How did we choose our best stock brokers in South Africa?
The most important factor for us to consider when choosing who are the best South African stock brokers is that they are regulated in South Africa by the Financial Sector Conduct Authority (FSCA). Once the brokers regulation had been confirmed, we then researched and analysed the stock trading service thet provide in great detail and assigned them with an unbiased broker rating based on our findings. During this research, we gave great consideration to what we deem to be amongst the most important factors to consider when choosing the best stock brokers, including:
- Regulation: A stock broker in South Africa should be regulated by the Financial Sector Conduct Authority (FSCA).
- Stock Trading Platforms: The stock broker should have a range of the best stock trading platforms with user friendly interfaces and trading tools for analysing the stock markets. The platforms should be compatible on desktop, web and mobile devices for trading stocks whilst on the move.
- Stock Trading Instruments: The stock broker should offer a large selection of global stocks in different markets for trading online.
- Spreads: The stock brokers spreads should be competitive, the tighter the better.
- Commission: The commission charged for trading stocks should be priced low.
- Fees: Other fees such as those charged for deposits, withdrawals, account inactivity, holding positions overnight, etc, should all be made clear.
- Execution Speeds: Traders buy or sell stock positions should be entered with minimal slippage.
- Liquidity Providers: The stock broker should incorporate top tier liquidity providers (LPs) in order to offer a deep liquidity pool to traders.
- Stock Trading Tools: There should be a good selection of trading tools for analysing the stock markets, planning/managing stock positions, stock trading signals, social trading, etc.
- Educational Materials: The stock broker should offer traders a range of educational resources on various stock trading topics to help them improve their trading skills and knowledge. Training tools can include video tutorials, stock trading guides, webinars, etc.
- Stock Trading Accounts: The stock broker should offer a choice of flexible trading accounts to cater for different levels of investment and experience levels.
- Account Deposit & Withdrawal Options: There should be a choice of convenient account funding methods, including online payment processors for fast and easy account funding.
- Client Support: The online stock brokerage should offer efficient and well-educated client support in order to respond in a prompt and efficient manner to all general and technical questions that traders may have.
South African stock brokers regulation
Stock trading is a popular form of online trading that enables the trader to speculate on the rising or falling prices of a particular company or basket of selected stocks known as Indices. An online stock broker acts as the intermediary between you the trader and the exchange where the stocks are traded. Anyone can open a trading account with an online brokerage and use their online stock trading platform to buy and sell stocks. In recent years, online stock trading has continued to increase in popularity and with so many South African online stock brokers to choose from, it can make it difficult for traders to choose the best stock broker in South Africa for them.
At Trading Brokers, we believe that it is of upmost importance that a stock broker providing services to traders in South Africa is authorised and regulated by the Financial Sector Conduct Authority (FSCA). Using a regulated stock broker can help to give traders the peace of mind that they are using a stock brokerage firm which is subject to strict rules and regulations put in place to help protect investors. It is worth mentioning that there are some non-South African stock brokers that will still solicit clients located within South Africa. There are also South African stock brokers who offer online stock trading services to clients located in some countries outside of the South Africa. In this instance, it would be a considered a wise idea to ensure that the broker has the relevant regulation within the jurisdiction that they are operating from.
Financial Sector Conduct Authority (FSCA)
The Financial Sector Conduct Authority (FSCA) is the market conduct regulator, responsible for the regulation of financial institutions in South Africa that provide financial products and financial services, financial institutions that are licensed in terms of a financial sector law, including banks, insurers, retirement funds and administrators, and market infrastructures.
The FSCA aims to enhance and support the efficiency and integrity of financial markets and to protect financial customers by promoting their fair treatment by financial institutions, as well as providing financial customers with financial education. They aim to ensure there is an efficient and stable financial sector where customers are informed, protected and treated fairly.
Verifying a South African stock brokers regulation
If a stock broker has been licensed by FSCA, they should be provided with a registration number as proof that they are registered. This number will usually be located on the brokers website. You will often find it near the footer where they state who they are regulated by. You should check on the FSCA website to validate the current status of the stock broker registration to ensure that it is valid and up to date. It has been known for some scam brokers to fake regulation, some even going as far to clone another brokers website. When you are looking up the registration number, you should find details of the FSCA regulated brokerage firm including their website, contact details and if they have any cases brought against them.