The financial markets nowadays feature hundreds, if not thousands, of forex brokers who are trying to attract more beginner traders by providing outrageous offers and benefits. Traders who have been trading for a while already have it ingrained into them that they should never deal with unregulated brokers.
The reason for this is extremely simple; unregulated brokers are not bound by law to ensure client fund security. In addition to this, these brokers are not overseen to ensure that they fulfil their financial obligations or provide a transparent, fair, and safe trading environment. The new over-the counter (OTC) regulation has been implemented by the local regulator, the FSCA, to combat bad players in the industry. Khwezi Trade, a division of Khwezi Financial Services (Pty) Ltd, is the first South African owned forex platform to be authorised and approved by the FSCA, receiving the OTC licence.
There are lists of blacklisted brokers that got away with client funds because of the false front that they put up, drawing in unsuspecting investors and traders of all experience levels. Unfortunately, these brokers have given deposit and trading bonuses a bad name, and because of this most traders associate the presence of bonuses with the signs that they may be dealing with a scam broker.
However, this is not always true and there are still brokers that can offer bonuses while ensuring that client funds are kept safe in segregated accounts which are separate from the broker’s funds.
Pro Tip: Comprehensive list of FSCA Regulated Forex Brokers
What is client segregation of funds?
A segregated account is a separate account for each trader. Funding your trading account with a broker that offers segregated bank accounts has several advantages. Primarily, the separate account provides traders with a measure of protection if their brokerage goes out of business.
Neither the brokerage nor the trader is left in the dark as to where their money is going or how it is being utilized. A segregated account is required by many countries to guarantee that customer money are not utilized for operational reasons by brokerages. Confusion is avoided, and both parties are protected by using a separate account.
Only brokers with a category 2 Financial Advisory and Intermediary Services (FAIS) licence can offer segregated third-party funds administration accounts (TPFA) to their clients. These TPFA accounts are held with a top-tier South African bank.
What are Deposit bonuses and what purpose do they serve?
When it comes to enticing new clients, the deposit bonus is one of the most popular promotional incentives. Traders get a set sum of money or a percentage of their original investment in return for funding their trading accounts. This is the basic principle.
Most of the time, new customers are only eligible for this sort of promotion. Some Forex deposit bonus brokers, however, give this advantage to their consumers whenever they deposit to their trading account.
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How the Khwezi Trade offer makes it stand out from the rest
Khwezi Trade is a proudly South African Forex commodity and indices broker that offers traders the best of both worlds; a guarantee that their funds are safeguarded and kept in segregated accounts, and the reward that they will receive a 30% deposit bonus on their first deposit.
Khwezi Trade is regulated and overseen by the Financial Sector Conduct Authority (FSCA) in South Africa, with the registration number FSP 44816. The FSCA is one of the strictest market regulators in the world and to keep their license, Khwezi Trade is required to ensure that all funds are kept in accounts with top-tier banks in South Africa.
Also Read: How Much Money Do I Need To Start Trading Forex