FSB South Africa

FSB-South-Africa
1.
4.8 stars from 530 ratings

Broker Verified

Blackstone Futures is a truly local FSCA regulated broker with offices in Rosebank Johannesburg. Enjoy same-day withdrawals.
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
2.
4.7 stars from 503 ratings

Broker Verified

Markets.com providers a unique trading experience for forex and stock traders alike. They are a global multi-regulated CFD broker regulated in SA.
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
3.
4.6 stars from 301 ratings

Broker Verified

With 107 currency pairs, Exness provides leading coverage. Exness has a maximum leverage of 1:2000 and a low minimum deposit.
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

FSB, aka Financial Services Board, was South Africa’s financial regulatory body established in 1990.

The agency was disbanded in 2018 with the introduction of FSCA.

In this guide, we’ll take a look at FSB South Africa and how it functioned.

A little background

The FSB was founded in 1991 to create an independent agency to oversee and regulate the non-banking financial services industry. However, the FSB’s role was eventually broadened and increased by several further statutes.

The Financial Advisory and Intermediary Services Act (FAIS) increased the FSB’s authority to encompass aspects of market behaviour in the banking industry in September 2004.

FSB’s responsibilities

Business man pointing the text: Regulation

Broker
Rating
Regulated
Bonus
Min. Deposit
Max. Leverage
1.
Blackstone Futures Broker Review
4.8 stars from 530 ratings

Broker Verified

FSCA

up to 30%

USD 100

1:400

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
2.
Markets.com Broker Review
4.7 stars from 503 ratings

Broker Verified

FCA, ASIC, CySEC, FSCA, BVIFSC

up to 50%

USD 100

1:300

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
3.
Exness Broker Review
4.6 stars from 301 ratings

Broker Verified

SFSA, FSC (BVI), CBCS, FSCA, FSC (Mauritius)

up to 10%

USD 10

1:2000

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
4.
Tickmill Broker Review
4.5 stars from 333 ratings

Broker Verified

CySEC, FCA, FSA, FSCA, LFSA

N/A

USD 100

1:500

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

FSB performed various functions. These include;

  • Overviewing financial markets in South Africa
  • Regulating collective investment schemes
  • Regulations of financial services providers

Aside from that, it was assigned responsibility for ensuring that regulated firms followed the appropriate legislation and capital adequacy standards to promote financial soundness and safeguard South African residents’ interests.

Through the enforcement committee, it was given enforcement powers to deal with violations. The committee has the authority to impose any number of fines, compensation orders, or cost orders. Such directives were enforceable in the same way that a Supreme Court of South Africa ruling was.

It also included a consumer complaints service and a separate appeals board. Anybody who was dissatisfied with a decision made by the FSB or its executive officers might appeal.

The appeals board was an independent tribunal with members who were neither FSB employees nor active financial services sector players. The Minister of Finance appointed the chairman and members of the committee.

Structure of FSB South Africa

The FSB’s activities were overseen by its board of directors, consisting of numerous committees. The board also chose the FSB executive officer, who was in charge of the organisation’s day-to-day operations.

Aside from those committees, the FSB additionally funded the ‘Office of the FAIS Ombud’ and the ‘Office of the PFA’ using approved budgets.

These committees were part of the same regulatory framework as the FSB. Still, they operated independently of it because their main mission was to resolve complaints filed by financial services consumers in accordance with their individual Acts.

The Registrar of Non-banking Financial Institutions was also the Executive Officer. In addition, financial Advisory and Intermediary Services, Retirement Funds and Friendly Societies, Insurance and Investment Institutions, and Retirement Funds and Friendly Societies were overseen by four Deputy Executive Officers.

Goodbye FSB, hello FSCA

The Financial Sector Regulation Act (FSR Act) was signed into law on August 21, 2017.

The FSR Act established a prudential regulator, the Prudential Authority (PA), a market conduct regulator, the Financial Sector Conduct Authority, and other reforms (FSCA).

