Several people in South Africa have shown a keen desire to trade in the financial market and profit from it, but most of them are not aware, how to go about it. With binary options, financial trading is now easy, even for those who are just starting. People are now quite excited as Binary Options enables them to achieve high payouts that too in a short period.
The roots of Binary Options can be traced back to 2009 when it provided an easy and profitable way of trading even to beginners. With Binary options, the trader does not have to be an expert to begin trading, but it does need practice and knowledge to be successful in the long-run. But the question which keeps coming is ‘Are Binary Options Legal in South Africa?’. This article attempts to explain the legal status of Binary Options in South Africa.
Binary Options Legal Position
South Africa is counted among those countries of the world, which has not made any move till now to regulate Binary Options. Due to such lack of any rules or regulations, Binary Options is legal in the country. There is no law which will forbid the citizens to open their account at brokers which are operating from another country. So, if you wish to trade here, do not worry about being persecuted for online trading.
What are the Existing Regulations?
In the present times, FSB or the Financial Services Board is given the responsibility of regulating different issues that are related to general finance and investing but excludes banking activities. FSB was established in 1991 and has now an additional body known as Financial Advisory and Intermediary Services. The main objective of FAIS is to prevent any kind of money laundering.
Binary Options Brokers
Any Africa based brokerage firm is not allowed to offer binary options trading to clients who are based in South Africa. In such a situation, how to traders located in South Africa get access to the Binary Options market? The good news is that are many reputed Binary Options Brokers available in South Africa who can help traders. But it needs to be noted that though some of such brokers are regulated, most of such brokers are not regulated.
There are a few non-regulated brokers like GO Options who are known worldwide, though it is not regulated in the country. There are options for traders like Binomo or IQ Option which are regulated by the specific foreign regulatory bodies.
What Traders Need to Know
Traders should understand that to be successful in binary options trading, there is a requirement of knowledge, experience, and skill set. Binary Options is all about an accurate estimate of price movements of different assets. Novice traders should ideally begin with assets that are not much volatile with changes in the market. There are several brokerage sites, which offer a demo account for the traders where they can gain experience. Such a demo account helps the trader to get a feel of the market. Virtual money is used instead of real money as the trader learns the nuances of online trading.
Since there are no laws that regulate such trading, there are no brokers also which are licensed in South Africa. As there is no law, there are no licenses issued by any regulatory or financial body, which helps to ensure that the broker works in compliance with the law. This is one of the reasons why traders are recommended to be careful when they are deciding to trade, especially with binary options traders. However, the non-existence of regulation does not mean that these are all scams, but traders should be cautious and take every step after considering different factors.
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