Cape Town, January, 11, 2022
Khwezi Financial Services stands out above the rest as the first South African owned forex trading platform with an ODP license. There are many unethical forex trading platforms in South Africa, but the ODP regulation stands to clean up the industry.
In terms of the Financial Markets Act Regulations, the FSCA have authorized Khwezi Financial Services as an Over-the-Counter Derivatives Provider on the 9th of November 2021. Khwezi Financial Services is regulated to offer forex, indices, and commodities for trading.
The FSCA has created a regulatory and a legislative framework for the supervision of entities who wish to operate in the Over-the-Counter Derivative Providers (ODP) market, as an issuer or product provider.
Exert from FSCA press release issue on 15 April 2020.
“FSCA warns public against Forex trading platforms promising income streams during COVIS-19 lockdown.
Although some of these Financial Service Providers (FSPs) are licensed under Financial Advisory and Intermediary Services Act, 2002 (FAIS Act), this is not enough, they also need to be licensed as ODP (OTC Derivatives Providers) in order to trade CFDs.”
Exert from FSCA press release issue on 8 September 2020.
“The FSCA has taken steps because of the substantial risk to the public in instances where entities and individuals act as issuers of derivative products (derivative providers) without adequate financial reserves, risk management systems and knowledge and as an on-going effort to remove FSPs who are prepared to act outside the law from the financial industry.
The FSCA has created a regulatory and a legislative framework for the supervision of entities who wish to operate in the Over-the-Counter Derivative Providers (ODP) market, as an issuer or product provider.
The FSCA reminds the industry that:
All ODPs need to be licensed by the FSCA.
As forex derivative platforms are a very popular space for scammers and fraudsters to ply their trade, additional care should be taken when dealing with any platform. One level of assurance is checking to see whether the provider is registered with the FSCA as an FSP or ODP.”
What is the purpose of the OTC regulation?
The purpose of this new legislation is to regulate over-the-counter derivative markets in South Africa. The goal of the new regulatory framework for OTC derivates is to reduce the risk by creating a safer environment for those taking part in the market. This aligns South Africa to meet the G20 obligations in terms of regulation of the OTC derivatives market.
The ODP regulation requires brokers to perform enhanced due diligence on their clients, as trading speculative financial products is high risk. Another important point to note is that it enforces strict capital adequacy measures. It also puts the onus on the broker to submit end-of-day transaction reports to a central repository. The transaction details report provides the FSCA with transparency and ensures that all forex trading clients are treated fairly and that the broker is operating responsibly.
If you are a South African trader looking for a local broker with local regulation, local offices, local support, and a local bank, Khwezi Trade is worth your consideration.
CEO, Thomas Coetzee says “We are extremely proud to be one of the first recipients of the ODP license, as a wholly owned South African company. Our experience with the FSCA analysts throughout the application period has been challenging but has been handled by the FSCA very well and in a professional manner. We are very happy that the FSCA has identified Khwezi Financial Services as one of the leaders in South Africa as we have always done our best to service our clients well, provide a consistent and stable platform and always operates within the regulatory framework.”
Khwezi Trade, a division of Khwezi Financial Services (Pty) Ltd an authorized financial services provider (44816) established in 2013 is a proudly South African regulated forex broker with a category 1 and category 2 FAIS license
Khwezi Trade provides South African traders with a safe trading environment with both state-of-the-art online desktop and mobile trading platforms.
Khwezi Trade exemplifies exceptional compliance standards as a forex broker with FSCA authorized representatives and a management team which constitutes over 60 years of experience in the forex and CFD industry.
Khwezi Trade offer Rand-based forex and CFD trading accounts, providing safeguarding of client funds through segregated third-party administrative bank accounts. Unlike foreign brokers, your trading money does not go offshore, but remains within the borders of South Africa and thereby complying with the South African Reserve Bank laws.
Why Khwezi Financial Services received their ODP license?
Khwezi fulfils the criteria for authorization as they comply with the following.
- Meet the Operational Capital Requirements
- Khwezi maintains and holds sufficient capital and reserves proportional in the Republic of South Africa proportional to the risks relating to the business as derivative provider.
- Meet the Fit and Proper Requirements
- Khwezi complies with the fit and proper requirements of honesty, integrity, and competency.
- Khwezi has shown the ability to maintain the operational ability to fulfil the responsibilities imposed by the Act.
- Financial Soundness of the business and its members of the controlling body.
- Risk management and internal controls are met
- Khwezi has established an effective compliance function with systems and controls in place to promote and monitor with its regulatory obligations.
- Adequate business continuity plan with proper record keeping
To view ODP licensed entities in South Africa follow the link: https://www.fsca.co.za/MagicScripts/mgrqispi.dll?APPNAME=Web&PRGNAME=Search_ODP
For further information visit our website: www.khwezitrade.co.za
Do not hesitate to contact our head office on 021-300 3117 or email info@khwezifs.co.za.
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