An FSP number is not permission to sell you a CFD
An FSP licence under the FAIS Act authorises advice and intermediary services. Writing contracts for difference as principal requires separate ODP authorisation under the Financial Markets Act. Four brokers in our database publish the first and not the second, including one we rate Neutral.
A South African FSP number is not permission to sell you a contract for difference. An FSP licence under the FAIS Act authorises advice and intermediary services. Issuing or writing CFDs as principal requires separate authorisation as an OTC Derivative Provider under the Financial Markets Act. Four brokers in our database publish the first and not the second, and one of them is a household name we rate Neutral.
This is the most technical finding on this site and also the most consequential, because the number those firms display is genuine. It checks out on the register. It just does not cover what they are doing.
Two different permissions, one number on the footer
South Africa runs two separate authorisation regimes, and a retail trader is unlikely to know there is more than one.
The Financial Advisory and Intermediary Services Act produces an FSP licence. It authorises a firm to give advice about financial products and to act as an intermediary, meaning it can introduce you to a product, arrange a transaction, or handle the paperwork between you and whoever actually provides it. Thousands of firms hold one, from financial planners to insurance brokers. It is a real licence with real obligations, and it says nothing about issuing derivatives.
The Financial Markets Act produces an OTC Derivative Provider authorisation. An ODP is a firm that originates, issues, sells or makes a market in over-the-counter derivatives, which includes contracts for difference, as principal and as a regular feature of its business.
That phrase, as principal, is the whole distinction. When you open a CFD position with a retail forex broker, in almost every case you are not buying anything on an exchange. The broker writes the contract and is the other side of your trade. It is the counterparty, not the intermediary. That activity sits under the Financial Markets Act and needs an ODP authorisation, and an FSP licence does not confer one.
What the law attaches to getting this wrong
Two provisions bite, and they carry different maximums. Both are worth stating precisely, because the figure that circulates online is usually only one of them.
- Financial Markets Act, section 109. A person who issues CFDs as principal and as a regular feature of business without an ODP licence is liable on conviction to a fine not exceeding R10 million or imprisonment not exceeding five years.
- Financial Sector Regulation Act, section 111(1). Unauthorised persons face a fine not exceeding R15 million or imprisonment not exceeding ten years, or both.
These are maximums available to a court on conviction, not penalties that have been imposed on the firms named below. No prosecution of any broker in our database is known to us, and nothing here should be read as an allegation that one is underway.
The three in our database
Each of these has published an FSCA number without an ODP authorisation anywhere we could find on its own site. Note the fourth row: this is not a pattern confined to firms we rate badly. We read the FSCA’s OTC Derivative Provider register in full on 24 September 2026. It holds 95 entries and only 47 of them carry the status Approved; the rest read Applied, Application Withdrawn, Withdrawn, Declined or an exemption outcome. None of the first three below appears on it in any status, under any spelling.
| Broker | Our verdict | What it publishes |
|---|---|---|
| CIFMarkets | Scam, 2.7 | FSCA FSP 54857, quoted where a Financial Markets Act ODP authorisation is required. Its own terms name a different firm as the product supplier: Intrepot Investments Ltd, a Comoros company on MISA licence BFX2025155. |
| MaxifyFX | Scam, 2.4 | An FSP number where an ODP licence is required, alongside a Trustpilot rating removed from an 81% five-star profile. |
| NXG Markets | Scam, 1.8 | Published FSCA 51192 alongside US FinCEN money-services registration 31000305990765 until 2026. Both claims have since been removed from its site, leaving only a Comoros MISA licence. Neither of the two was a derivatives authorisation. |
| AvaTrade | Neutral, 6.0 | FSCA South Africa FSP 45984 and nothing further. A large, long-established broker holding genuine licences in several other jurisdictions, including ASIC AFSL 406684 and CySEC 347/17. |
None of these is scored on this finding alone. Each carries its own separate problems, and the reviews set them out. But regulation and fund safety together carry 55% of the weight in our scoring method, and a licence that does not authorise the activity scores as an absent one on the first pillar.
The counter-example
Exness does it the other way. It names its ODP authorisation explicitly and identifies which entity in the group holds it, which is what correct disclosure looks like and proof that the distinction is well understood inside the industry. We rate Exness High Risk for an unrelated reason, the offshore entity most retail clients actually contract with, and it still handles this particular disclosure properly. A firm that wanted to tell you would.
Why this particular gap is worth a trader’s attention
Quoting an FSP number for a CFD business is effective precisely because it survives the check most people run. You take the number, you search the FSCA register, the firm appears, the status reads active. Everything matches. The check passes and tells you nothing, because you were never shown the field that mattered.
