as far as financial services providers are concerned.
Tips Choosing Best Forex Brokers in South Africa
Across the globe, there is a strong tendency of introducing stringent requirements for Forex brokers and traders. South Africa isn’t an exception here. Owing to the massive 2007 crises, plenty of Forex brokers went bankrupt and traders lost their money as the price was manipulated, inside trading was rampant, most people resorted to fraudulent trading and so on. However, such situations don’t necessarily define the norm, and you can always avoid them by choosing the right broker.
In South Africa, both trading in Forex, as well as the usual market regulation, is at a nascent stage. There is, however, a regulator known as the FSB. The primary task of the Financial Services Board is to ensure that every company offering financial services in the nation is fully regulated. The institution is also entitled to the duty of punishing the brokers who do not comply with their rules. This is why it is especially important to choose the right Forex broker in South Africa. Once you choose the right brokerage platform, you will soon be able to make the most from your trades.
- Simple and Easy To Operate
One of the best things about Forex Trading in South Africa is that you can end up trading your preferred Forex pair regardless of your location and from the full comfort of your home. So, you can be sitting on your couch, sipping your favorite drink all while placing your trade. What’s more, you’ll also have the full flexibility of trading on your preferred days.
However, in order to make the most of your trade, it is also important to choose the right platform for trading. Since this is going to be your primary tool of work, you can always open free accounts with leading brokers in a bid to assess their trading terminals. As you do this, you will get to know if you are comfortable and have the required features.
A good trading broker will be simple to operate, easily navigable, and feature plenty of charts. Ideally, you should able to open multiple windows on a single chart station. You will also get to pick your preferred time frame ranging from a single minute to an entire month.
While exploring the available platforms do ensure that they come with your preferred indicators so that you’re able to analyze the charts and place the notes as and when needed. The right platform will also allow you to backtest your strategies as and when needed.
Since these features are especially important and cannot be compromised on, do ensure that the South African trading brokers have them. Also, if you are looking to trade in a browser without having to download any software, most brokers will also offer that facility. But even then, it is important to check if they have the required tools for implementing your trades.
- Check The Available Commissions And Spreads
Unlike stock trading where you’re required to pay a certain amount for every trade, most brokers won’t charge you any fees. But if they don’t charge fees, how do they even make money? Well, they do this by offering you a currency pair along with spreads. So, while choosing South Africa Forex brokers, make sure they offer decent spreads to you. Spread here is the difference between the purchasing and the selling price. So, EUR/USD might trade at 1.1706 (purchasing price) and 1.1708 (selling price). Upon opening a trading account, you will have two different pips of the deficit. This broker’s charge for opening the trading account for you. Spreads are usually fixed and variable. Alternatively, they are also fixed with an added fixed fee. The fixed spreads in almost every case will be 1 to 5 on the primary pairs that come with US dollar and they cross 4 to 15. Eventually, the combination will result in non-dollar pairs.
Variable spreads are relatively lower with 0.2 for the majors and 2 to 5 pips for the crosses. If the current market isn’t altered by sudden fundamental news, you’d end up trading in these low spreads. Your spreads will automatically increase when there’s a sudden positive economic or financial news.
- Account Types
In order to choose the right Forex broker, you will also have to consider the types of account they offer.
Micro: Yes, in this digital age you can start trading in Forex with barely $50 with a micro account. There are certain other companies that even let you start with $1. However, they do not come with lot size positions and have positions for unit size instead. Usually, you are likely to find plenty of brokers with a minimum deposit requirement of $100 or $200.
Mini: If you have more than a thousand US dollars, you can choose the mini accounts and trade in mini lots. If, however, you’re looking for bigger trade sizes as in the 100k, you will need at least 10k or higher capital for trading.
VIP: You can always go up the ranks and choose VIP accounts where you can trade in massive positions. It is, however, important to note that trading is risky and you should therefore not risk what you won’t be able to afford.
- Customer Support
Since trading is a global business, you’ll find multiple foreign brokers extending their services in South Africa. However, in order to ensure their feasibility check if they have customer support in your preferred language. The brokers who really care won’t hesitate to go the extra mile for making you their valued client. Additionally, they will also offer speedy requests, complaint resolving, and question answering services.
- Added Services
In addition to these featured services, the right South Africa Forex brokers will also offer ample educational resources, tutorials, and videos to help out first-time Forex brokers. So, while choosing a Forex broking company in South Africa, do keep this feature in mind.
Well, now that you are fully aware of the factors you should consider while choosing a Forex broker in South Africa, what are you waiting for? Use our guidelines for choosing the right experts, who in turn will ensure that you get to make the most from your trades.
