Best FOREX Brokers in South Africa for 2021

With the number of FOREX traders continuing to rise, FOREX companies are increasingly focusing on customer retention, thereby securing improved revenues and higher profitability. Traders, mostly concerned about the relatively high risks involved in FOREX trading, will need all the guidance they need to avoid questionable brokers altogether. In what follows, we will first list the best FOREX brokers in South Africa today in a table. This table is based on the findings of a comprehensive study conducted in-house at Arincen, the methodology for which, including how and why we chose these companies specifically, will be discussed in more detail below.

4 Best FOREX Brokers for 2021

اسم الشركة التنظيم الحسابات

FXDD

FCA, FINRA, MFSA
AMF, BaFin, CNMV
 

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ICM Capital

FCA, FINRA, MFSA
AMF, BaFin, CNMV
 

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XTB

FCA, FINRA, MFSA
AMF, BaFin, CNMV
 

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IG

FCA, FINRA, MFSA
AMF, BaFin, CNMV
 

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Estimate

 

We will then outline what traders would need to take into account when choosing a brokerage house. The section is broken up into five sub-sections, each helping traders achieve the peace of mind that Arincen can give.

  1. Trustworthiness.
  2. The Dos and Don’ts of FOREX Brokers.
  3. Technical Aspects of the Website.
  4. Spread Differences, Extra Commissions and Commission-Free Accounts.
  5. Customer Service.

In South Africa, like in other countries, trading FOREX currencies is growing in popularity. Even though it is recommended, FOREX brokers in SA are not required to become authorized by the Financial Sector Conduct Authority (FSCA) to accept residents of the country as customers. The FSCA, the country’s financial sector watchdog, was set up in 2018 to succeed the Financial Services Board (FSB). The latter had previously regulated financial sector affairs in South Africa since 1990. For a historical breakdown, here’s a link to the FSB Webpage on Wikipedia.
How to Verify FSCA Authorization
To confirm if a FOREX broker is, indeed, authorised by the FSCA, the first thing to do is to identify the FSP registration number from the disclosure text at the bottom of the broker’s homepage. For example, here’s the key disclosure text from FXDD’s Website,
“FXDD Malta Limited holds an Investment Service Category 3 License and is regulated by the Malta Financial Services Authority (MFSA) of Notabile Road, Attard, Bkr3000, Malta MFSA IS/48817.”
The second thing to do would be to look up the FSP number on the financial register available on the FSCA’s Website to validate that the broker is currently authorized in SA.

In this introduction, we took a look at the best FOREX brokers in South Africa. We began by identifying the best five FOREX brokers in the country, listing and ranking them by their Arincen trustscore. We then briefly described the regulatory environment governing these companies (more on this later on in the article). Finally, we advised readers how they should go about ensuring that the broker they are looking into is licensed by a tier-1 regulator, such as the UK’s FCA, and, therefore, deemed trustworthy.
What is FOREX and Why Do We Need a Broker?
The FOREX market is the largest financial market in the world at some six trillion dollars daily, only followed by the credit market. The market operates 24 hours a day and five days a week (Monday through Friday), except international holidays. Brokerage firms play a key role in this regard by enabling clients to buy and sell through a trading platform. This could be done either on a personal computer (PC) or more recently by using one’s own smartphone.

How to Pick the Best Broker; Why Arincen

Trustworthiness

At the get-go, it is important to learn more about regulatory bodies and their role in the FOREX market. These are government entities charged with regulating the sector. Their role is two-fold:

  1. Observing and regulating the work environment in the FOREX market; and
    2. Protecting investors and their funds.

FOREX firms must at least obtain one license from a relevant regulatory authority. Otherwise, they should be avoided at all times. In this context, we present the five most important FOREX market regulatory bodies from around the world.

  1. The Financial Conduct Authority (FCA), UK;
    2. The Swiss Financial Market Supervisory Authority (FINMA);
    3. The Australian Securities and Investments Commission (ASIC);
    4. The Financial Markets Authority, New Zealand; and
    5. The National Futures Association (NFA), US.

