The financial market is an enticing prospect for many traders worldwide, who are attracted to the possibility of achieving high payouts. With the emergence of the Binary Options industry, a renewed popularity has been noticed, especially when traders in South Africa are concerned.
Binary Options has its roots back in 2008 and has been providing a simple yet profitable way to trade, even for novice traders. You can find more information on Binary Options on https://www.tradeforexinsa.co.za/binary-options/binary-options-in-south-africa.html.
However, one question seems to be at the forefront of all the trader’s queries and questions: Is Binary Options Legal in South Africa? This article aims to clarify the legal status of binary options in South Africa.
The Legal position of binary Options trading
Binary Options trading, overall, is legal in many countries of the world. In South Africa’s case, however, there are no financial bodies entrusted to regulate brokers or develops their policies. Currently, there are no binary options brokers worldwide who directly offer trading instruments or trading services to South Africa based traders.
Existing Regulations in South Africa
Currently the Financial Services Board is entrusted for regulating all issues related to investing and general finance, excluding banking activities. Established back in 1991, the FSB has expanded and added an additional regulatory body known as FAIS or Financial Advisory and Intermediary Services. The main goal of the FAIS is to prevent money laundering.
Licensed Binary Options Brokers
Africa based brokerage firms are prevented from offering binary options trading services to South Africa based clients. However, there are other ways how South African traders can access the Binary Options market. There are several, reputed foreign brokers who have access to the South African market. However, it is to be noted that while some of them are regulated, most of them are not.
There are very few non regulated brokers such as GO Options which have a favourable reputation worldwide, while not being regulated in South Africa. Other options include IQ Options and 24Option, both of which are regulated by foreign regulatory bodies.
Many of these brokers such as IQ Option are registered under CySec or the Cyprus Securities and Exchange Commission. Since CySec is compliant with all existing European laws, it stands to reason that the brokers under it would be reliable and regulated. Since such brokers have to comply with European guidelines, they offer a safe and secure option for South African citizens wanting to start binary options trading. The recent changes introduced by CySec to increase the safety of trader’s funds further increases the transparency of the regulations.
The popularity of Binary Options in South Africa has increased many folds in the past few years. People are now aware of its potential to achieve high payouts in a considerably small period of time. With its fixed expiry and payout times, Binary Options trading appeal to a larger section of the general trading community.
It should be noted that a certain degree of experience, knowledge and skill set is required for traders to be successful at binary options trading. Since a large part of Binary Options involves the accurate prediction of price movements of an asset, novice traders should first start with assets that are not greatly volatile to market changes. Fortunately, many brokerage sites offer their traders a demo account. Novice traders can use this demo account to get the feel of the market, using virtual money instead of real money before they enter the real market.