Why are regulated forex brokers in South Africa a must?

Are you from South Africa, and you have recently developed an interest in Forex trading because it is popular? But you are skeptical of the brokers and the assurances and schemes they throw you and the claims and promises they make with their silver tongues. Your doubts and skepticism are warranted.

Forex trading has recently gained a lot of popularity worldwide because it is very accessible and easy to start.

  • Convenient
  • 24/7 trading
  • Low starting deposits

But more specifically in South Africa because of

  • Pandemic
  • Unemployment
  • Advertisement and hype of Forex

So, because of the increase in popularity and more and more people starting to invest in a trade market like this, you must do your homework before starting in the Forex trading market. And the first step is finding the right Forex brokers in South Africa.

It is not hard to find a good Forex broker in South Africa, and since most Forex trading could be done through the internet, you may search and find a broker right away.

But there are a few things to look out for when searching for a potential broker.

How not to find Forex brokers in South Africa

Be a little skeptical: A little skepticism is good when you invest your money into something you wouldn’t want any scammer to take your money and go away, so if anything feels wrong, ask, and search and contact the authorities.

Greed is a curse: If you see a broker claiming that they can offer you 1000:1 Leverage with just a five-dollar minimum deposit, and all you have to do is pay a one-time fee to get their services which of course will be refundable, don’t fall into the traps that sound too good to be true.

Forex is not a gambling market: You might think so, but we hate to break it up to you that it is not. With all the advertisements and motivational speakers around who claim they changed their life over a week with Forex trading are not the ones you want to follow by blindly going all in and investing all your money with a broker who makes the highest return claims

Popularity has its downsides: With all the popularity that Forex is getting, there are scam networks active that target people acting as brokers and telling them to buy a gift card and sent it to them because a time-limited Forex deal is available, just ask them if it is so good why don’t they but it themselves?

Now that you know what stuff can save you from instantly losing your money, let’s talk about how to find a good broker and regulated Forex brokers in South Africa because the moment you step into the market looking for a broker, you’ll become a prey in the eyes of these people so you should know how the system works, what are your rights and what stuff is illegal to do as a Forex broker in South Africa.

FSCA is your friend

Financial Services Board Authority is a government department specifically made to regulate and manage trading markets, and it is also responsible for licensing the brokers. You can contact the authorities for information and in case of any queries as well.

What is a regulated broker?

A broker is a mediator firm or a person that lets you trade on the exchange market. Being regulated or licensed means that they are issued a license by the FSCA to work and comply with their rules. This means that if they break any rule, legal action can be brought against them.

Are unregulated brokers illegal to trade with?

No, you can trade with an unregulated broker, but then you won’t be protected by the FSCA and its laws, so you’ll most likely be on your own.

If there is a mishap, you can file to get your money back, but it will be a longer process managed in another country where the broker is licensed.

Benefits of using a regulated broker

FSCA’s protection: FSCA licenses the brokers carefully, and after performing background checks on them, so you don’t have to worry about your money being used in illegal activity. The FSCA’s makes the brokers abide by its rules and keeps a check on them. It makes them answerable to the South African government if they break any rule, and their license can be revoked.

Security in case of bankruptcy: Suppose your regulated broker goes bankrupt tomorrow, and you lose all your money. In that case, you can contact your local authorities to restore your money. However, this will not be the case if you are dealing with an unregulated broker. In that case, you’ll be mostly on your own.

National Laws: As a citizen of South Africa, it is also a very strong reason to trade with a regulated broker. If anything goes wrong and there is a lawsuit and justice department involved, you’ll be going through a familiar justice system and laws in your own country.

Immunity to fraudulent schemes: If your unregulated broker introduces to a new scheme that on paper looks good to you and you invest in it, you’ll be at a higher risk of losing that money if it turns out to be a fraud.

The institution monitors FSCA’s regulated brokers, and they keep an eye out for the schemes that the brokers introduce. They make sure that the public will not be scammed by investing in them, and if somehow you still get frauded, the local authorities will take action against the broker.

Shortlist of some of the most popular Forex brokers in South Africa

  • Tickmill: Globally recognized reputed Forex broker
  • HotForex: Easy to use platforms and competitive trading fees
  • Exness: Offers derivative instruments

A final word on Forex brokers in South Africa

A regulated Forex broker is a must in South Africa because you don’t want to risk being prey to any scam or losing your money in an unfortunate event. FSCA and other monitoring authorities in South Africa ensure the security of their people trading with Forex brokers.