WATCH: Navigating Forex Markets and choosing the right FX broker
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Is it legal to trade Forex in South Africa? The answer is yes and the regulatory body that governs forex trading is the Financial Sector Conduct Authority (FSCA). While the Reserve Bank’s Exchange Control Regulations and Rulings control the flow of money in and out of the country and are applicable to all transactions, forex trading uses a forex broker and not foreign exchange flows occur.
To be a successful SA forex trader it’s important to use a trusted forex broker and make sure you understand to declare your taxes when a profit of loss is made from trading. The FSCA’s website shows a list of South African Forex Brokers but does not provide the finer details of each broker.
Choosing the right forex broker
The best way to find the best forex broker is to look at replicable comparison sites that show FSCA-regulated brokers such as this list of forex brokers in South Africa, the Wikipedia foreign exchange page or by visiting each forex brokers website such as Pepperstone which are in the process of receiving FSCA regulation or FxPro which are currency regulated.
It’s important to note that while forex traders can trade with a regulated or unregulated broker the risks of choosing a forex broker that has no regulation with the FSCA or overseas bodies such as Australian Securities and Investments Commission (ASIC) or the Financial Conduct Authority (FCA) greatly increases the risk of falling for a scam. Even choosing the best South African forex broker for your needs does not mean there are no risks to forex trading as leverage amplifies the chances of losing your money and you can even go into negative balance. Make sure you understand the risks and willing to take them before forex trading.
Source: iol.co.za