If you're interested in trading Forex in South Africa, you probably want to know whether it is illegal or not for you to do so. After all, with your capital at risk, the last thing you want is trouble with the law. Lucky for you, we've researched the legislation, and found that it is 100% safe and legal for you to trade Forex in South Africa.
The laws for trading Forex in South Africa are outlined in the "Financial Markets Act". This piece of legislation was created to:
"To provide for the regulation of financial markets; to license and regulate exchanges, central securities depositories, clearing houses and trade repositories; to regulate and control securities trading, clearing and settlement, and the custody and administration of securities; to prohibit insider trading, and other market abuses; to provide for the approval of nominees; to provide for codes of conduct"1
That means, the "Financial Markets Act" not only lays out the legal framework for trading Forex, but spread betting, CFDs, and binary options as well. For traders, a description of acceptable trader conduct is covered. Insider trading, artificial price inflation, and making deceptive statements2 are 3 examples of unacceptable conduct under the act that will result in a penalty and fine.
The Financial Services Board is "an independent institution, established by statute to oversee the South African non-banking financial services industry in the public interest".3 It is responsible for supervising the "Financial Markets Act" and any possible violations to it. Its powers and duties are defined within the Act.
Market operators, or trading platforms, are not specifically mentioned in the Act. There is several mentions of "external" services that are subject to laws outside of South Africa. These laws are said to apply if they are equivalent to those in the Act and "are supervised by a supervising authority".4 This indicates that South Africans should be looking to trade Forex on regulated platform, even if the regulator is not actually based in the Republic. CySec, ASIC, and FSC are a few of most common regulators for top Forex platforms.
Now that you have a better understanding of the legality of trading Forex in South Africa, it's time for you to choose a trading platform to make an investment with. We have created a list of the top Forex trading brokers for South Africa. Have look at that, and feel free to contact if you have any questions or concerns.
Last updated: 05/30/2017 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.