Forex group Plus500 expands with South African license

Forex group Plus500 expands with South African license

Plus500

Plus500, a UK-based online forex group, reported on Thursday its Australian unit Plus500AU Pty ltd. has been granted a license by the Financial Services Board (FSB) of South Africa to operate as an online trading platform for retail customers to trade contracts for difference (CFDs).

The licence (FSP #47546)  is effective immediately and has no time limitations.

“We are delighted to be granted this new licence in South Africa, which follows the recent additions of licences in New Zealand and Israel,” Asaf Elimelech, CEO of Plus500. “This is in line with our strategy, stated in our preliminary results this week, to add new licenses in order to expand our customer base globally and diversify our geographical revenues,” he added.

Plus500 group companies also hold licenses issued by the relevant authorities in the UK, Australia, Cyprus, New Zealand and Israel, the last two of which it obtained in 2016. Earlier this week, the broker hinted in a notice regarding its latest annual financial metrics it has plans to broaden its footprint and to continue to diversify revenues by adding further new licenses, but provided no details at the time. Whether it will add more markets and licenses to its business is yet to be known.

The broker operates in the European Economic Area (EU member states, plus Norway, Lichtenstein and Iceland), Gibraltar, Australia and certain other jurisdictions across Asia, the Middle East and elsewhere. Its subsidiaries include Plus500UK, Plus500AU, Plus500CY and Plus500IL.

South Africa is turning into a very attractive destination for major forex brokers. Many brokers are seeking to expand there and take advantage of the growing market. 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.

Some brokers that recently acquired FSB licenses include AvaTrade, HotForex, ForexTime (FXTM), and Xtrade.

The FSB is the regulatory body of South Africa’s non-banking financial services industry, which 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

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