Online broking has a patchy reputation in South Africa for good reason: a perusal of the Financial Sector Conduct Authority (FSCA) wall of shame displays a disproportionately high number of firms purporting to be brokers, many of them offering unrealistically high returns. Some have been sanctioned for offering services not covered by their licences.
Khwezi Trade is all too aware of the bad actors operating in this space and set out to differentiate itself in several key ways.
Earlier this year, Finance Minister Tito Mboweni warned the public against unregulated offshore forex brokers operating in SA. Mboweni pointed out that the illegal online forex trading platforms should not be confused with authorised brokers who use trading platforms to manage and execute market positions.
The FSCA has likewise been issuing virtual daily press releases, alerting the public to shady brokers and others operating without the required licences in SA.
“Many of the overseas brokers entering SA mislead the SA market, use social media to market themselves, and offer deposit bonuses which [brings] an element of casino-type trading to SA,” says Mark Wurr, co-founder of Khwezi Trade.
“Those kinds of tactics may work in the short term but this is not a sustainable business model, nor does it build credibility.
“We are a South African broker, regulated by the FSCA, with local offices where people are free to come and visit us. It helps when you have a visible, physical presence.”
Khwezi has both Category 1 and 2 FSCA licences, allowing it to deliver broking services to its 12 500 clients and provide them each with segregated bank accounts (which avoids pooling or co-mingling of funds as often happens in the crypto space). Khwezi has applied for the Over the Counter Derivatives Provider (ODP) licence, which will enhance capital and transparency requirements and provide greater comfort for clients.
Khwezi Trade has a vintage pedigree in the online broking space: Wurr was previously involved in the set-up and running of GT247, one of the first online brokers in SA (which was subsequently sold to JSE-listed Purple Capital). Fellow co-founder Sean Coetzee has been involved in financial services for the past 34 years.
“I would say one of our unique attractions is that we are a local broker, which means any complaints can be handled by the Financial Services Ombud – though we are proud of the fact that we haven’t had a single complaint referred to the Ombud since inception,” says Wurr.
“Many overseas brokers do not pay tax locally, whereas we do, and we’re proud of that fact.”
Markets and fees
Khwezi Trade allows trading on all the major currency pairs, as well as some minor ones, including commodities, and all major indices. The company made a deliberate decision not to offer derivatives on JSE-listed shares and cryptos. Wurr says the most popular traded instruments are the Nasdaq, gold, oil and the Euro/US dollar currency pair.
In all, close to 40 currency pairs are available, seven commodities and 11 indices.
Spreads are generally tight and fees are as low as 0.5 of a pip (the smallest increment by which a currency pair can change price is 0.1 of a pip).
The fees vary according to market liquidity and are generally wider in illiquid markets, but there are no admin, deposit, withdrawal or other hidden fees. Spreads can also widen when market volatility increases.
New clients can be onboarded within minutes once the usual Know Your Customer documents (ID and proof of address) are uploaded, and deposits can be transferred to the client’s Third Party Fund Administrator account with a local top tier SA bank through electronic funds transfer, avoiding the higher costs that come with offshore credit card transfers.
Withdrawals are processed the same day they are requested and usually reflect in the client’s account within 24 hours depending on the client’s bank.
“This is an exciting time to be trading the markets, and we have gone to considerable effort to train our clients to trade successfully,” says Wurr.
“We offer online video tutorials, and we have clients coming to our offices in Bree Street in Cape Town for personal, hands-on training and support.
“We want to see our clients succeed and we’re prepared to walk the road with them to get them operating with professionalism and discipline,” he adds.
“We’re in this for the long haul. It’s essential to trade with a platform that has a track record, led by management with experience and an understanding of the local market.”
All account managers are South African, and all are FSCA-registered representatives, adds Wurr. “We use the best systems available so no client will be left in the dark.”
You can contact Khwezi Trade here.
Khwezi Trade is a division of Khwezi Financial Services, an authorised financial services provider. FSP 44816.
Brought to you by Khwezi Trade.
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