The regulations of Forex Trading vary with the regions. That is why most people look for brokers offshore. And, brokers look for those locations that do not have strict regulations. It gives them more freedom to trade with markets all over the world.
In South Africa, you need a broker in every step of Forex Trading. From opening an account to funding, they are responsible for helping you out in the complete process. This same implementation is done in many other parts of the world. But why is it so? Why are Regular Forex Brokers in South Africa a Must?
It is a question that has confused many people. However, we have the answer for you. So, let’s look at the reasons which explain why regulated forex brokers are necessary in South Africa. Let’s get started.
Reasons behind the Necessity of Regulated Forex Brokers in South Africa
First of all, it is important to understand the regulations of Forex Trading in South Africa. Both national and international level supervision is done on these regulations. At the national level, Financial Services Board is responsible for regulating the non-banking sector. They would not allow any trader who is not registered on their brokerage platform. It is the job of a broker to get a new trader eligible for Forex trading.
Similarly, there is also supervision on the International level. Regulatory bodies, such as CySEC, ASIC, and FCA, are tasked to regulate Forex.
If you are starting your career in Forex Trading, it is a Must to have your name in the eligible list of FSB. You can get there by registering yourself through the brokerage platform. Moreover, it is recommended to read the complete guidelines given by the international regulatory bodies.
With that said, let’s look at the other reasons why explain the necessity of regulated forex brokers in South Africa.
Keeping Safe from Scams
In every trading method, there are always frauds. When these scams are easily carried out in physical trades, online ones are even easier. That is why it is best to keep strict supervision. Many malicious companies join Forex Trading every day. It can be extremely difficult for a beginner to have even a good start, let alone a career.
In South Africa, even the national level regulation is strict enough to keep people safe from such scams. Due to this, FSB has found the right legal way to allow brokers to operate. Many brokers have found the regulations of South Africa better than most other regions. It is mainly because of the fewer frauds reported in there.
However, it is still recommended for newcomers to read Forex books and watch tutorials to steer clear of scams. Regardless of the region, having good knowledge of all the scamming tactics will help you keep your money safe.
Provide Trusted Brokers
Due to many reported scams, people were hesitant to choose the right broker. That is why it is necessary to keep all the Forex brokers in South Africa regulated. This way, the trusted brokers will be named for people to choose from. Plus, it is also helpful for beginners as they would not have trouble picking the right broker.
If you are looking to start your career in Forex trading, there are plenty of reliable brokers. Some of the most popular ones are FP Markets, FXTM, HotForex, etc. Consider all the reviews and find out the plus points of each broker before investing your money. It will save you money and help you a lot in the longer run.
Setting Up the Account
If there were not any regulations, anyone would be able to make accounts for Forex Trading. But now, you need a regulated broker to help you set up the account. They require all your identifications before registering you. And that’s not it.
After you have set up your account and are online, you need to start funding your account. It is all done with the help of a broker. They provide you with guidelines to follow in order to start trading with your account.
It keeps the traders safe from malicious accounts as brokers are constantly supervising the accounts. Also, since making an account requires proper identification, it is difficult for scammers to set up an account.
International Brokerage Houses
Although there are many international brokerage houses, beginners can be confused. They can even fall into the scams of local brokerage houses. These brokers are not reliable or trusted. That is because of their lack of exposure to the trading world. Moreover, most of these firms operate without any registration. Hence, if you see a brokerage house without a liscence, it is clearly a red flag.
However, that does not necessarily mean that all the international firms are legit. There are still many scammers out there. National Regulatory bodies like FSCA make sure that only the right brokers are exposed to people. Thus, regulated forex brokers are also a benefit to people.
Another reason is that people usually go for a broker offshore. That is because the broker would not have to follow the rules of their regions. While it is helpful, it is not a recommended way. International regulatory bodies are alo supervising Forex brokers in South Africa. That is why it is recommended to choose a trusted broker if you are looking for offshore options.
How to Choose The Right Forex Brokers in South Africa?
You can find various Forex Brokers on the Internet. You can even see which were the best ones in previous years. However, the right way is to look for the merits of each brokerage house, whether local or international. This way, you can decide which is right for beginners or experienced traders.
The reasons stated above show why are regulated forex brokers in South Africa a Must. In fact, it can be seen that how is this an advantage to people. Following the regulations and basic fundamentals, you can make the right start as well as a long career in Forex trading.