If you’re looking for the best FSB or FSCA regulated brokers, we have the information you need. Our experts have decades of experience in the trading and financial industries, and are here to help you pinpoint the best brokers who have been regulated by the FSB. We’ll also give you background on who the FSB are and what they do – and their successors, the FSCA.
Forex trading in South Africa is still very much in its infancy. However, judging by the speed at which other countries have embraced the world of trading, those of you living there shouldn’t be worried. The South African financial sector is one of the most liberalized in the African continent and holds great potential for traders. For those of you starting out on your forex trading journey, finding a regulated broker in South Africa is an important first step.
To find out more about the FSB or FSCA and their best regulated brokers, read our free guide below.
Best and most trusted forex brokers in December 2024
Is it safe to trade in South Africa with FSB or FSCA regulated brokers?
Things in South Africa have become much more stable in recent years and that has included the South African rand. However, the government has been very conservative in relation to exchange controls to limit the consumer’s ability to invest funds offshore. Nevertheless, there is a developed infrastructure in place and a more than adequate oversight.
Plenty of due diligence is required to trade in South Africa – and the shutdown of the FSB epitomizes this. There is always the possibility of fraudsters taking all your money. Security and safety should feature high on your list of priorities, and it’s vital you do your own research.
You should always check the details of any regulated broker, not just brokers located in South Africa. All the regulatory bodies give members of the public access to lists of approved brokers, and it’s straightforward to find the necessary information. You’ll be able to check whether there is a local office, the status of the license, and whether there have been any complaints.
What is the FSB?
In South Africa, all the best brokers used to be regulated by the Financial Services Board of South Africa. The responsibilities of the FSB included overseeing and regulating all financial intermediaries in the nation.
The FSB had some very substantial powers. Remarkably, it was able to impose unlimited fines and penalties on any FSB regulated brokers found to be breaking the rules. It also operated a customer complaints service which you could use to alert the authority to potentially illegal or unethical activities of a financial service company.
However, the FSB has subsequently been replaced by the Financial Sector Conduct Authority (FSCA).
What were the FSB’s responsibilities?
The Financial Services Board was an independent body and was created following recommendations featured in the Van der Horst Committee. The Committee advised there was a need for an independent supervisory and regulatory body.
The FSB was also a member of the International Organization of Securities Commissions (IOSCO), and participated in the activities of a number of African regulatory bodies. Of particular importance were those in the Southern African Development Community region.
What is a FSB regulated broker? And why is regulation important?
Regulation is possibly one of the most important factors to consider when choosing a South African forex broker. Choosing a properly regulated broker ensures that:
- It has adequate capital to cover trading losses
- Your funds are held in secure and segregated accounts
- It operates a fair trading environment providing the best possible market prices
It is a simple process to check a broker’s regulatory status and whether previous clients have had problems. Forex trading is a risky enough investment without adding to the risks involved by choosing an unregulated broker.
In the past, an FSB regulated broker will have given you peace of mind, and allowed you to concentrate on the more important choices of which trades to make. These days, it’s the FSCA who give you that reassurance instead.
What you can do if you have a complaint about an FSB regulated broker
In 2002, the Financial Advisory and Intermediary Service established the Office of the Ombud for Financial Services Providers. Its role is to resolve disputes between financial service providers and clients. It acts in an informal, economical, expeditious and procedurally fair way.
There are, however, a couple of restrictions. The violation must have occurred on or after September 30th 2004 and not exceed R800,000. The services of the Ombudsman are free and easily accessible for all consumers. It is an independent organization promising impartial assistance, performing without fear, favor or prejudice.
The FAIS Ombud is able to deal with the following types of complaint:
- When a financial service provider has contravened or failed to comply with the requirements of the FAIS Act and the complainant has suffered or is likely to suffer financial damage or prejudice
- When a financial service provider has negligently or wilfully offered a financial service which has caused damage or prejudice to the complainant or is likely to result in the same
- When a complainant has been treated unfairly
Before making an official complaint, it will be your responsibility to try and resolve the problem with the financial service provider. They’re permitted six weeks to resolve the matter. If you are unhappy with the outcome, you will be able to make an official complaint – providing you raise it within six months.
The FAIS Ombud is obliged to investigate the allegation, following and implementing any procedures it deems necessary. Any party involved in the complaint has the right to legal representation. The first step will be to try and reach a satisfactory conclusion via mediation or by recommending a resolution. If it is not possible to settle the matter with the help of both parties, the FAIS Ombud will make the final decision. It can decide to either dismiss the complaint or uphold it and award compensation. The Ombud’s decision is final and has the same effect as a civil judgment made by a court.
How can I check for FSB regulation?
Most countries have their own regulatory body, but standards do vary. You will find that some brokers are registered and licensed in more than one country. Most will list which regulators they are licensed with on their website along with a registration number. Make sure you verify this information, as there have been a number of brokers declaring false or misleading information.
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Frequently Asked Questions (FAQs)
FSB stands for Financial Services Board. It was the financial regulator for South Africa from 1990-2018, after which it was replaced by the Financial Sector Conduct Authority (FSCA). Currently, the best brokers in South Africa are regulated by the FSCA
When it was in power, the FSB was responsible for regulating brokers in South Africa. This meant making sure organizations were following the rules and laws of the country, and imposing fines where necessary. In fact, the FSB had the power to deploy unlimited fines!
The FSB was deemed unsafe and replaced by the FSCA in 2018. The Public Protector lambasted the FSB for more than a decade of failures in a 2019 report, although the FSB went on record to say the report was widely inaccurate in an attempt to defend itself as a safe and respected broker.
As there’s no FSB regulation anymore, you can instead look for FSCA regulated brokers. Normally, the broker’s website has a license number at the bottom of the page, or in an ‘About’ section. To be extra safe, you can cross check this information on the official FSCA website.
