As more FOREX traders enter the market, FOREX brokers are trying harder to keep their customer base satisfied, thereby ensuring continued revenues that boost profitability. New trading clients are mainly concerned with the risks inherent in FOREX trading, meaning they are always open to good advice that will ensure they keep away from substandard brokers. To help traders navigate this tricky landscape, we have introduced a list of the best FOREX brokers in South Africa today. This list is the result of our steady research in this area. Arincen will also share its research methodology so traders can understand why and how we selected the companies for special mention.
|Company name||Regulations||Minimum deposit||Main branch||Open account|
|FCA||$450||United States of America|
|Main branch||United States of America|
|Company name||ICM capital|
|Main branch||United Kingdom|
|Main branch||United Kingdom|
|Company name||ig markets|
|Main branch||United Kingdom|
The FOREX market is the largest financial market in the world at some six trillion dollars daily, only followed by the credit market. The market operates 24 hours a day and five days a week (Monday through Friday), except international holidays. Brokerage firms play a key role in this regard by enabling clients to buy and sell through a trading platform. This could be done either on a personal computer (PC) or more recently by using a smartphone.
Trading FOREX is legal in South Africa, as long as it does not contravene money laundering or exchange control laws. FOREX brokers operating in South Africa must be regulated by the Financial Sector Conduct Authority (FSCA), a tier-2 oversight body.
The broker must be in good standing with the Companies Intellectual Property Commission (CIPC) that is responsible for company registration. Traders must declare all profits to the country’s tax authority, the South African Revenue Service, and readily comply with Know Your Customer (KYC) requirements. Islamic FOREX trading is permitted.
A first step in FOREX trading is identifying the spread differential, defined as the difference between the bid (sell) price and the ask (buy) price of a currency pair. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. This is, indeed, the biggest source of profit for the FOREX company. Good companies typically offer a EUR-USD spread of three basis points.
As for commissions, FOREX trading companies can be placed in three categories. The first offer fixed spreads, the second tender variable spreads, with a third category of companies offering low-cost spreads but that come with a (relatively high) fixed commission.
Traders in South Africa are not hampered by embargoes on tradable assets that are evident in some highly regulated countries. For example, trading cryptocurrencies is not legal in the US. You can choose from an array of markets and trade all available instruments. Besides FOREX, you can diversify into areas like cryptocurrencies, commodities, bonds, indices and contracts for difference (CFD).
Brokers operating in South Africa offer traders multiple methods to make deposits into their trading accounts. Most deposit methods, such as bank wire, credit and debit cards, in addition to electronic wallets, are accepted. Brokerage accounts are denominated in South African Rand, which is the national currency. Of course, once you have made a deposit in your wallet, you can convert it into a different currency, in keeping with whatever the broker supports. Withdrawals, however, must be processed in South African Rand.
Traders need to ensure that deposits and withdrawals are processed through the same channels. Third-party deposits and withdrawals are forbidden. To withdraw money, traders must initiate a withdrawal by submitting a request through their trading account.
South Africa’s currency is considered a minor currency, meaning that exchange rates can fluctuate regularly, as is normal with the currencies of developing nations. Traders need to keep watch of prevailing exchange rates and only process withdrawals denominated in stronger currencies when the exchange rate is advantageous for them.
As timing is key to FOREX trading, you must pick a brokerage firm that is able to provide good customer support around the clock. This most notably includes the company representatives being easy to reach, fast and polite, which will in turn spare you of having to worry about problems down the road.
When it comes to sharing sensitive personal information online, such as a credit card, cyber security is paramount. You should, therefore, always look out for SSL certification and two-factor authentication (especially when registering with a new site).
To provide our users with peace of mind, we at Arincen have introduced the “Company Checker,” which is an online tool directly linked to the international website Scamadviser. The latter is an independent site that checks the countries in which these FOREX Websites are managed, where the server is located, in addition to other security and informational aspects. It ranks FOREX firms by granting them a score ranging from 0% to 100%, with the best FOREX firms usually receiving a score of 90% and above. Any company that has achieved a score lower than 85% should thus be avoided. Simultaneously, whenever looking for a new FOREX broker, users must ensure its website is fast, modern and user-friendly.
