Dually-licensed forex brokerage XM has applied for a financial service provider license with the Financial Services Board (FSB) of South Africa, according to data published on the regulator’s website. The broker’s application was submitted on 29 August, 2016,and is being evaluated by the regulator.
XM group companies already hold licenses issued by the Cyprus Securities and Exchange Commission (CySEC) and the Australian Securities and Investments Commission (ASIC). Group companies operate in some 200 countries globally and are registered with the relevant authorities in several European countries, including the UK, Germany, Spain, Italy, Finland, and France.
XM, formerly known as XEMarkets, is a trading brand of Trading Point Holdings. The broker offers trading in more than 50 forex pairs and in contracts for difference (CFDs) on commodities, equity indices, metals and energies via the web-based, desktop and mobile versions of the MetaTrader 4 (MT4) platform.
XM is one of many retail forex brokers that are turning their heads towards South Africa as a market with a great potential for growth and development. So far, four forex brokers have obtained license from the FSB, all of which since the beginning of 2016. These are AvaTrade, HotForex, ForexTime (FXTM), and Xtrade.
The FSB is the regulatory body of South Africa’s non-banking financial services industry, which, in addition to forex entities, includes retirement funds, short-term and long-term insurance, companies, funeral insurance, schemes, collective investment schemes (unit trusts and stock market) and financial advisors and brokers.
While the South African economic growth is not at its best rate, the forex market is expected to grow due to the increasing population. It has showed significant growth in the past years. The turnover of over-the-counter (OTC) forex trading in South Africa amounted to $21 billion in April 2016, according to the latest tri-annual survey by the Bank for International Settlements (BIS). The figure is flat compared to three years earlier, but has grown significantly from $5 billion in 1995, $10 billion in 2001 and 2004, and $14 billion in 2007 and 2013.
The South African rand (ZAR) has been heavily fluctuating in relation to the US dollar (USD), but rather on the rise since mid-January when it fell possibly to a historic low of $0.05923. The constant change provides for great trading opporotunities.