Forex broker regulatory agencies

Forex brokers are subject to a number of rules that are established by the regulatory bodies that govern them. Among other rules, brokers are required to warn traders about the risks involved in opening a trading account. Regulators can also limit the leverage that is allowed and require brokers to separate client funds in segregated accounts.

The protection and the solutions that are offered to traders in the event of a dispute vary between countries and regulators. It is therefore strongly recommended that traders and foreign exchange dealers open an account with a broker that is regulated in their country. Forex is an unregulated OTC market, the regulatory authorities therefore allow traders to have legal recourse in the event of a dispute with a broker.

It is also necessary that you be able to distinguish between a licensed broker and a broker that is regulated by an agency. A licensed broker has obtained authorization to offer its services in a country, while the regulated broker must submit to the rules established by the regulator.

Before you open a trading account, it is essential that you verify that the broker is licensed and regulated by a credible government agency. For example, in England you would visit the FSA's website; in France, the ACP Banque de France) website. Each regulatory agency monitors the practices of brokerage firms, ensuring that all rules are strictly followed. It is also best to choose a broker that has a branch in your country.

 

France: AMF (Financial Market Authority)

AMF

The AMF is an independent public body which establishes the rules of conduct and the obligations that must be met by professionals who are authorized to provide investment services. Its purpose is to protect investors and to ensure the proper functioning of financial instrument markets.
(http://www.amf-france.org/)

 

Europe: MiFID (Markets in Financial Instruments Directive)

MiFID

The MiFID is a European Union directive that was established in Cyprus on November 1, 2007. The MiFID provides a harmonized regulatory regime for investment services in the EEA (European Economic Area). The directive's main objectives are to increase both competition as well as consumer protection in terms of investment services.
(http://ec.europa.eu/internal_market/securities/isd/)

 

Europe: ESMA (European Securities and Markets Authority)

ESMA

The ESMA is an independent European body which aims to preserve the European Union's financial stability by ensuring the integrity, transparency and orderly efficiency of the financial markets as well as investor protection. In particular, the ESMA fosters convergence between securities regulators and the financial industry by working with other European surveillance authorities.
(http://www.esma.europa.eu)

 

England: FSA (Financial Services Authority)

FSA

The FSA is an independent non-governmental body that regulates the financial services industry in the UK. Financial companies that are authorized to operate in the European Economic Area (EEA) can offer certain products or services in another EEA country if they have permission that entitles them to do so. These companies must be regulated in their home countries and they must uphold strict standards that have been adopted in the EEA. (http://www.fsa.gov.uk)

 

Cyprus: CySEC (Cyprus Securities and Exchange Commission)

CySEC

Pursuant to article 5 of the Cyprus Securities and Exchange Commission Act of 2001, the CySEC was established as a public regulatory body. The CySEC has several responsibilities such as monitoring and overseeing the stock market's operations, including the transactions that occur within it. The CySEC grants operating licenses to investment firms and, whenever necessary, it imposes administrative sanctions and disciplinary action against brokers.
(http://www.cysec.gov.cy/default_en.aspx)

 

United States: NFA (National Futures Association) and the CFTC

NFA

The NFA is a self-regulatory organization overseeing the U.S. futures markets. The NFA's mission is to provide innovative regulatory programs and services that ensure the integrity of the futures industry, that protect market participants and that help its members meet their regulatory responsibilities. The NFA's activities are overseen by the Commodity Futures Trading Commission (CFTC), the government agency in charge of regulating the U.S. futures markets.
(http://www.cftc.gov - http://www.nfa.futures.org)

 

Switzerland: The FINMA and the ARIF

ARIF

The ARIF (Romande Association of Financial Intermediaries) is a private non-profit association that was founded in Geneva on March 15, 1999 in order to fight against the laundering of assets. In 2009, the FINMA (the Federal Authority for Financial Market Supervision) acknowledged the ARIF's self-regulatory standards for the independent management of fortunes. (http://www.arif.ch)

Since 2010, Swiss brokers are required to have a banking license issued by the Finma in order to exercise their forex brokerage services.

 


Germany: BaFin (Bundesanstalt Für Finanzdienstleistungsaufsicht)

BaFin

Ever since its inception in 2002, the BaFin supervises banks, financial service providers, insurance companies and the trading of securities. The BaFin is an independent public-law company subject to legal and technical surveillance by the Federal Ministry of Finance. Its main objective is to ensure the proper functioning, the stability and the integrity of the German financial system.
(http://www.bafin.de)

 

Australia: ASIC (Australian Securities and Investment Commission)

ASIC

The ASIC is an independent government body which aims to ensure the transparency and the reliability of Australia's financial markets. The ASIC regulates Australian companies, financial markets and financial services organizations. As a regulator of financial services, the ASIC monitors financial services companies to ensure that they operate efficiently, honestly and fairly.
(http://www.asic.gov.au/)


 

British Virgin Islands: BVI FSC

FSC BVI

The BVI FSC (British Virgin Islands Financial Services Commission) regulates all financial services activities conducted in the British Virgin Islands. Its mandate includes banking and trusts, investment firms, bankruptcy services, insurance companies, the registration of companies and intellectual property. It also protects the public against content which is illegal and/or unauthorized in the BVI and it facilitates the provision of legal and regulatory assistance under BVI law. (http://www.bvifsc.vg)

 

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