All major trading platforms are supported by South African brokers as the country has the technological infrastructure to accommodate even the most progressive, tech-enabled brokers. Industry trading platforms like MT4 and MT5 are easily catered to by all local brokers.
These well-known platforms are supported in desktop and mobile form. Proprietary broker platforms are also catered to, as many of these can be accessed through web browsers or a simple download. Traders can receive all the normal features, like Electronic Advisor (EA) assistance, charting tools, indicators, electronic communications network (ECN) accounts, and educational data.
Arincen provides a social network that drives a loyal following among its users. Traders use the social network extensively as the communal element of investing is an important part of modern online trading.
Traders like to feel as if they are part of a community. This is why you can visit Arincen’s website and join groups of sophisticated followers whose knowledge and experience can guide you to becoming a more successful trader.
At the get-go, it is important to learn more about regulatory bodies and their role in the FOREX market. These are government entities charged with regulating the sector. Their role is two-fold:
1. Observing and regulating the work environment in the FOREX market; and
2. Protecting investors and their funds.
FOREX firms must at least obtain one license from a relevant regulatory authority. Otherwise, they should be avoided at all times. In this context, we present the five most important FOREX market regulatory bodies from around the world.
1. The Financial Conduct Authority (FCA), UK;
2. The Swiss Financial Market Supervisory Authority (FINMA);
3. The Australian Securities and Investments Commission (ASIC);
4. The Financial Markets Authority, New Zealand; and
5. The National Futures Association (NFA), US.
While FOREX market regulatory bodies exist in almost every country, these are the most important five and also the most strict. To learn more about other regulatory bodies, please visit arincen.com, where you will find a comprehensive global database.
To confirm if a FOREX broker is, indeed, authorized by the FSCA, the first thing to do is to identify the FSP registration number from the disclosure text at the bottom of the broker's homepage. For example, here's the key disclosure text from FXDD’s website,
“FXDD Malta Limited holds an Investment Service Category 3 License and is regulated by the Malta Financial Services Authority (MFSA) of Notabile Road, Attard, Bkr3000, Malta MFSA IS/48817.”
The second thing to do would be to look up the FSP number on the financial register available on the FSCA’s website to validate that the broker is currently authorized in South Africa.
One of the first things a new FOREX trader ought to do is to check the extent to which the FOREX brokers abide by the rules and regulations governing its operation. Emphasis must be placed on what it can and cannot do.
There are seven things brokerage firms cannot do:
In short, the role of brokerage firms is strictly confined to facilitating buyers and sellers to come together toward an agreed-upon commission. FOREX brokerage firms that violate any of the seven rules aforementioned should be avoided. However, should the trader wish to receive any of the above-mentioned services, our advice is to seek an expert website like Arincen, something we will delve into toward the end of this article.
The classic online trading scam involves criminal syndicates setting up fake online trading platforms that are indistinguishable from those that are genuine. They often have attractive websites with acceptable functionality.
From there, fraudsters seek to hook in unsuspecting traders. Trading with a scam broker often seems to start off well, with some early gains. Many unsuspecting investors report that they started small, then invested more, but when the time came to withdraw their funds, either found their accounts frozen, or were advised of some technicality of which they were not aware before. At this point, the online scammer normally disappears and any company contact becomes impossible to reach.
Traders are lured in by compelling social media advertisements or even contacted directly. You are told about a once-in-a-lifetime investment offer on which you must capitalize without losing a moment. You are sometimes told that the deal was specifically created for people like you, so you should keep it quiet.
Besides checking if the broker is registered by a reputable regulator, it’s best to exercise discretion in the face of offers like these. If the promised returns are way above market rate and there seem to be no clear risks or dangers, it is time to question them.
