The Financial Sector Conduct Authority (FSCA) has approved the request filed by Exness to become an Over The Counter Derivative Provider (ODP).
Why is an ODP license required?
*ODP licenses are required for a broker to be able to be the counterparty to your transactions.
*For a broker to be able to trade against you, they must have an ODP license.
Read further on page 2 here: https://www.fsca.co.za/Documents/FSCA%20Regulatory%20Actions%20Report.pdf
What is applicable currently?
Currently in South Africa, the FSCA authorized brokers are granted FSP licenses but they are not supposed to trade against you, they are meant to act as intermediaries & route your trade to another market maker who takes the opposite sides of your trades.
Many brokers are offering CFDs in South Africa as intermediaries while some have applied for ODP licenses.
Are ODP Brokers Safer?
Yes, brokers with ODP licenses are held to higher standards by the FSCA meaning higher minimum capital requirement & they are more transparent. The FSCA can easily audit them and look at what they are doing to ensure there's no conflict of interest.
Conclusion
For Exness, they can now offer a wider range of CFDs even those on South African stocks. The ODP license for Exness also means they can act as the counterparty to your trade meaning smaller orders get filled faster and at better prices.
Source: https://www.africa-newsroom.com/press/source/exness
