Stricter OTC Regulation for Forex Brokers in 2022
The FSCA issues the first OTC licence to a local forex trading platform
The local authority cracks down on unethical forex brokers by introducing the new over-the-counter (OTC) derivative providers regulation. This stands to clean up the industry, dominated by greedy, offshore brokers and unexperienced charlatans.
Many brokers operate in the grey area and work outside South African regulations, making it unsafe for South African traders and their funds.
Simply put, you must trade with an authorised OTC derivatives provider if you want to trade Forex and CFDs online in South Africa. In short, this means there is now a stricter, regulated space that online forex brokers must comply with, ensuring a safe and secure trading environment for all South African traders to deposit funds and trade online locally.
Khwezi Trade, a division of Khwezi Financial Services (Pty), are the first in line as a South African owned forex platform to be awarded this OTC licence. OTC Licence Certificate
Exert from FSCA press release issue on 8 September 2020.
“The FSCA has taken steps because of the substantial risk to the public in instances where entities and individuals act as issuers of derivative products (derivative providers) without adequate financial reserves, risk management systems and knowledge and as an on-going effort to remove FSPs who are prepared to act outside the law from the financial industry.
The FSCA has created a regulatory and a legislative framework for the supervision of entities who wish to operate in the Over-the-Counter Derivative Providers (ODP) market, as an issuer or product provider.
The FSCA reminds the industry that: All ODPs need to be licensed by the FSCA.
As forex derivative platforms are a very popular space for scammers and fraudsters to ply their trade, additional care should be taken when dealing with any platform. One level of assurance is checking to see whether the provider is registered with the FSCA as an FSP or ODP.”
Monty Barnard COO says: “We are very pleased to be identified by the FSCA as one of the leading and competent forex trading platforms in South Africa. This shows that we are not a fly-by-night organisation. We are here to stay and will continue to deliver a consistent and dedicated service to our clients.”
Why Khwezi Financial Services?
Khwezi Trade provide Rand-based forex and CFD trading accounts and ensure the safeguarding of client funds through segregated, third-party bank accounts. Unlike foreign brokers, your trading money does not go offshore, but remains within the borders of South Africa and thereby complying with the South African Reserve Bank laws.
Trading the forex market can be rewarding but does carry a lot of risk. At least now with approved OTC brokers, Khwezi Financial Services has less counterparty risk, which is a good thing.
Do not hesitate to contact our head office on 021-300 3117 or email [email protected]