It also has consequences beyond the paperwork. The ODP regime is where the obligations a derivatives counterparty ought to carry actually live: capital adequacy proportionate to the book it writes, reporting of trades to a licensed trade repository, and conduct standards aimed at the specific risks of writing derivatives against retail clients. A firm outside that regime carries none of them, whatever its FSP licence obliges it to do when giving advice.
And if the relationship goes wrong, the complaint routes differ. An FSP licence puts a firm within reach of the FAIS Ombud for advice and intermediary conduct. It does not make the FSCA the supervisor of a derivatives book the firm was never authorised to write.
How to check it in about two minutes
- Find the number on the broker’s own site, usually in the footer or on a page called regulation or legal. Note whether it is described as an FSP number or an ODP authorisation. Most sites say FSP, or simply “FSCA regulated” with a number.
- Search the FSCA regulated entities register at the FSCA regulated entities search at fsca.co.za. Confirm the entity name matches the one in the client agreement, not just the brand.
- Read the categories and products on the entry. An FSP licence lists the product categories the firm may advise on or intermediate. This is the field that is doing the work, and the field the broker is relying on you not to open.
- Check the ODP list separately. ODP authorisations are published separately from the FSP register. A firm writing CFDs to South African clients as principal should appear there. If it does not, and it is the counterparty to your trades, the gap is real.
- Ask the broker directly, in writing. “Are you authorised as an OTC Derivative Provider under the Financial Markets Act, and what is the authorisation number?” A firm that holds one will answer in a sentence. The replies that arrive instead are informative in their own way.
The same reading habit applies to every register, not only South Africa’s, and the general version of it is in our guide to checking a broker's licence. You can also see which regulator sits behind each broker we have examined on our regulator pages.
A note on what this does not mean
An FSP licence is not fake, and a firm holding one is not thereby a fraud. Plenty of legitimate South African businesses hold an FSP licence and operate entirely within it, because advice and intermediation are what they do. Some brokers hold both an FSP licence and an ODP authorisation, which is the correct arrangement for a firm that both advises and writes contracts.
The finding here is narrower and specific: quoting the advice licence as though it covered writing derivatives, to an audience that has no way to know the difference.
Frequently asked questions
What is an ODP licence in South Africa?
An OTC Derivative Provider authorisation under the Financial Markets Act. It permits a firm to originate, issue, sell or make a market in over-the-counter derivatives, including contracts for difference, as principal and as a regular feature of business. It is separate from an FSP licence and is published separately by the FSCA.
Is an FSP number enough for a forex broker?
Not if the broker is the counterparty to your trades, which almost all retail CFD brokers are. An FSP licence under the FAIS Act covers advice and intermediary services. Writing the contract itself requires ODP authorisation under the Financial Markets Act. A broker doing both should be able to show both.
What is the penalty for operating without an ODP licence?
Section 109 of the Financial Markets Act provides for a fine up to R10 million or imprisonment up to five years on conviction. Section 111(1) of the Financial Sector Regulation Act provides for a fine up to R15 million or imprisonment up to ten years, or both. These are maximums available to a court, not penalties imposed on any particular firm.
How do I check whether my broker has ODP authorisation?
Search the FSCA regulated entities register at fsca.co.za for the legal entity named in your client agreement, and read the categories on the entry rather than only confirming the firm appears. ODP authorisations are listed separately from FSP licences, so a firm present on the FSP register may still be absent from the ODP list.
Does this affect traders outside South Africa?
The licence question does, even where the trader does not. A firm that misrepresents what one licence covers is telling you something about how it handles disclosure generally, and the same pattern appears in other jurisdictions: a company registration presented as a licence, or a money-services registration presented as regulatory approval. The country changes and the technique does not.
Sources
Financial Markets Act, section 109, and Financial Sector Regulation Act, section 111(1), for the penalties stated above, as set out in DLA Piper, The fate of unlicensed trading platforms. Checked 12 September 2026.
The FAIS Act and Financial Markets Act distinction between advice and intermediary services and issuing OTC derivatives as principal, from the same analysis. Checked 12 September 2026.
Financial Sector Conduct Authority, regulated entities register, fsca.co.za. Checked 12 September 2026, when the FSCA website was displaying a maintenance notice, so the register itself could not be opened on the day. The statutory position above does not depend on it.
Licence numbers and published claims taken from each broker’s own website and recorded, with check dates, in the individual reviews linked above.