What is FSCA regulation for the Forex brokers in SA?

The FSCA, formerly known as the Financial Services Board, is a financial watchdog of South Africa and is tasked with regulating the market by protecting the citizens and the economy from any potential money laundering and fraudulent schemes. So what does FSCA stand for in South Africa stand? it stands for Financial Sector Conduct Authority, and although it is generally fine for South Africans to go for Forex brokers that are not regulated by the this specific regulatory body (offshore brokers), it is still recommended to go for the locally regulated one. The reason is that if something were to happen with your broker, for example, if they go bankrupt or commit any kind of fraud in terms of your investments, you’ll have a local authority to contact and have the funds restored. While when dealing with offshore regulated brokers, you will still manage to have funds restored, but it would take some time.

Besides, if you go for an FSCA regulated Forex broker, you’ll know that any type of misconduct will be dealt with by local authorities and laws, which you are quite familiar with.

Top FSCA regulated Forex brokers

We make sure to regularly overview the best FSCA-regulated Forex brokers, to see what they have to offer, how they perform and what is the feedback from their clients. As Forex market is quite a dynamic one, the new trends are quickly implemented in the broker services, which makes it a necessity to stay updated. The Forex brokers that are regulated by FSCA are often first ones on the market to modernize and renovate their products and none of the traders would want to miss the time-limited opportunity. Therefore, we try out best to regularly update the list to provide you with the most up-to date information on the best available FSCA-regulated Forex brokers. You can find the list of the top regulated brokers in the Forex industry below:

AvaTrade

Reviewing AvaTrade – Is it a legit Forex broker?

Starting Capital

$100

Financial License

CBI, BVI FSC, ASIC, FSCA, FSA, ADGM, CySEC

Promotion

Financial Leverage

1:400

Established

2006

Trading Software

MT4, MT5, WebTrader, AvaTrade Go

XM

XM broker reviews, interface, and trading tools provided

Starting Capital

$5

Financial License

CySEC, FCA, ASIC

Promotion

$30, 50%+20%

Financial Leverage

1:888

Established

2009

Trading Software

MT4, MT5, WebTrader

Plus500

Plus500 Review – A Wolf Among Sheep

Starting Capital

ZAR 1,500

Financial License

FCA, CySEC, FMA, FSCA, ASIC

Promotion

12-25%

Financial Leverage

1:300

Established

2008

Trading Software

MT4

CM Trading

CM Trading full review – How does this broker work?

