Choosing the best online CFD brokers in South Africa regulated by the Financial Services Board (FSB) can be a tricky task because of the scams happening in the marketplace. Even if you decide to choose a licensed broker, you need to have a clear understanding of their terms and conditions in order to ensure that you are working with the right one. Choosing the right broker is one of the most important decisions that you will have to make if you have decided to trade CFDs.
Many forex brokers are flocking to South Africa because of the fact that the country’s economy is growing rapidly and there is a higher demand for professional financial services. Further, many forex brokers are striving to expand their operations to other countries around the world. Moreover, South Africa, which is the only country from the African continent to become a member in the G2, boasts of well-developed financial, legal, and communications systems.
The Financial Services Board (FSB) is responsible for overseeing the operations of the non-banking financial services companies operating in the country. This includes collective investment schemes (unit trusts and stock market) and financial brokers and advisors, among others. The Agency is also in charge of issuing licenses to financial service providers that want to operate in the country. In addition, the Agency is responsible for making sure that the regulated financial services providers comply with the relevant legislation and meet the capital adequacy requirements so as to promote their financial soundness and protect the investors.
Related : Top FSB South Africa Forex Brokers
The FSB is bestowed with enforcement powers for dealing with breaches with the help of the enforcement committee. Additionally, the FSB has a customer complaints service – the Office of the Ombud for Financial Services Providers. As forex trading is allowed in South Africa, the FSB regulates the financial services providers through stringent implementation of the relevant legislation and the investment limit is just R5 million, South Africa is turning out to be an attractive and promising destination for forex brokers.
FSB Forex Brokers and Customer Complaints
The customer complaints service was implemented by the FSB in the year 2002 for resolving disputes between financial services providers and their customers. Referred to as the Ombud for Financial Services Providers, the service offers an informal, quick, inexpensive and fair way of resolving the disputes. The free service is accessible to all South African consumers subject to certain restrictions. These are that the infraction should have occurred after the 30th September 2004 and the claim should not be more than R800,000.
The complaints that are listed below can be taken up by the Ombud:
Failure on the financial service provider to comply with the provisions of the FAIS Act
If the complainant has suffered or is likely to incur financial damage
If the customer preferring the complaint suffers unfair treatment
If a financial service provider is either negligent or wilfully caused a damage or is likely cause the same
As per FSB regulations, the financial service provider can resolve the issue in six weeks. If you are unable to come to a mutually agreeable resolution, then you can bring the matter to the Ombud’s attention, but within six months.
Having discussed a little bit about the regulatory environment in South Africa, here are some of the best online CFD brokers operating in South Africa that are regulated by the FSB:
#1: AvaTrade
AvaTrade, a pioneer in the field of online forex trading from 2006 onwards, was created for the purpose of providing great online trading experience to retail traders. The trusted forex broker is regulated in five jurisdictions. 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. AvaTrade offers even Bitcoin CFDs.
Broker Type – Market Maker
Regulation – Australian Securities and Investments Commission (ASIC); Central Bank of Ireland; Financial Futures Association, Japan; Financial Services Board (FSB), South Africa (License number – 45984) and Israel Securities Authority (ISA)
Platforms – MetaTrader 4, AvaTrader
Minimum Deposit – $100
Deposit Options – Bank Wire, PayPal, WebMoney, Skrill, Credit Card, Neteller, Prepaid Master Card, etc.
Maximum Leverage – 400
Minimum Lot Size – 0.05
Spreads – Fixed
Lowest Spreads for EUR/USD – 3
#2: Plus500
Plus500 is The online broker specializes in providing trading opportunities in forex, indexes, stocks and commodities. In South Africa, Plus500 is registered with FSB and, therefore, complies with the agency’s stipulations. Plus500 offers CFDs in Commodities, Stock, Indexes, Gold, and Oil.
Operational Since – 2008
Regulation – FSB, FCA UK, CySEC, ASIC
Minimum Deposit – $100
Spread – Fixed
Leverage – Up to 50:1
Deposit Options – Bank Wire, PayPal, Credit Card, Skrill, etc.
Trading Platforms – Windows Trader, WebTrader
#3: XM
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. On XM’s platform, you can trade CFDs on Indices, Commodities, Stocks, Metals and Energies. XM has applied for FSB license (Application #47346). XM is considered to be a leader as far as trade execution is concerned. The broker follows No Requotes/Rejection Policy and executes 99.35 percent of the trades in less than one second.
Broker Type – DMA/STP, MM
Regulatiion – Cyprus Securities and Exchange Commission (CySEC), Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC)
Minimum Deposit – $5
Deposit Options – Bank Wire, Neteller, Skrill, WebMoney, Credit Card, WesternUnion, MoneyGram, SOFORT, UnionPay (China), etc.
Maximum Leverage – 888:1
Minimum Lot Size – 0.01
Spreads – Variable
Lowest Spreads for EUR/USD – more than 1
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