Banks, insurers, cooperative financial institutions, financial conglomerates, and some market infrastructures are all regulated by the PA in South Africa.

FSB South Africa was officially dissolved on April 1, 2018, and FSCA came to the scene.

Financial institutions that provide financial products and services and financial institutions that are licensed under a financial sector law, such as banks, insurers, retirement funds, and administrators, and market infrastructures, have been given the mandate of market conduct regulator by the FSCA.

What’s FSCA?

Let’s talk a little about FSB’s successor FSCA.

The FSCA’s mission is to improve the efficiency and integrity of financial markets, encourage fair consumer treatment by financial institutions, offer financial education and promote financial literacy, and aid in the maintenance of financial stability.

The FSR Act expands the FSCA’s competence to encompass regulation of financial goods and services not regulated by the FSB, such as banking, credit, and foreign currency buying and selling.

It also necessitates a transition away from the FSB’s conventional compliance-driven methodology and toward one that is proactive, preventative, risk-based, and outcomes-oriented.

Importantly, the FSR Act incorporates financial inclusion and financial sector modernisation as part of its broader goals.

The FSR Act, which was passed in 2018, listed six areas of priority for the FSCA. These are some of them:

  • Creating a new organisation
  • A financial industry that is more inclusive and reformed
  • A strong regulatory structure ensures that customers are treated fairly.
  • Financial clients who are well-informed
  • Increasing the efficiency and integrity of the financial markets in South Africa
  • Understanding disruptive technology and new business models

How does FSB regulate forex brokers?

Before FSCA, FSB regulated forex trading in South Africa. Forex was allowed as long as it was done through a licensed broker and did not violate the South African Reserve Bank’s international money laundering legislation.

The entity was in charge of all monetary outflows from the country. Profits have to be declared to the South African Revenue Service by traders (SARS).

Before computing the overall taxable profit, all trading expenses were subtracted. As a result, traders were expected to properly record and document all aspects of their transactions.

It’s also worth noting that earnings have to be disclosed in rands, the South African currency. According to the FSB website, it was unlawful to acquire currency from businesses without adequate authorisation, and it was also criminal to speculate against the rand.

A Tax Clearance Certificate was required to fund an account with a balance of R1 million or more.

An application to the financial monitoring department was required before transferring R10 million or more overseas.

Structural failure of FSB

The FSB was unable to avoid a series of major scandals and disasters in the pension funds business in South Africa. It was also accused of bias and charging excessively for legal and administrative services.

Some of its encounters with financial service providers have been characterised as harsh and odd, drawing an objection from both the press and the financial services sector.

These instances were the main reasons why the FSB was disbanded. However, its successor FSCA is still facing these difficulties, and there have been instances of mishandling on FSCA’s part.

Bottom line

FSB South Africa was the first financial regulatory agency in the country. It performed well for several years. However, one cannot deny its structural weaknesses, which eventually led to its demise.

Relevant Posts

Leave a Reply

Markets.com Logo

Get up to $1,000 Bonus

Markets.com Logo

Get up to $1,000 Bonus

South Africa's Top 4 Brokers

Minimum
Deposit

USD100

Welcome Bonus

30%

Minimum
Deposit

USD100

Welcome Bonus

50%

Minimum
Deposit

USD10

Welcome Bonus

10%

Minimum
Deposit

USD100

Welcome Bonus

N/A

South Africa's Top 4 Brokers

Blackstone Futures Logo

Minimum Deposit

USD100

Max. Leverage

1:400

Welcome Bonus

up to 30%

Markets.com Logo

Minimum Deposit

USD100

Max. Leverage

1:300

Welcome Bonus

up to 50%

Exness Logo

Minimum Deposit

USD10

Max. Leverage

1:2000

Welcome Bonus

up to 10%

Tickmill Logo

Minimum Deposit

USD100

Max. Leverage

1:500

Welcome Bonus

N/A