Jayden When choosing a forex broker, it is important to check what regulatory body the forex broker is registered with.
Regulatory information is available at the bottom of each forex trading broker’s website. The regulatory information of their different entities in the main countries is clearly given.
When we are ready to choose a broker we have to check the regulatory information on their website. And we have to compare this information with the information on the regulatory website.
If the company’s information cannot be found on the regulatory website based on the regulatory number written on its website, then the company is operating an illegal foreign exchange business.
If the company’s information can be found on the regulatory website according to the regulatory number written on their website, but the company’s business does not include forex trading. Then it is also illegal to operate.
The regulatory presentations and regulatory websites of major countries are as follows.
(1) The United States
In the United States, a broker must be registered with the CFTC as an FCM and a member of the National Futures Association (NFA), whose role is to protect the interests of trading against fraud, manipulation, and other illegal trading practices. Investors can check a broker’s registration and membership status with the CFTC and the NFA, and check a broker’s history of penalties.
Investors can check through American Futures Association’s phone or website at https://www.nfa.futures.org/basicnet.
(2) The UK
The UK’s regulator, the Financial Conduct Authority (FCA), is set up by the government, which defines its regulatory practices and powers for the industry, and is empowered by the Financial Services and Markets. The FCA sets industry standards and requires regulated financial institutions and firms to comply with these standards. If they do not, the FCA has the power to require the offending institution to pay compensation to its customers. Most consumers know the Financial Services Authority (FSA) to be the overall regulator of the financial industry. However, as of April 3, 2013, the regulator known as the Financial Services Authority (FSA) has undergone changes and has been renamed the Financial Conduct Authority (FCA). FCA website: https://www.fca.org.uk.
(3) Hong Kong, China
The SFC (the Securities and Futures Commission) in Hong Kong, China, is similar in nature to the FCA, but its job description is relatively specific and the forex trading margin business is explicitly included in the scope of the regulation, on the capital and regulation of forex trading brokers and other aspects have been made. Hong Kong Securities and Futures Commission website: https://www.sfc.hk.
(4) Australia
The Australian Securities & Investment Commission (ASIC), the regulatory body in Australia, oversees financial institutions and companies and is responsible for procedures relating to the opening, operation and closure of companies. The measures to protect investors are twofold: (i) all institutions dealing with financial products first need to apply for a licence (AFS); (ii) in March 2004, ASIC also issued stricter standards to protect individual investors, including financial institutions need to obtain the necessary licences, and financial institutions must tell their customers without reservation all the services they offer, how they operate and how they deal with customer complaints, etc. In addition, institutions engaged in teaching forex trading, including online training, are required to be accredited or licensed. However, ASIC does not have specific provisions for forex trading margin business. ASIC website: https://asic.gov.au.
(5) Canada
The situation in Canada is slightly different in that there is no single regulatory body, but rather the Securities Commissions of the major provinces. These securities commissions do not have specific regulations on forex trading margin, but only require those institutions and companies that conduct forex trading training or conduct forex trading business to register locally. In addition, they take a generally cautious approach to forex trading margin. For example, the Ontario SEC’s website warns clients that “forex trading is suitable for those who can tolerate the risk, as it is high risk and potentially fraudulent”. The Ontario Securities and Exchange Commission website: https://www.osc.ca/en.
Use the more popular brokers, you can use them without checking the authenticity of their regulatory information. How to choose a forex broker? Some brokers you have not heard of and few people use, if you intend to use a broker that you have not heard of and that few people use, then you must check the authenticity of the broker’s regulatory information carefully. After all, the safety of your money is the first thing to consider.
