First forex trading platform owned by SA with an ODP license

Forex derivative platforms are popular tools that allow South Africans to invest and access diverse financial markets. They have also unfortunately been identified as a space where scammers and fraudsters ply their trade.


Origin: Supplied. Head office of Khwezi Financial Services in Cape Town.

The Financial Services Conduct Authority (FSCA) is cracking down on these platforms by creating a regulatory framework for overseeing entities that operate in the over-the-counter (OTC) derivatives market.

Khwezi Financial Services has officially become an FSCA-licensed South African forex platform and can now offer OTC products on forex, indices and commodities for trading.

“This is the kind of progress that we should celebrate together as a nation, because being FSCA approved is a great achievement that many forex platforms (local and global) fail to achieve,” a doorman said. -word of the company.

Khwezi Financial Services provides a safe, secure and accessible environment for trading.

An ethical and transparent trading platform

There are many unethical forex trading platforms in South Africa, but FSCA regulation is meant to clean up the industry. Its objective is to regulate the OTC derivatives markets in South Africa through a new regulatory framework to reduce risk and create a safer environment for those who participate in the market. This aligns South Africa with G20 obligations to regulate the OTC derivatives market.

The regulation requires brokers to perform increased due diligence on their clients, as trading in speculative financial products is high risk. It will also apply strict capital adequacy measures and various other requirements.

It is the broker’s responsibility to submit an end-of-day trade report to a trade repository. These reports provide FSCA transparency, ensuring that all forex trading clients are treated fairly and that brokers act responsibly.

Monty Barnard, COO of Kwezi Trade, said: “We are delighted to be identified by the FSCA as one of the leading and competent forex trading platforms in South Africa. It shows that we are not a blind organization. We are here to stay and will continue to provide consistent and dedicated service to our customers.”

Almost 10 years of preparation

Khwezi Trade, a division of Khwezi Financial Services, is a licensed financial services provider, established in 2013. It is a proudly South African regulated forex broker with a Category 1 and Category 2 license Financial Advisory and Intermediary Services (FAIS) and has now become the first South African-owned forex trading platform to have an over-the-counter derivatives provider (ODP) license.

Although some financial service providers are licensed under the Financial Advice and Intermediary Services Act 2002 (FAIS Act), this is not enough; they must also be licensed as ODPs in order to trade as contracts for difference (CFD) providers.

The FSCA instituted this rule because of the substantial risk to the public in cases where entities and individuals act as issuers of derivatives without adequate financial reserves, risk management systems or knowledge. The settlement is an ongoing effort to weed out FSPs who are willing to act outside the law.

ODP license requirements

Khwezi Trade provides South African traders with a safe trading environment using a combination of state-of-the-art online, desktop and mobile trading platforms. The company exemplifies exceptional compliance standards as a forex broker with FSCA authorized representatives and a management team that holds over 60 years of experience in the forex and CFD industry.

The ODP license requires that Khwezi:
* Meet operational capital requirements.
* Maintain and hold sufficient capital and reserves in the Republic of South Africa commensurate with the risks involved in doing business as a derivatives provider.
* Meet the requirements of honesty, integrity and competence.
* Demonstrate the ability to maintain operational capability to fulfill legislated responsibilities.
* Possess the financial solidity of the company and the members of its supervisory body.
* Respond to risk management and internal controls.
* Have an effective compliance function in place with systems and controls in place to promote and monitor its regulatory obligations.
* Have an adequate business continuity plan with good record keeping.

Khwezi Trade Co-Founder and Managing Director Mark Wurr says, “Having been involved in online Forex/CFD trading for over 20 years, I welcome the tighter regulation the license brings. This will certainly help weed out the unethical vendors that seem to have crept into the market over the years.”

Khwezi Trade offers Rand-based forex and CFD trading accounts, providing protection of client funds through separate third-party administrative bank accounts. Unlike foreign brokers, clients’ money does not go overseas, but remains within the borders of South Africa, and this is in accordance with the laws of the South African Reserve Bank.

The FSCA reminds the industry to take extra care when dealing with any platform. One level of assurance is to check whether the supplier is registered with the FSCA as an FSP or ODP. All ODPs must be FSCA approved.

Penny D. Jackson