Starting Capital

$250

Financial License

FSB

Promotion

Financial Leverage

1:200

Established

2012

Trading Software

MT4, SIRIX

Exness

Exness Review – Reliability Guaranteed

Starting Capital

10 USD

Financial License

FSA

Promotion

N/A

Financial Leverage

1:2000

Established

2008

Trading Software

MT4, MT5

IQ Option

IQ Option detailed review, user feedbacks, and background

Starting Capital

$10

Financial License

CySEC

Promotion

Not available

Financial Leverage

1:30

Established

2013

Trading Software

WebTrader

RoboForex

RoboForex Review – Multifunctionality

Starting Capital

€/$ 10

Financial License

CySEC, IFCS Belize, ICF

Promotion

30 USD

Financial Leverage

1:2000

Established

2009

Trading Software

MT4, MT5, cTrader

EagleFX

EagleFX Review – Fresh Perspectives

Starting Capital

$10

Financial License

N/A

Promotion

N/A

Financial Leverage

1:500

Established

2019

Trading Software

MT4

AMarkets

AMarkets Review – Orders Under 0.03 Seconds

Starting Capital

$/€ 100

Financial License

FSA

Promotion

25%

Financial Leverage

1:1000

Established

2007

Trading Software

MT4

OspreyFX

OspreyFX Review – Fast and Purposeful

Starting Capital

$10

Financial License

N/A

Promotion

N/A

Financial Leverage

1:500

Established

2019

Trading Software

MT4

HotForex

HotForex Review – 5 Industry Regulations

Starting Capital

5 USD

Financial License

FCA, FSA, DFSA, FSCA

Promotion

100%

Financial Leverage

1:1000

Established

2010

Trading Software

MT4, MT5, WebTrader

ForexMart

ForexMart Review – Your Trusted Broker

Starting Capital

15 USD

Financial License

CySEC

Promotion

30%

Financial Leverage

1:500

Established

2015

Trading Software

MT4, WebTrader

Tickmill

Tickmill Review – the most trusted broker

Starting Capital

100 USD

Financial License

FSA, FCA, CySEC, FSCA

Promotion

30% Welcome Bonus

Financial Leverage

1:500

Established

2014

Trading Software

MT4, WebTrader

FXOpen

FXOpen Review – maximum trading flexibility

Starting Capital

1 USD

Financial License

ASIC, FCA

Promotion

Forex Cashback

Financial Leverage

1:500

Established

2005

Trading Software

MT4, MT5, WebTrader, TickTrader

What is FSCAHow the FSCA regulation deals with Forex brokers

The FSCA has full authority over the Forex market in South Africa. Now, this may be quite a bold claim, but they do indeed regulate all of the legitimate brokers in the country. If there is any reason you end up with a broker that is not regulated by the official authority, no matter how much praise you’ve heard about them and how much money you’ve made with them, get out as soon as you can. The Financial Sector Conduct Authority has a special warning about these topics. They specifically say that any Financial Service Providers that don’t have a license, don’t meet the local requirements, or have some shady history should be avoided. Therefore, there you go: if the company you’re trading with has no local regulation, it’s time to hit the road.

When looking for a specific FSCA regulated Forex broker, it is always recommended to check the regulation they claim to have. If they say that they have a license, it’s also recommended that you double-check the claim. In most cases, the broker will give you information about their license number, especially if they are a child company or a larger one. Therefore you will have enough info to go on authority’s official website and search for all 3 options. If none of your research gives you any results, then it is time to worry and report them to the regulatory body. If they are featured on the list, see when the license was given and if it has expired or was revoked. In most cases, the regulatory bodies keep the license number active in their database, even if it is expired or revoked, so always double-check.

There are many guarantees that the local traders get when dealing with regulated Forex brokers in South Africa. The fact is that brokers truly want to be regulated, as that gives them a lot more trustworthiness with the local population. Besides, it’s best for you to go for a regulated broker as it will be a lot easier to utilize your local bank account for fast deposits and withdrawals in ZAR.

Let’s clarify

So now we should clarify that all of the brokers that used to be referred to as FSB regulated Forex brokers are now known as the FSCAregulated Forex brokers. The change that occurred within the structure was a very quick one. Therefore it was pretty hard to adapt to the new situation. Even Finance Minister Nhanhla Nene was involved in the shift.

Changes came not only in the naming, however, but there was also quite a lot of restructuring as well, therefore, even some of the already-regulated South African Forex brokers had difficulty adjusting to the new forex regulations South Africarequires now. But what were the major changes you ask?

Here’s a list of all the changes that happened:

  1. The FSCA is now responsible to provide quality education in the financial field to the customers. This will need to be done by procuring some of the best educators in the field, with fair treatment promotions.
  2. The FSCA is now responsible for ensuring the financial stability of the customers, meaning that if there is a slump in one of the customers’ finances, with no fault of their own, the FSCA can step in.
  3. The FSCA will be responsible to spread the information about all of the changes to companies under their regulatory jurisdiction. This is also a part of the fair treatment promotion.
  4. The FSCA is responsible for overseeing the development of the South African financial market Their main goal is to ensure the efficiency and integrity of the whole ordeal.

Despite the fact that this was just an announcement of the changes, some firms reacted to it quite irrationally. The FSCA South Africa board had to come out and very clearly explain that all of the changes will be happening over a period of time. This was decided in order to provide the companies with at least some time to adjust their business models in accordance with the changes.

What is FSCA regulationChanges in the structure

The structure has more or less been already discussed. However, we need to address all of the new faces that will be coming to FSCA South Africa. There will be some older staff missing, but that’s nothing new, as we’ve seen this with many other regulators who have undergone structural changes. A layoff or redistribution of staff is a common thing when a financial watchdog makes changes.

For the FSCA, all of the Executive Committee will remain the same, for now. However, this will be a temporary thing. As it is planned in the future to resize the whole committee. This may seem unfair, but the recommendations and the new jobs these people are going to receive disregards those assumptions immediately. As for Forex brokers, they will not have to worry about anything as their treatment will more or less remain the same. It can even be said that it will benefit them, as new faces come into the game with newer and better ideas.

Overview

The change is not something to dread, as it promises nothing but the best additions to the country. The only thing left for the customers and Forex regulated broker is to see whether or not this will affect their finances. In all honesty, there will be nothing really changing in the volume, however, as soon as the transition finishes, it is expected that the Rand will go down just a little bit, the same way it did when the news was first announced.

But by having this information, pretty much every trader will be prepared for a small bearish sentiment. It would actually be foolish not to follow the trend at this point, as everybody is preparing to sell their assets during new years.

