Before mentioning who the best forex brokers in South Africa are, it is essential to understand the history of financial trading in South Africa and how the country emerged as the number 1 forex trading hub in Africa.
The 1886 discovery of gold in South Africa's Witwatersrand area propelled the large-scale mineral mining and eventual formation of the commodity market in South Africa. The Johannesburg Exchange & Chambers Company, later changing to become the Johannesburg Stock Exchange in 1887, was founded by Benjamin Minors Woollan. Initially set up as a venue for buyers and sellers to trade gold and other mineral commodities, this exchange has evolved into Africa's most prominent financial trading hub.
Over time, South Africa has emerged as Africa's number one forex trading location, attracting both forex trading providers and traders alike.
The South African forex market was plagued recently by loads of scams. In 2021, the regulator of the South African forex market stepped up its game and began efforts to sanitise the market. The first step was a recertification of South African forex brokers. This process meant that all existing FSB licences were cancelled, and forex providers had to reapply to have their trading authorisations restored. The process is still ongoing, but the little done so far has brought back some sanity to the market.
FX trading in South Africa is a regulated activity. In charge of regulating the forex markets up until 2018 was the Financial Services Board (FSB). This agency was replaced by the Financial Sector Conduct Authority (FSCA) after the former was split into two. South Africa now has two financial regulators: one for the banking industry (Prudential Authority or PA), and the FSCA, which regulates the forex brokers in South Africa.
The FSCA's job in regulating forex brokers in South Africa is both supervisory and corrective. The FSCA authorises and supervises the forex brokers in South Africa. The FSCA pursues a path of ensuring a healthy and transparent dealing environment for traders. On the enforcement end, a Financial Services Tribunal handles cases of infractions brought against providers of brokerage services in the forex industry. The FSCA has representatives on this tribunal. The tribunal's powers are as good as that of a legal court. There is also an Appeal Board which a retired judge heads with membership drawn from the financial services industry. The Appeal Board functions as an appeal court of sorts, where persons aggrieved by the decisions of the FSCA or the Financial Services Tribunal can challenge such outcomes.
Forex brokers in South Africa cover locally based forex brokers and also brokers in offshore jurisdictions that receive heavy patronage from the local trading community as a result of the attractive trading conditions. The needs of forex traders in South Africa cover areas such as the payment channels, choice of trading currency, platforms and trading conditions.
In choosing payment channels, it is essential to realise that South African financial authorities have strict forex controls. Transactions above $10,000 are usually flagged and may not even be allowed. Also, a trader can only send specified amounts on a monthly and annual basis to a foreign bank account, subject to legally allowable limits. There are also restrictions on ownership of cryptos, so this is not a workable payment channel. The use of bank cards and bank wires are the most attractive payment channels available with forex brokers in South Africa. A local solution known as EasyEFT allows traders to use their bank cards to conduct transfers. It works like an interbank wire transfer method. Forex brokers in South Africa domiciled in SA are the best for this method, as the funding process entails transferring money from your account to the broker's account. E-wallets such as Skrill and Neteller are also preferred for funding and receiving forex account withdrawals.
Following the above, it is clear that the South African Rand is a preferred choice for local traders. It is the 19th most traded currency in the world and is listed on forex platforms as a pairing with the USD and the Euro. A local currency funding option eliminates the need to acquire foreign currencies and allows for smooth transactions on brokerage platforms without navigating the murky waters of foreign exchange controls.
Regarding trading software, the MT4 and MT5 platforms are the unrivalled choices. The forex brokers in South Africa offer these platforms in all formats. Mobile trading is a huge draw, and mobile apps for MT4 and MT5 are available. Penetration of Android device usage in South Africa exceeds that of the iPhone, so the recent delisting of the MT4 and MT5 from the app stores is not much of an issue. The Android versions are still available for use.
Recent policy changes in South Africa aimed at boosting the government's revenues after the COVID-19 crisis has made the taxation of forex trading income mandatory. If this is an issue for you, you can select some offshore forex brokers that offer services to South African traders, which are found in our list below.
Here is what forex brokers in South Africa typically offer their clients.
Forex brokers in South Africa are, by the definition of this article, either located in South Africa or offshore jurisdictions that provide comparable services to South African traders. The target traders have peculiar needs, and the brokers on our list are well-placed to meet these needs. Traders want better leverage and operate in a regulated environment that does not unnecessarily overburden traders or price them out of the market. Go through the list and select the ones that give you what you desire in a forex brokerage.