Here is a list of FSB regulated forex brokers:
XM.com, a trade name of Trading Point Holdings Ltd, is owned as well as operated by Trading Point of Financial Instruments Ltd, which is regulated by CySEC. It is also European Union-registered forex broker. XM has its headquarters in Limassol, Cyprus.
Operational Since: 2009
FSB License Number: XM.com has applied for license
Types of Accounts: Demo, Micro, Standard and XM Zero
Minimum Deposit: $5
Spread: Starts from 0
Leverage: Up to 888:1
Deposit Options: Visa/Master/Maestro/UnionPay Cards, Neteller, Skrill, Webmoney, Sofort, iDeal, paysafe, Qiwi, CashU, Local Bank Transfer and Bank Wire Transfer
Trading Platforms: MT4 for PC and Mac; MT4 Multiterminal, MT4 WebTrader; MT4 for Android and iPhone; MT4 for Android Tablet and iPad
Bonus: Up to $5,000
AvaTrade, a pioneer in the field of online forex trading from 2006 onwards, was created for the purpose of providing a great online trading experience to retail traders. Within a short time, AvaTrade had more than 20,000 registered customers executing over 2,000,000 trades in a month around the globe. The total value of trades surpasses $60 billion in a month.
Operational Since: 2006
FSB License Number: 45984
Types of Accounts: Demo and Real
Minimum Deposit: $100
Spread: Fixed; Starts from 3
Leverage: Up to 400:1
Deposit Options: Credit/Debit Card, Paypal, Webmoney, Skrill, Neteller and Bankwire (minimum $500)
Trading Platforms: MT4, AvaTrader, MT4 Floating Spreads, AVAOptions, Automated Trading, Mac Trading, Web Trading, Mobile Trading
Bonus: Up to $5,000
#3: CM Trading
CM Trading is the brand name of the Seychelles based company Global Capital Markets Trading Ltd. The online broker specializes in providing trading opportunities in forex, indexes and commodities. In South Africa, CM Trading is registered with FSB and, therefore, complies with the agency’s stipulations.
Operational Since: 2012
FSB License Number: 38782
Types of Accounts: Demo, Mini, Standard, Executive and Gold
Minimum Deposit: $250
Spread: Depends on account type; tighter for Executive and competitive for Gold
Leverage: Up to 400:1
Deposit Options: Wire or Bank Transfer, Debit or Credit Card,
CashU, Neteller, Fasapay
Trading Platforms: MetaTrader 4, Mobile Trader, Tablet Trader, WebTrader, CM Trading CopyKat, Social Mobile App
Bonus: Up to $1,000
easyMarkets, a market maker type forex broker, was initially established under the trade name “easy-forex” in 2003. easyMarkets offers 136 spot currency pairs, 48 FX forwards and 57 currencies crossed with metals for trading. easyMarkets is the trading name of Easy Forex Trading Limited and the company’s website is operated by Easy Forex Trading Limited
Operational Since: 2003
Types of Accounts: Demo and Standard
Minimum Deposit: $25
Leverage: Up to 400:1
Deposit Options: Credit Card, Webmoney, Wire Transfer, Neteller
Trading Platforms: easyMarkets, easyMarkets MT4
Bonus: Up to $2,000
Markets.com is operated by Safecap Investments Limited, which is a financial services company that is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC). Safecap is a subsidiary company of Playtech PLC, which is traded on the Main Market in the London Stock Exchange and is a FTSE 250 index constituent. Safecap has also obtained the license from the Financial Services Board in order to operate in South Africa. Markets.com received the best customer service award at the London Investor Show Forex in 2012, among others over the last few years.
Operational Since: 2010
FSB License Number: 43906
Types of Accounts: Demo and Standard
Minimum Deposit: $100
Leverage: Up to 200:1
Deposit Options: Credit Card, Webmoney, International Bank Transfer, Wire Transfer
Trading Platforms: Markets WebTrader, Markets MT4, mobile platforms
Bonus: $25 on registration
Of course, the best forex brokers in South Africa will be complying with the stipulations put in place by FSB. However, there are many forex brokers in the country whose operations are not overseen by the agency. We recommend that you should work only with forex brokers that are registered with the FSB if your goal is to succeed as a forex trader in South Africa.
Another thing you need to decide before you sign up with and South African forex trading company is whether you want to trade the domestic currency or standard currency pairs like EUR/USD. Once you have decided this aspect, understand the spreads that the brokers are offering. You should ensure that make sure you are getting the best quotes available. Additionally, you should also ensure that the forex broker you are planning to work with will actually allow you to deposit funds in Rand, if required. Finally, dig a little deeper and find out that the brokers are offering a demo account and platforms that are capable of catering to your specific needs.