The Financial Sector Conduct Authority will undoubtedly continue with the position that the FSB held in terms of making the companies adhere to the local laws and rules. There will be no sugar-coating from the new employees, the remnants of the old FSB Executive Committee will take care of that. It’s even rumored that the old Chair of the Committee will remain in his position.

FSCA regulations

Potential influences

The only thing that FSCA regulated brokers are dreading is the potential influence that ESMA regulations may have on the vulnerable watchdog at this point. ESMA knows very well that there is a potential migration coming in the future when it will be able to fully implement its new regulations. The European traders will definitely scatter, in search of better trading benefits (Leverages, bonuses). South Africa will be a primary destination, as they are in a similar timezone and their brokers have been proving over and over again that they are just as good as the best ones stationed in Europe.

What needs to be considered is the scenario of FSCA taking the ESMA route, which means that they will be too careful, as their system will be quite new to the environment. However, many representatives have already assured the finance community of South Africa that this will not be the case, that Financial Sector Conduct Authority will take its own route in terms of regulations. It would be devastating to restrict high leverage on the volatile Rand, even if it has been stabilizing for the past few months. That’s pretty much the driving force of regulated South African FX brokers right now.

Conclusion

In general, the community reacted quite positively to the news. There were no riots or serious opposition to the change. The Financial Sector Conduct Authority managed to convince everybody that the additions will only bring positive changes, with more transparency and fairness to the financial sector of South Africa. Therefore, now it might be even easier to find the most suitable regulated Forex broker South Africacan offer for you.

Besides, the new website looks way better. It’s so much easier to check a broker’s legitimacy. Plus the contact with the watchdog has been improving. All the better for us, traders. So in general, you don’t have anything to worry about, you most likely won’t even feel the change.

FAQ

Is online trading legal in South Africa?

Yes, online trading is legal in South Africa. There exists no governmental law prohibiting the online trading in the country and it is completely safe to trade online. The question arises due to the fact that there are many famous locally established and regulated brokers available for South Africans and therefore people assume it must be illegal. Also, many people wonder is Forex trading legal in South Africa? yes, trading Forex is legal, too, unless you get involved in money laundering or you avoid the declaration of your income tax. Furthermore, South Africa has its own Financial Sector Conduct Authority which acts the regulatory body for the Forex brokers, as well. However, it does not mean that if the broker is not regulated by this specific authority, then they are unlicensed. There are many other official organizations that regulate international brokers worldwide, such as FSA, IFSC, FCA, CFTC and few more depending on the location and home country of the brokerage firm.

How to check if a Forex broker is licensed?

Usually, the regulated brokers will often display their licenses on the websites, easily visible by the visitors. You could also come across the FSCA logo on many webpages of the FSCA regulated brokers. However, if you struggle to find the information regarding the license of the specific broker, you can always go on and ask the customer service to provide the name of the regulatory body and then visit the website of the body to check if the broker’s name is within the list of the regulated entities. Even if you would like to double check if your broker is regulated by FSCA, the official page of it provides the online list of all the entities and persons that are licensed. Keep in mind that you should never trust the broker that either has no license from the credible regulatory authority or you cannot find the information about the authority anywhere. If the broker claims that they are licensed, but the license issuer is nowhere to be found then it is a signal for you to immediately leave the broker. Do not simply believe in the reviews that brokers publish on their websites, as we cannot possibly know if they are legit and do not be fooled by the attractive offers and bonuses offered by unregulated brokers.

Should you trade with unregulated Forex broker?

The simple answer is no, you should not trade with unregulated Forex brokers. No matter how attractive their presentation seems, how rewarding are their bonus systems and how “clean” is the reputation of the broker on the internet, if they are not regulated by the official authority, you should avoid them at all costs. Always make sure that you are looking for the Forex regulated broker with the up-to-date license. The main reason for that is other than risking to getting scammed by unregulated brokers, the regulatory bodies will make sure that your rights as a trader are strictly defended when dealing with the regulated brokers. For instance, if the broker that you are trading with loses all of its company assets and goes broke, you will not lose your account funds and it is in fact thanks to the regulatory authorities. These authorities demand from the brokers to keep separate accounts for their company and their clients and audit them on a regular basis to make sure that there are enough funds available on the broker’s account to fully cover the needs of their clients’. In addition to the security of your account, the official authorities also guarantee that the traders will not be treated unfairly and will not allow unjust establishment of the terms by Forex regulated broker.