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Forex brokers and regulatory framework in South Africa

Forex brokers and regulatory framework in South Africa

South Africa is undoubtedly the most developed nation in the African region. It is a G20 member country, and its banking operations are managed by the Reserve Bank, which issues the rand or ZAR local currency.

It is blessed with many natural resources, such as precious metals, but it heavily depends on trade with Europe, America, and Asia.


South Africa’s open economy has encouraged currency trading. With more than $20 billion in Forex trading volume, the country represents Africa’s largest Forex market. Namibia is the second-largest country in Africa, with over $20 billion of Forex volumes traded in 2018. Namibia has only 10% of South African Forex volume.

The South African rand, the national currency, is ranked 19th worldwide in terms of trading.

Many forex brokers in Europe are finding it difficult to target traders, so they are looking abroad. South Africa is becoming increasingly attractive because of its healthy economy and low operating expenses.

South African Forex Rules

Local traders are very fond of Forex trading. Forex trading is regulated by the local regulatory authority, FSCA (Financial Services Conduct Authority), which ensures that both brokers and traders are not engaging in illegal activity.


Non-African brokers must be FSCA-licensed to market their trading activities in South Africa. In addition, the brokers have to satisfy the minimum operating capital requirements demanded by the regulatory framework. The brokers should also have offices in South Africa.


In addition, brokerage companies offering assets like Contracts for Difference (CFDs) have to make sure that the clients have the necessary trading profiles for handling the volatility that comes with CFDs. The Johannesburg Stock Market also allows local traders to access derivative securities. Before allowing such volatile products to be traded, traders must carefully evaluate their clients. South African investors can also trade derivatives on foreign currency on the Johannesburg Stock Exchange.


A local license will make account funding much easier for traders. Foreign brokerage firms can be more difficult to deal with because you need to deal with foreign banks, and therefore currency conversions.

However, there are some exceptions for Forex brokers that particularly target the South African sector, such as XM, HotForex, FBS, and others. Many of them might support accounts in local ZAR currency and will offer various promotional campaigns for SA traders. One of the examples is XM no deposit bonus for South African clients, ZAR account availability, and even ZAR exotic currency pairs available for trade. 


While a debit or credit card is convenient and easy to use, regular wire transfers are more secure and allow you to send more money. This is especially true if the broker’s location is overseas. You should also choose brokerage firms that allow you to open a ZAR account, rather than one in USD or euros. This is done to avoid paying unnecessary currency exchange fees.

South Africa’s financial regulation

A dual regulation system was introduced in South Africa a few years back. Two independent bodies were established, each with its own supervision mission. The FSCA oversees financial service companies, such as Forex brokers. It approves firms that are allowed to operate in the area. It issues licenses and can sanction companies that go against the laws and local requirements.


South Africa’s Prudential Authority (or PA) is the other regulator. They oversee all finance-related entities, except banks. This entity’s primary purpose is to supervise non-bank financial institutions. South Africa’s Reserves Bank is the final piece of the puzzle. It has a clearly defined role: it issues the ZAR currency in coins and bills and manages the nation’s gold supply.

Transfer funds to a South African trading bank

It should not be difficult to make your first Forex account deposit. This can be done via a local transfer to your bank or using a regular credit card.  South Africans have a limit on how much money they can send abroad (999,999 ZAR annually). To invest more, traders can request a fiscal exemption. You can also invest through a local broker. This will not require funds to be sent overseas.


South African-based brokerage firms now accept e-wallet transfers from providers like Neteller, Skrill (formerly Moneybookers), and the much-maligned PayPal. These are faster than bank transfers and offer the same level of fund safety.


EasyEFT is another local solution that allows you to send funds directly from your bank accounts. This can be done from your brokerage account. Simply search for your bank through the interface, and then fill out the required data. This safe and quick system is supported by many banks, including Investec and Standard Bank, FNB, Standard Bank, and ABSA.


PayU and PayFast, two more options available locally that many South African brokers support, are also supported.

South African brokers offer Forex trading software

To trade currencies, you must download and install the free software provided by your Forex broker. All trading software can now add technical indicators to your charts. This is great for analyzing price movement. It’s reasonable to assume that South Africa’s brokers offer demo accounts. This allows you to test out the software’s interface and features in real market conditions using virtual money. Demo accounts are also used by professionals to try out new strategies or fine-tune their trading.


Many brokers offer MT4 and MT5 options (MT is essentially the same as MetaTrader). It is the most widely used trading software worldwide. This is because of its easy-to-use interface. The main difference between the two versions is that the former can mainly be used for currency pairs trading, while MT5 supports all other asset classes, such as shares, commodities, and precious metals. 

South Africans are increasingly using mobile devices to trade

Nearly half of South Africans use smartphones to make online purchases and communicate with each other. Brokers have also taken their business to the next level by offering mobile versions of Metatrader, which allows traders to trade currencies and track their positions from anywhere. Both Mac and Android systems are supported.


These applications are free for traders and allow them to enjoy many of the same features as the desktop versions, such as zooming in on charts, one-click purchasing, stop-loss adjustments, and more. You don’t have to miss a trading opportunity regardless of whether you use your smartphone or tablet (or your desktop computer at home/office).


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