The answer you’ve all been waiting for – Are binary options legal in South Africa?
Currently, binary options trading is legal in South Africa, meaning that there are no current regulations put in place regarding the matter. This is simply because there is no law stating that the practice is illegal. In fact, there are no laws at all referring to online investment either. Therefore, if you’re looking to partake in binary options trading within South Africa, all you need to do is register with a recommended binary options broker
, deposit real money and then withdraw any that has been won. Plus, with the knowledge that this is currently legal, there’s no need to worry about any potential consequences!
Remember what we said about there being no regulations surrounding the matter? Well, this does have its consequences, and in this case it means that companies situated in South Africa aren’t allowed to offer any financial trading services. There aren’t really any genuine
South Africa-based binary options brokers. Having said this, there are numerous companies located outside of the country that have access to the South African market, and they are legally allowed to offer trading options to South African clients. You should always take extra care when looking for a binary options broker, but there are
ways of remaining safe within the process. Moving forward, there has been no indication of regulations being put in place in the future, so if you’re interested in binary options traders, fulfil your needs fast in case the government criminalises the practice.What should I consider when trading binary options?
As already discussed, it isn’t difficult to begin trading binary options, but in order to make the most efficient investment, there are several factors that should always be kept in consideration.
The first? Volatility.
Any investment made will be subject to volatility of the assets being traded, as well as the financial markets overall. Quick trades are a huge advantage of binary options, meaning that investors often find that the volatility of the practice is often reduced. By considering this, you will have a better judgement and will gain understanding of how and when you should pass on a trade that might be more risky.
Secondly, always attempt to try before you buy
. A lot of brokers within the industry have free demo accounts, proving as very beneficial to traders that want to learn about binary options trading before they launch into it on a bigger scale. Whilst the start-up process is easy, getting the hang of trading binary options can be challenging, so signing up for a demo account will test and develop your skills and see whether you have enough understanding to begin investing some of your own capital. Who knows? If done correctly, you could find yourself rising in Africa as the new economic giant
!How can I stay safe during binary options trading?
As there are no legitimate brokers within South Africa, you should take extra precaution when looking for one. As the popularity of binary brokers within the country is on the increase, you can come across those who are fraudulent and only work to scam their clients. To ensure maximum safety, you should aim to choose offshore brokers who are securely regulated by the country that they’re located in, as they’re forced to comply with strict rules and regulations in order to protect trader’s funds. Even when using an offshore broker, you can find some that do not have any kind of license, indicating that they shouldn’t be trusted so take extra care.
In order to find the best broker for you, conduct plenty of research online to ensure that they are completely legitimate. Even simple reviews can inform you about which brokers to avoid and which ones can be completely trusted. The bottom line is – find a binary options broker who is licensed in jurisdictions that are known to be reputable. This way you can guarantee that you can put your trust in them.How is the governing body involved? The FSB (Financial Services Board)
is South Africa’s government’s financial regulatory agency. They’re responsible for analysing operations from financial services that aren’t related to banking. In addition to this, they also regulate the biggest stock exchange in Africa, known as the Johannesburg Stock Exchange. With all of this in mind, though, they aren’t able to effectively supervise binary options trading due to the lack of regulations in place. The FSB supervises numerous processes within South Africa, including capital markets, financial services credit agents and so many more.
All of this information sounds promising, but it’ll only become relevant if this governing body becomes involved. So, to ensure optimal safety during binary options trading, regulations need to be through the FSB. If involved, they’ll be able to enforce regulation, ensure all operations are licensed, and check that all brokers are complying with the laws. What should I know about licensing for binary options trading?
Due to the lack of involvement from the FSB, they aren’t able to license any South African binary options brokers, making any brokers that claim to be licensed within the country a fraud. Unfortunately, unofficial binary options brokers are able to easily lie about being licensed, but there are ways to double check their legitimacy before you do business with them. As an investor, you should find brokers who are officially licensed by regulatory bodies such as CySEC
(Cyprus Security and Exchange Commission) within Cyprus, or the FCA within the UK. With this information alone, you should recognise that to ensure your broker is 100 percent legitimate, they need to be operating offshore due to the lack of regulation in South Africa.What does the future hold for binary options in South Africa?
Whilst it is completely ambiguous as to whether binary options will become regulated in South Africa in the future, this does mean that all South Africans are free to trade all binary options without persecution. However, on the negative side, this allows more brokers to operate without a license, putting clients at a large risk. With so much danger lurking, there really is a need for the FSB to become activity involved with online financial betting, as without their involvement, fraudulent activities within the South African industry will continue rising. Plus, with investors’ protection, the FSB will have the opportunity to tax binary options brokers. Therefore, with regulations in place, we could boost the confidence of clients to ensure that their investments are safe and secure, as well as place Africa on the radar as a thriving digital innovation hub
, helping their struggling economy to repair.