While FOREX market regulatory bodies exist in almost every country, these are the most important five and also the strictest. To learn more about other regulatory bodies, please visit arincen.com, where you will find a comprehensive global database.

The Dos and Don’ts of Brokerage Brokers

One of the first things a new FOREX trader ought to do is to check the extent to which the FOREX Brokers abides by the rules and regulations governing its operation. Emphasis must be placed on what it can and cannot do.
There are seven things brokerage firms cannot do:

  1. The FOREX brokerage firm cannot recommend a buy or sell;
  2. The FOREX brokerage firm must not provide price or market expectations (rise/fall);
  3. The FOREX firm cannot control your financial dealings (deposit/withdrawal);
  4. The FOREX brokerage firm should not “manage” your portfolio under any circumstance;
  5. The FOREX brokerage firm cannot grant a client a bonus unless there are clear terms guiding it from beforehand;
  6. The brokerage firm must not use bank accounts not under its name; and
  7. FOREX brokerage firms cannot have or offer the service of account managers.

In short, the role of brokerage firms is strictly confined to facilitating buyers and sellers to come together towards an agreed-upon commission. FOREX brokerage firms that violate any of the seven rules aforementioned should be avoided. However, should the trader wish to to receive any of the above-mentioned services, our advice is to seek an expert Website like Arincen, something we will delve into towards the end of this article.

Technical Aspects of the Website

When it comes to sharing sensitive personal information online, such as a credit card, cyber security is paramount. You should, therefore, always look out for SSL certification and two-factor authentication (especially when registering with a new site).
To provide our users with peace of mind, we at Arincen have introduced the “Company Checker”, which is an online tool directly linked to an international Website called Scamadviser. The latter is an independent site that checks the countries in which these FOREX Websites are managed, where the server is located, in addition to other security and informational aspects. It ranks FOREX firms by granting them a score ranging from 0% to 100%, with the best FOREX firms usually receiving a score of 90% and above. Any company that  has achieved a score lower than 85% should thus be avoided. Simultaneously, whenever looking for a new FOREX Broker, users must ensure its Website is fast, modern and user-friendly.

Spread Differential, Extra Commissions and Commission-Free Accounts

A first step in FOREX trading is identifying the spread differential, defined as the difference between the bid (sell) price and the ask (buy) price of a currency pair. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. This is, indeed, the biggest source of profit for the FOREX company. Good companies typically offer a EUR-USD spread of three basis points.
As for commissions, FOREX trading companies can be placed in three categories. The first offer fixed spreads, while the second tender variable spreads, with a third category of companies offering low-cost spreads but that come with a (relatively high) fixed commission.

Customer Service

As timing is key to FOREX trading, you must pick a brokerage firm that is able to provide good customer support around the clock. This most notably includes the company representatives being easy to reach, fast, and polite, which will in turn spare you of having to worry about problems down the road.

Ranking Top 11 FOREX Brokers in South Africa By Category

  1. FXDD 92.15 Best Overall Broker
  2. ICM Capital 91.10 Best Deposit and Withdrawal Broker
  3. XTB 85.55 Best Customer Service Broker
  4. IG 85.45 Best Regulations Broker plus Convenient Platform
  5. Ducascopy 80.1 Best Bank
  6. Saxobank 80.09 Excellent Private Trading Platform
  7. CMC Markets 80.07 More than 9,000 Assets
  8. Think Markets 80.05 Aimed at the Audience of Traders
  9. Forex.com 79.2 First Broker
  10. FXCM 78.65 Best Worldwide Offices
  11. Swissquote 78.3 Sponsor of Manchester United

FXDD Review

FXDD received the highest score in our survey (92.15). One of the first FOREX brokers to offer a credit card in order to allow traders to withdraw their profits, this New York-based company has the UK’s FCA license under its belt. It also has a rich portfolio of assets, offers a relatively low spread, in addition to the MetaTrader4 (MT4) platform. What’s more, it has excellent and fast customer service, and also offers traders a variety of ways to deposit money.
 Year of Establishment : 2002 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.3
💰 Minimum Deposit: $1