Sometimes you are told that in order to access the deal, you must pay additional fees to get in on the scheme. You might have to install their bespoke software in order to get access to their great secret formula. These are clear red flags.
There is no compensation available for South African traders who lose their money. The FSCA merely supervises and licenses the activities of brokers. Its powers do not include meaningful censure of fraudulent financial institutions.
The FSCA’s remit is to prevent unfair activities intended to deceive customers. The regulator can impose small fines if violations are detected. However, it does not oblige FOREX brokers to offer compensation schemes.
FOREX brokers must provide a range of services and features that gives traders the best chance to be successful. Platforms and tools are the obvious difference maker. These platforms, such as the well-known MetaTrader tools, must provide fast execution and good charting and analysis. These platforms work best when available as desktop versions with mobile solutions on offer, too.
As far as account types, the broker needs to offer different levels of account functionality for beginner traders and advanced traders. Accounts must offer many tradable instruments, low account balances, flexible contract sizes, and regular customer support.
It is preferable for brokers to offer a demo account. Deposit and withdrawal methods must be plentiful, with low fees and minimal processing times. Finally, the best brokers offer an array of premium market analysis, rolling news alerts, and advanced data analytics. Education is a big part of FOREX trading, so having a strong research and educational section with a plethora of educational videos and articles for new and experienced investors is desirable.
Put simply, Arincen is a social networking platform that brings together traders and experts to exchange expertise and ideas. Together, we evaluate the best FOREX brokers in the world while offering a compressive suite of services and tools, all in one place, either via a computer or a mobile app. The platform is so rich, one can create his own private portfolio of traders and experts they like and, at the same time, follow their recommendations and investment sentiments.
Further, thanks to Arincen, users can keep an eye on market-price developments, as well as the latest news. Users can also benefit from the network’s educational courses on offer, to say nothing of exciting Webinars – all done in a modern and fast-paced work environment. Get all what you need in one place, not less, not more.
The team at Arincen collected more than 120 pieces of data covering in excess of 100 licensed FOREX companies. Data collection was done in three ways:
Other Websites that have ranked FOREX companies.
survey questionnaire (referred to here as Survey “1”) we had sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its own relative weight. These include licensing, deposits and withdrawals, number of assets, etc.
Afterward we validated the data by:
Registering with FOREX companies as a secret shopper and/or as Arincen.
Survey number “2,” in which we asked these companies’ customers for important feedback and past experience.
The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful to ensure the most accurate assessment possible, including taking into account different languages, as well as the various mobile-app operating systems, eg, Apple, Samsung, etc.
To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX brokers to evaluate our own research and it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%.
Yes, FOREX trading is legal in South Africa. As long as the broker is correctly registered and abides by the financial oversight laws of the country, including the central bank for FOREX transfers, the South African Revenue Authority (SARS) for tax affairs, and the CIPC for company affairs, then FOREX trading is legal.
The FOREX market is the largest financial market in the world at some six trillion dollars daily, only followed by the credit market. The market operates 24 hours a day and five days a week (Monday through Friday), except international holidays.
A first step in FOREX trading is identifying the spread differential, defined as the difference between the bid (sell) price and the ask (buy) price of a currency pair. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. This is, indeed, the biggest source of profit for the FOREX company. Top FOREX brokers typically offer a EUR-USD spread of three basis points. As for commissions, FOREX trading companies can be placed in three categories. The first offer fixed spreads, the second tender variable spreads, with a third category of companies offering low-cost spreads but that come with a (relatively high) fixed commission.
As timing is key to FOREX trading, you must pick a brokerage firm that is able to provide good customer support around the clock. This most notably includes the company representatives being easy to reach, fast and polite, which will, in turn spare you of having to worry about problems down the road.
Yes, profits from FOREX trading are taxable. FOREX traders who reside in South Africa are required to declare all their profits from FOREX trading, be it onshore or offshore, on their annual tax returns.
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