The Financial sector conduct Authority (FSCA) is a forex regulatory body likely to be found in South Africa. Each approved broker under FSCA is expected to have a local presence in South Africa, either have an office there or a director living in South Africa.
The financial regulator aims to protect citizens and the entire country from fraudulent schemes. The local laws and authority will deal with any misconduct by any broker under the arm of FSCA, and one might be sure that they will get a refund on their money. Some top brokers that FSCA regulates are AVA trade, plus500, CM trading, and Robo forex, among others.
How FSCA regulations deal with brokers
FSCA has full authority over the forex market in South Africa by controlling the legitimate brokers in the country. Once you realise that your broker is not regulated, no matter how much you can make with them, it is important to get yourself out of there as soon as possible.
it’s important when choosing brokers with ZAR account, to make sure they are legitimate who is licensed, and meets all the local requirements. To confirm that the broker you choose is legitimate, it is important to double-check the license number at the local authority’s official website.
If they are listed, it is important to check if the licence is up to date. Dealing with a regulated broker has its benefits, among which is there is more security in your investment and having one that can be joined to your bank account for faster deposits and withdrawal. Here are some responsibilities of FSCA;
- FSCA offers financial education to its customers, which the best educators do in the field.
- FSCA offers financial stability to its customers in case there is a slump.
- FSCA is responsible for spreading information about the companies under its regulatory changes to its customers, offering fair treatment to all
- FSCA is responsible for overseeing the development of the South African financial market to ensure integrity and efficiency in the money market.
Benefits if a regulated broker
A regulation body like FSCA requires brokers to submit periodic statements to them for auditing purposes to avoid scams. One of the things that should be required on the statements might involve the brokers’ fees that each customer is charged.
Trading platforms must display risk warnings before traders sign up for a trading account. They are ensuring the average number of accounts that lose capital.
Regulatory bodies determine the maximum leverage, therefore, adding security to customers’ capital. Leverage involves borrowing money from your broker, and therefore it might lead to one losing more than they had initially invested.
A regulated broker will require you to give a verification ID and more proof of address while signing up hence preventing money laundering.
If your broker goes bust, then the regulating body is responsible for assisting its customers in regaining their capital. Investor compensation funds ensure that one gets some if not all of their funds back.