ICM Capital Review

ICM Capital is considered the industry leader in deposits and withdrawals, whereby each withdrawal does not take more than five business days. Moreover, the company offers its customers a handy credit card to withdraw their profits, in addition to enabling customers to use various deposit methods. The company, which is licensed by the UK’s FCA, has several branches around the world. Among other things, it has a rich portfolio of assets, especially stocks, offers a low spread, as well as the ability to use MT4.
 Year of Establishment : 2009 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread  is 0.5
💰 Minimum Deposit: $1

XTB Review

What distinguishes XTB is the fact that it offers the best customer experience among all the companies we have surveyed. Indeed, it boasts the fastest response rate from all the companies under investigation. This is especially relevant, since the market is always on-the- go, and so you need to act fast. XTB offers lots of asset classes, as well as the ability to use the MT4 trading platform. Finally, it maintains a relatively low spread, which is suitable for quick deals.
Year of Establishment : 2002 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.1
💰 Minimum Deposit: $1

IG Review

IG is arguably the best broker when it comes to security and trust, boasting as it does licenses from 10 regulatory bodies, including the all-important FCA from the UK. The company is also a bank and is a publicly traded company in London. It is known for offering more than 10,000 asset classes of currencies, commodities, future contracts, ETFs, indices, cryptocurrencies etc. What’s more, it has its own state-of-the-art trading platform and offers a relatively low spread.
Year of Establishment: 1974 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.5
💰 Minimum Deposit: $250

Dukascopy Review

Dukascopy is looked at as one of the best investment banks for financial markets and currencies. Originating in Switzerland, the bank offers its own and unique trading platform able to compete with the market’s best. The bank offers several assets classes, including currencies, commodities, indices etc. Finally, it provides customers with good services and offers a relatively low spread.
    Year of establishment: 2004💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.5
💰 Minimum Deposit: $100

Saxobank Review

Saxobank is considered one of the best investment banks in the area of financial markets and currencies, as it offers the very best trading platform and tools from all the companies we have reviewed. Meanwhile, its spread is very low and, as such, suitable for short-term deals, and it offers a large number of asset classes, including currencies, commodities, indices etc. Finally, its customer service is excellent and very responsive to traders’ needs.
Year of establishment: 1992 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.6
💰 Minimum Deposit: $10,000 $

CMC Markets Review

CMC Markets is thought of as one the best Forex Brokers offering some 9,000 asset classes that encompass currencies, commodities, indices, cryptocurrencies, bonds and stocks. The company offers a relatively low spread, the MT4 platform, and fast customer service. It is most suited for traders looking for diversity in asset classes.
Year of Establishment: 1999 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.64
💰 Minimum Deposit: $1

Think Markets Review

Originally founded in New Zealand in 2010, and moving to Australia within the space of their first two years, Think Markets is a global online brokerage focusing on FOREX and Contract for Differences (CFD) trading. In addition to a range of major and minor currency pairs. Think Markets has an array of CFDs on offer. This includes indices, as well as hard and soft commodities.
Think Markets is regulated by a number of different financial services regulators, which includes the ASIC in Australia and the FCA in the UK. In terms of spread on offer, these are tight, but do vary by account status. The management team at ThinkMarkets has focused on the MT4 series of trading platform products. Deposit options include major credit cards and banking wire transfers.
Year of Establishment: 2010 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.4
💰 Minimum Deposit: $1

Forex.com Review

Forex.com is the oldest brokerage house in the world. A US-based company, it also allows Americans to trade given it has obtained NFA licensing. The company is known for its excellent educational courses. What’s more, it offers traders the ability to use MT4, a relatively low spread, and excellent customer service.
Year of Establishment: 1999 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.8
💰 Minimum Deposit: $100

FXCM Review

FXCM is considered one of the most important FOREX broker companies in the world. With branches spread out all over the world, it is the first company in the world to utilize a marketing plan to take hold of several markets across the globe. It is one of the first companies in the world to offer the MT4 trading platform, a relatively low spread, and good customer service.
Year of Establishment: 1999 💳
💰 Regulation: FCA
💰 Trading Fees Class: Typical EUR/USD Spread is 0.8
💰 Minimum Deposit: $300

