Abstract：Africa is developing as a new FX trading frontier. The continent's wide retail and spot forex trading has huge potential, with over 41 currencies scattered over 54 nations. With a very potential currency market, South Africa is leading the way.
With that being said, Forex and financial scams are on the rise in South Africa and Africa alike. WikiFX is helping fight this battle by proving traders with all necessary information regarding brokers. They also help enquire about broker and forex scams.
The financial market in South Africa is well-organized and developed. For example, the country is home to major financial institutions such as ABSA, Nedbank, and Standard Bank. Furthermore, the Johannesburg Stock Exchange (JSE) is Africa's largest stock exchange. South Africa is the world's second-largest FX market. This is why.
South Africa's financial market is well-organized.
South Africa has the most developed and well-organized FX market in the world. To put this in context, the retail FX market in South Africa grew from $14 billion to $21 billion between 2013 and 2016, according to furtherafrica.com. The remarkable regulation of forex brokers operating in South Africa, geographical location, and liberal political views are just a few of the aspects that make the South African market interesting. It also has a positive link with other countries' economy. As a result, the country has become a prominent trading and brokering centre for forex traders. Other African countries' financial markets are still developing.
Traders in their tens of thousands
South Africa has over 190000 forex dealers, which is second only to Nigeria, which has 200000. Kenya is in third place, with over 50000 forex dealers. The remaining 750 000 traders in Africa raise the overall number of traders in Africa to 1.3 million. Nigeria, on the other hand, appears to have a sizable consumer base. South Africans, on the other hand, have a sizable consumer deposit. South African traders have an average monthly deposit of $742.04, whereas Nigerian merchants have an average monthly deposit of $514.42. Kenyan merchants make a monthly deposit of $363.56.
The daily forex trading volume in South Africa, including spot and CFDs, was at $2.21 billion in 2019. According to the Bank of International Settlements' survey of foreign currency and OTC markets, total turnover for all fx instruments is a stunning $21 billion. Nigeria's daily volume, on the other hand, was $314 million per day, while Kenya's FX volume was just $192.66 million per day. Furthermore, the South African rand is the most widely traded currency in Africa and is ranked 18th internationally.
South Africa has become quite tempting to both traders and brokers as a result of these alluring stats. The number of brokers in the nation has increased, particularly from Europe. In addition, local businesses participate in the lucrative sector.
Regulations that are strong
Although there are many regulations for brokers to follow, these documents are not readily available for traders. WikiFX allows traders to view all broker's licenses and regulations to provide transparency.
The local regulator for non-banking financial firms, the Financial Services Conduct Authority (FSCA), has also played a key role in the expansion of South Africa's FX market. It is one of the oldest and most recognized regulatory agencies, with over 1000 financial businesses registered under its name.
The forex market in South Africa was not effectively regulated at first. As a result, there has been a rise in criminal operations and frauds. To combat unlawful operations, the regulator decided to adopt tough guidelines. This resulted in the creation of a new licensing regime. The new license mandates that brokers supply FSCA with information such as pricing, transaction details, and investors, as well as their geographic location. The information is intended to reduce illicit activity and guarantee that brokers treat traders fairly.
The FSCA's regulatory criteria are less stringent than those of other international authorities. This allows forex brokers to make huge profits while lowering their operating expenses. As a result, several international brokers have entered the market in order to take advantage of the advantageous business climate.
Nigeria, on the other hand, is the world's second-largest foreign exchange market, with no rules in place. To prevent dealing with scammers, traders turn to brokers who have been certified by the FCA or the FSCA. Kenya has done a decent job of controlling the currency market. For both traders and brokers, it is one of the greatest marketplaces. Although it is still in its early stages, Kenya's capital markets body has put in place mechanisms to control brokers.
As a result, South Africa has established itself as Africa's top forex trading and brokering market. The southern African country is a favorite market for brokers due to rising demand for forex goods, a strong financial industry, and current laws. Leading brokers from throughout the world, such as Hot forex, FXCM, IG markets, and Capex, have set up operations in South Africa. To broaden their network, the brokers have set up shop in South Africa. To entice South African traders, several of these firms provide trading accounts in the South African rand, which are referred to as Forex Brokers With ZAR Accounts. In South Africa, a ZAR trading account is the most popular alternative.
South Africa and the rest of Africa are affected by the ESMA regulations.
The European Securities Market Authority's intervention efforts last year had a substantial impact on African trade. Basically, brokers all over the world were hunting for new markets outside of Europe. Africa is one of the regions where they have discovered a promising market.
South Africa has attracted brokers because to its large market and well-established laws. The forex brokers want to be registered with the FSCA and utilize South Africa as a gateway to Africa.
More brokers will continue to come to Africa as the number of traders and demand for forex products such as Spot Fx, cryptocurrencies, indices, commodities, and CFDs grows. The region permits brokers to use greater leverage and, as a result, make more money.
Final Thoughts
As previously stated, South Africa's regulatory structure is well-developed and organized. Both traders and brokers benefit from South Africa's trading legislation. These laws entice traders from other African countries. In other words, traders in other nations, such as Nigeria, rely on FSCA-regulated brokers since their governments lack strict rules. In a word, the currency market in Africa is steadily increasing. Other countries, on the other hand, must step up their game to catch up with South Africa.
All countries in Africa are struggling with scams. Although South Africa is ahead of the rest in the development of the industry, Forex scams are still alive in Africa. WikiFX is bringing a new approach to this problem and aiding traders in so many ways. The Forex industry is looking bright in Africa thanks to WikiFX
