FOREX REGULATION ACCROSS AFRICA -- The Complete Guide
Extreme Popularity In Forex Trading in Africa
Partly, this extreme growth was caused by the fact that ESMA enforced new restriction legislation on the highest leverage that EU traders may use (this caused FX agents to Concentrate on other large markets, like Africa)
An average of more than 5.1 trillion is traded every day in the foreign exchange market. Though worldwide, there are significant forex trading centres which include London, Tokyo, Paris, Sydney, New York, Zurich, Singapore, and Hong Kong. A Forex trading day starts in Australia and ends at New York. The market stays open for 24 hours each day and five and a half days a week.
There are certain regulations in countries, continents which oversee the trading of Forex. In a few countries, FX trading is limited and prohibited while in the others, it's completely supported. In this informative article, our focus is on Africa as we will be looking at Forex regulation across the continent.
Forex trading is a really competitive activity, also in Africa, it is not any different. The market has undergone speedy growth throughout the previous two decades as more Africans are being educated on what Forex entails.
Significantly, the last decade has seen the Forex market go from nearly undetected to becoming one of the most dynamic industries in this content. This may be attributed to the arrival of cellular devices and other technology.
There are approximately 1.3 million Forex traders in Africa. South Africa and Nigeria lead the way as both countries constitute a large proportion of the total figure. This has brought international Forex brokers like IQ Option, IC Markets, XM Forex Trading, and Olymp Trade. With this vast amount of forex traders, it is expected that government financial regulatory bodies will probably be considering monitoring trading activities in respective countries.
A lot of African nations are Forex-friendly, but there are slight limitations from the government. Forex could be traded at Nigeria, South Africa, Egypt, Kenya, Namibia, Ivory Coast, and Several other African countries. Whereas Forex trading cannot be said to be legalized in such countries, it also doesn't violate the law. Before a Forex broker may offer Forex trading services to a country's citizen, it's chiefly compulsory to obtain a trading license.
Forex-Prohibited African Nations
Currently, a complete Forex ban is not placed on any nation in Africa, unlike planet nations like North Korea and Israel. As stated earlier, there are slight limitations from the government in some states. These limitations do not prohibit the transaction of Forex but are imposed to stop fraudulent and scam actions.
Some of those restrictions are on the utmost trading amount and the maximum amount you can have in your Forex account. These are similar to Forex constraints imposed in nations like China and Russia. Furthermore, Forex Currency trading with non-licensed Forex brokers is illegal in certain African countries. Likewise, you may just exchange Forex for yourself rather than for anybody else (identification is compulsory for most Forex agents ).
Forex trading is usually not welcomed in states regulated with strict sharia laws. As a result, countries such as Algeria, Benin, Burkina Faso, Egypt, etc., may not be the best to participate in Forex trading. Let's think about how Forex trading has been regulated in some major African countries:
In South Africa, various regulatory trading principles are set up to minimize Forex trading dangers. These regulations are enforced by the South African Financial Sector Conduct Authority (FSCA), formerly known as the Financial Services Board (FSB). The FSCA is the body responsible for monitoring and controlling all financial activities in the country. It is by far the most vigorous Forex market regulation in Africa. The FSCA regulatory policies are based on what is obtainable from regulatory bodies overseas. Notably, all OTC derivative brokers must report all transactions in an attempt to arrange CFDs. Throughout the FSCA, Forex agents can associate with each other without resulting in battle. In accordance with topforexbrokers.co.za, the FSCA permit comprises some immense benefits such as FX agents governed by the FSCA treat their client in good faith and that they help them with financial education and financial literacy. Not to mention if anything goes south, a South African dealer who is trading with FSCA regulated broker may go to FSCA if they think they've been cheated by their agent or mistreated.