Swissquote Review

Swissquote is considered a very unique company, offering traders a state-of-the-art experience. It is noteworthy for being the sponsor for Manchester United FC. The company offers a relatively high spread, the MT4 trading platform, and excellent customer service.
 Year of Establishment: 2002 💳
💰 Regulation: FCA
💰 Trading Fees Class: Low
💰 Minimum Deposit: $500

Review Methodology

The team at Arincen collected more than 120 pieces of data covering in excess of 100 licensed FOREX companies. Data collection was done in three ways:

  1.  Companies’ Websites.
  2.  Other Websites that have ranked FOREX companies.
  3. A survey questionnaire (referred to here as Survey “1”) we had sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its own relative weight. These include licensing, deposits and withdrawals, number of assets etc.

Afterwards we validated the data by:

  1.  Registering with FOREX companies as a secret shopper and/or as Arincen.
  2.  Survey number “2”, in which we asked these companies’ customers for important feedback and past experience.

The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful in ensuring the most accurate assessment possible, including taking into account different languages, as well as the various mobile-app operating systems e.g., Apple, Samsung etc.
To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX Brokers evaluate our own research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%.

Who is Arincen and What Are Our Services?

Put simply, Arincen is a social networking platform that brings together traders and experts to exchange expertise and ideas. Together, we evaluate the best FOREX Brokers in the world whilst offering a compressive suite of services and tools, all in one place, either via a computer or a mobile app. The platform is so rich, one can create his own private portfolio of traders and experts they like and, at the same time, follow their recommendations and investment sentiments.
What’s more, thanks to Arincen, users can keep an eye on market-price developments, as well as the latest news. Users can also benefit from the network’s educational courses on offer, to say nothing of exciting Webinars ¬– all done in a modern and fast-paced work environment. Get all what you need in one place, not less, not more. In short. Arinen: We Meet to Simplify the Trading World.

Conclusion

If anything, the key message to take away from this article is that the FOREX brokerage firm one picks must be legally licensed and well-regulated. On a final note, it is never advisable to deal with FOREX Brokers on your own. It is best this is done with the help of industry experts, which can provide you with all the services FOREX companies cannot. Start trading using Arincen and enjoy all the services, advice and tools it has to offer while making your trading experience profitable!

Frequently Asked Questions

  • What is FOREX?

    The FOREX market is the largest financial market in the world at some six trillion dollars daily, only followed by the credit market. The market operates 24 hours a day and five days a week (Monday through Friday), except international holidays.

  • How do you ensure the trustworthiness of a broker?

    FOREX firms must at least obtain one license from a relevant regulatory authority. Otherwise, they should be avoided at all times. In this context, we present the five most important FOREX market regulatory bodies from around the world.
    1. The Financial Conduct Authority (FCA), UK;
    2. The Swiss Financial Market Supervisory Authority (FINMA);
    3. The Australian Securities and Investments Commission (ASIC);
    4. The Financial Markets Authority, New Zealand; and
    5. The National Futures Association (NFA), US.

  • What do the dos and don’ts of brokerage companies include?

    One of the first things a new FOREX trader ought to do is to check the extent to which the FOREX company abides by the rules and regulations governing its operation. Emphasis must be placed on what it can and cannot do, details on which were outlined at length above.

  • What are the associated costs and commissions associated with FOREX trading?

    A first step in FOREX trading is identifying the spread differential, defined as the difference between the bid (sell) price and the ask (buy) price of a currency pair. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. This is, indeed, the biggest source of profit for the FOREX company. Top Forex brokers typically offer a EUR-USD spread of three basis points.
    As for commissions, FOREX trading companies can be placed in three categories. The first offer fixed spreads, while the second tender variable spreads, with a third category of companies offering low-cost spreads but that come with a (relatively high) fixed commission.

  • How important is good customer service in FOREX trading?

    As timing is key to FOREX trading, you must pick a brokerage firm that is able to provide good customer support around the clock. This most notably includes the company representatives being easy to reach, fast, and polite, which will in turn spare you of having to worry about problems down the road.

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