Over time, the need for retail FX trading within Africa is increasing at a rapid pace. For instance, from 2013 to 2016, the volume at which forex trading in South Africa took place increased by a whopping $21 billion from $14 billion, as per the Bank of International Settlements.
Primarily, a stockbroker is an individual who serves as a middleman between two investors. His primary job is to research the trends in the financial market and purchase or sell stocks for his clients. It has been noted that The Republic of South Africa (RSA) has become one of the most recognized stock markets globally. Moreover, it is also considered to be the most developed one on the continent.
How to Start a Forex Brokerage Firm?
If you are wondering how to become a stockbroker in South Africa, the requirements tend to vary from one company to another. However, one should have preliminary knowledge of the basic investment principles as a prerequisite. Below are some of the few steps that you can follow to start a forex brokerage firm in South Africa.
To trade in the South African stock market, you are required to have an in-depth knowledge of the financial market of the region. A stockbroker is also an equity trader, portfolio manager, investment analyst as they are solely responsible to advise their clients regarding the best possible investment options after critically analyzing the market.
Further, stockbrokers in RSA are also responsible and accountable for the choices they make on behalf of their clients. As a stockbroker, you must be well-versed with the implications of trading in compliance with the Financial Intelligence Centre Act (FICA). These regulations were introduced by the local authoritative bodies to combat money laundering.
Assess and weigh your qualification. If you have a sound grasp of the operational mechanism of South African forex trading, you can work legally as a stockbroker. However, the nature of the business is rather complex, thereby a strong financial experience and academic background are the desirable attributes for any candidate. While a college degree is not essential, but ideally one should have some qualification in economics, finance, or business studies.
Acquire a license. As per the South African laws, one needs to have a license to represent a client. To get your license as a stockbroker, one needs to pass a regulatory exam known as the Registered Persons Exam (RPE) provided by the South African Institute of Financial Markets (SAIFM).
The RPE comprises five levels, where a person needs to get at least an 80 percent pass rate. Moreover, to start practicing, one needs to clear at least the first three levels.
Look for an opportunity where a South African employer. He/she will offer some training in stock brokerage. The JSE offers courses in the stock exchange for amateur stockbrokers, that can give you an edge, and then you can learn on the job practically. You can refer to different portals online offering a platform to hunt for jobs.
So, what are you waiting for then? It is easier now than before to start your own forex brokerage firm. Do your research to make an informed decision. We wish you luck!