Against the background of rising regulatory pressure upon binary options (and forex) brokers in Europe and looming bans even for the regulated companies, they are seeking new markets to expand.
It is true that the European countries, the US and Canada are the most affluent, but they have their limitations, especially when it comes to binary options brokers. In US, for example, are allowed only exchange-traded binary options and in Canada there are no regulated binary options brokers. The latter, naturally does not stop the binary options brokers – both unregulated and regulated in other countries – to solicit clients from Canada, but that’s another story.
So where else should the binary options brokers seek their fortune? The obvious answer are countries where the size of the middle class is growing, along with the numbers of the really rich people.
One such example is South Africa. There according to the South Africa Wealth Review 2016 report conducted by MasterCard, the number of Ultra High Net Worth Individuals (UHNWI) has increased 18 percent since 2007 and they are holding US$73 billion in wealth at the end of 2015, up by 40 percent from the US$52 billion they had in 2007.
The CIA World Factbook describes it as “a middle-income emerging market” with “well-developed financial, legal, communications, energy, and transport sectors; and a stock exchange that is Africa’s largest and among the top 20 in the world”. According to the same source, in 2015 the country had a GDP of $723.5 billion and posted a 1.3% growth on an annual basis. South Africa is the most economically developed country in Africa and is the only country from the continent that is part of the G20.
Small wonder then, that the forex and binary options brokers are flocking to the country. Some of the well-established brokers, like FXPro, SaxoBank and IG are already there, while others have just obtained their licenses. Since the beginning of the year, for example, the South African regulator, the Financial Services Board, has granted licenses to Dublin-based forex broker AvaTrade, HotForex, FXTM and Xtrade, to name a few. The forex and binary options broker GrandCapital recently announced it is opening an office in South Africa.
Some of the binary options brokers, like IQ Option, Banc de Binary, anyoption, TopOption are also present in South Africa and are doing quite well.
One of them, IQ Option, for example, has recently revealed some data about its activities in South Africa. According to it, the average amount deposited per trade in 2016 in general is $220. Those using the web-based trading platform have deposited an average of $283 and those who are using the mobile trading apps have also deposited an average of around $200.
The most used trading platform is the Android mobile application – with 48%, followed by the web-based version and the standalone terminal with 37%. The iOS app was used by 15% of IQ Option’s clients.
This data is but a small portion of the entire value of the binary options and forex market of South Africa and it certainly is not comparable in volume with giants like the US and Japan, but holds a lot of potential. With both forex and binary options trading allowed and well-regulated by the FSB and with relatively few limitations, perhaps South Africa is indeed the next promised land for the brokers.