Legal South African Forex Brokers and Trading Platforms 2017Over the past years, Forex trading has quickly gained popularity in South Africa, despite various rules imposed on traders. But, just like other financial opportunities found online, like South African legal online casinos, for example, South African authorities haven’t tackled this issue with severe measures, but only ones that allow Forex trading as long as certain protective steps in regards to capital outflow are respected.

Thus, the South African government has no regulations regarding the legality or illegality of Forex Trading platforms, but only a system of exchange control that oversees the cash outflow from the country. This system is overseen by the South African Reserve Bank (SARB) and is conducted through the banks and financial institutions.

From 2010 onwards, South Africans are allowed to send money out of the country and to off-shore accounts, which is what most Forex accounts are, but with a specific limit. The current limit per person, as prescribed by the government, is 10 million Rands, which at current USD rates is somewhere about $788,694. This is the only legal restriction South African citizens face.

List of Forex Brokers accepting traders from South Africa:

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Deposit: $5
Leverage: 888:1

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Deposit: $100
Leverage: 1:294

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Deposit: $50
Leverage: 1:1000

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Deposit: $50
Leverage: 400:1

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Deposit: $100
Leverage: 200:1

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Deposit: $250
Leverage: 400:1

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In addition to this allowance, SA traders may also apply for what is called a “single discretionary allowance”, which has a max limit of 1 million Rands and can be used for Forex trading as well. Thus, the total limit is 11 million, when both options are combined. However, before you use both, you should note that any off-shore investment funds (10 million) should be cleared with the revenue service (SARS), i.e. there is plenty of paperwork to be done, like filing Tax Clearance Certificates, and so on.

That’s why most SA traders use the single discretionary allowance (SDA) to fund their Forex account, which only has to be pre-approved by your bank. However, even with the SDA, you still have to take care, as you have to state exactly what you plan to use your money for, unless you want to risk being fined. There’s also capital inflow limits to pay attention to, for when you want to send money back home. For more info about bringing money into the country, you can check with the SARB.

Frequently Asked Questions

  1. What currency pairs is the Rand part of?

    The Rand is a very popular currency among Forex exchanges and can be found as part of many currency pairs. The most common are the GBP/ZAR and the USD/ZAR pairs as the two currencies are more easily compared and analyzed against the Rand, as opposed to other options. This is why most South African traders are interested in Forex trading, as they have plenty of resources regarding the USD and GBP, but also know more about their local economy than traders outside South Africa.

  2. Why is the Rand popular among Forex traders?

    Just like the Australian and Honk Kong dollars, the reason why the Rand is a popular choice is because of the fluctuations and variance it offers. South Africa’s economy is part of a group of emerging economies, where the possibility for good returns on official currencies is higher than with other, more established markets. In South Africa, the Rand is stabilized against other currencies to some extent by the Reserve bank, which gives it gives it some free floating space that can be exploited for profits, as it fluctuates more wildly against other, more stable currencies.

  3. Is Forex trading taxable in South Africa?

    Yes, it is. Any profits you make with Forex trading are taxable, just like your regular income, which means you have to file a Personal Income Tax form. The tax rate can range from 18% to 40% and it depends on the profits you’ve made. You can also list the profits on your ITR12 as foreign income. If you’re not sure how to file your taxes, you should consult a tax professional.

  4. Will I be charged any Trading Fees?

    Well, most reputed trading platforms don’t charge any fees for allowing you to trade. However, there are still other fees to keep in mind. For example, it is a common practice to charge small fees for keeping your trading account open, but also withdrawal fees, which depend on the payment method you want to use.

  5. What currency pairs are the best?

    It depends on your personal preference. The most profitable ones are pairs of a strong and more tightly controlled currency like the USD, EUR, or GBP, against a more fluctuating one like the Mexican Peso or the Australian Dollar. However, in terms of popularity, major currency pairs like GBP/USD, JPY/GBP, or EUR/USD, are the most common choices in Forex trading platforms.

  6. How much money am I allowed to transfer back to South Africa?

    South Africa is part of a Common Monetary Area that incorporates Namibia, Lesotho, and Swaziland. To protect this area, the Reserve Bank prohibits any South African citizen to import or export Rands or other bank notes from the common area that exceed more than ZAR 25,000 in value, per person.

    Thus, to transfer money back, you have to have a foreign currency account and keep your earnings as a foreign currency, which isn’t subject to exchange control rules. However, make sure you don’t use your allowance as travel allowance, as any money not spent in travel allowances may not be deposited back into this account.

  7. Can I Increase my Single discretionary Allowance?

    No. That is, not by yourself. The only workaround to bypass the 1 Million per rand rule is to use your spouse’s or partner’s single discretionary allowance to send more funds, although you have to check with the trading platform if this is possible. You can also use your children’s allowance, which is set to ZAR 200,000. However, make sure you consult a professional before you do so.

  8. Can I send more than 10 million Rands off-shore?

    Yes, there are exceptions to the off-shore investment limits. However, to be able to increase your investment allowance, you would have to file an application to the Financial Surveillance Department of the SARB through your bank, along with a Tax Clearance Certificate, and wait for approval before you are allowed to send more money out.

  9. What Forex Leverage Limits are available in South Africa?

    South Africa doesn’t regulate Forex brokers, so they are not imposed any limits on the amount of leverage they can offer. Thus, the leverage you can get will vary from one Forex brokerage to the next, with most offering a standard of 400:1 or 500:1. However, you should also note that the leverage will vary according to your account history, so don’t expect to sign up and get a very high leverage immediately.

  10. What’s the minimal legal age for Forex trading in South Africa?

    As said, there are no specific regulations for Forex trading, but there are ones related to finances. Thus, the legal age is 18, as that’s the age accepted by most Forex brokers and the age that makes you eligible for off-shore money transfers without consent from your parents.

Who Regulates Forex trading in South Africa?

The official regulatory body is South Africa’s Financial Services Board (FSB), which is the financial regulatory agency assigned to overseeing the non-banking financial sector in the country. The agency is independent, much like UK’s FCA or the US NFA, and is a member of the International Organization of Securities Commission. The FSB also regulates South Africa’s biggest stock exchange in Johannesburg.

However, while there are Forex trading brokers that are licensed by the FSB to be found, they are still very rare. Thus, most trading is done via off-shore platforms, simply because they offer better conditions, like tighter spreads, more payment options, and even account bonuses.

South African Off-Shore Forex Legal Forex Trading Platforms

Most South African traders go for trading platforms licensed by other licensing authorities, the most prominent of which are the European regulatory agencies. The most trusted, and thus popular, agencies, are as follows:

CySec – The Cyprus Securities and Exchange Commission is probably the most common licensing agency that’s behind some of the largest legal Forex trading platforms. They also enjoy a great reputation, since Cyprus, as a member of the EU, has to adhere to EU financial regulation policies.

FCA – UK’s Financial Conduct Authority is an independent agency that regulates financial bodies that provide consumer services throughout the UK. The agency is the successor to the FSA and its licenses are a likewise solid proof of trustworthiness.

ASIC – the Australian Securities and Investments Commission is the regulatory body of Australia that oversees Forex and binary option trading. Licenses from the ASIC are not as common, though they are just as reliable.