The Forex market continues to develop and expand rapidly. Many jurisdictions have already appreciated the potential and prospects of this area, and are trying in every possible way to attract foreign investors to cooperate, establishing reliable and loyal regulation. South Africa has become one such jurisdiction. It is also one of the first countries to allow forex trading in its commercial space.

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South Africa (FSP) Forex license requirements

In order to join the niche of Forex trading in South Africa and become an official and licensed FSP – a company that is a financial type service provider – a firm must necessarily fulfill and comply with certain regulatory requirements. These parameters and norms are put forward by the FSCA – the local regulatory body that controls the activities and supports the efficient functioning of the financial sector in the jurisdiction.

General minimum requirements are established in the following form and list.

1. Establishment of a company within the jurisdiction.

2. The presence of one director, to the position of which only natural persons are allowed. He must be a resident.

3. The presence of one shareholder, which can be both commercial organizations and individuals.

4. Availability of a qualified employee responsible for compliance.

5. An active account in one of the local banking institutions.

6. Availability and provision of professional liability insurance for employees.

7. Mandatory passing of standard examinations. This item is mandatory for key persons and representatives of the company.

8. The presence of an officially registered office.

9. In relation to the size of the initial capital, no mandatory regulatory parameters have been established. The broker must maintain sufficient capital in his corporate account to cover all of his obligations and incur operating expenses. Given R5 million rand (about US$350,000).

10. The presence of employees in the company is a must.

In addition, companies are required to submit financial statements audited by an independent auditor once a year.

Types of forex licenses in South Africa

There are several categories for licensing Forex trading in South Africa.

1. Category I. Organizations included in this category are formally eligible to act as an intermediary and advisor in relation to the relevant financial products.

2. Category II – discretionary intermediary.

3. Category IIA. This permission is in addition to the previous category of permissions. It gives the right to carry out transactions and operations with investment funds that trade in liquid assets, using complex and multi-stage mechanisms. As a rule, such mechanisms are not available to retail investors.

Advantages of forex licenses in South Africa

The following privileges, attractive for the commercial sector, are available to the Forex investor.

1. The jurisdiction has a strategic location. It is an entry point to larger African markets.

2. Incorporation of corporations in South Africa is attractive because the laws, regulations and framework, as well as the general practice of licensing in this region in the field of asset protection, are in line with the laws of more developed and prosperous countries.

3. The niche of financial service range in the jurisdiction is quite developed, which is strongly supported by a reliable regulatory framework. Many local and foreign corporations provide a full range of their services here. Foreign banking institutions are widely represented, nationwide ATM networks are available, and the Internet banking sector is well developed.

4. A strong, diversified manufacturing base that has shown its resilience and potential to compete in the global economy.

5. Highly developed mechanisms and systems based on information and communication technologies. This provides and guarantees free access to advanced technologies, skills and equipment, and also has the rapid spread of telecommunications and IT across the continent.

As we can note, South Africa is quite a profitable and attractive space for Forex trading and cryptocurrency firms. This is the reason for the increased interest in this jurisdiction of foreign capital holders.