The following table shows a list of the most important and popular Regulatory Authorities across the globe. The regulators’ homepage and page for bringing a complaint against a Forex broker have been added for your convenience.
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Forex Regulatory Authorities
The Forex and investment industry are overseen by strict regulatory authorities in local jurisdictions across the globe.
In each country there are governmental and public regulatory bodies and agencies set up to supervise all activities in the Forex and financial industry. These supervisory agencies act as watchdogs to insure compliance with local legislation and to issue financial licenses to businesses which comply with these regulations. Forex regulations are in place to ensure fair, legal and ethical business practices. All investment banks, Forex brokers and signal sellers must comply with the rules and regulations laid down by the regulatory authority in their country or jurisdiction. Among the regulators’ standards which have to be met Forex companies must register and license their business in the country where their operations are based. The regulatory authorities have the right to subject licensed brokers to multiple audits, evaluations and reviews to insure that they meet industry standards. There may also be a minimum capital requirement where Forex brokers must have sufficient funds at their disposal to be able to execute and complete Forex contracts for clients and to be able to return clients’ funds to them immediately in the case of bankruptcy.
The Forex regulations enforced by regulatory bodies vary from jurisdiction to jurisdiction and country to country. For example in the EU the Mifid Regulation states that a license from any EU member state applies to all the European Union countries. This means that if you have acquired a Forex license in one EU country you may operate across the whole of Europe. For this reason companies choose to apply for licenses in EU countries with the least restrictions such as CySEC in Cyprus.
The general aim of regulatory authorities overseeing the Forex and investment industry is to achieve the following objectives:
- By retaining all the private information about business owners and managers the regulatory authority aims to supervise and monitor the company, directors and owners to prevent any illegal or unethical business practices. This protects all those involved.
- The regulatory authorities aim to maintain a stable financial market across the globe. By acting as a body which can be addressed with concerns the regulatory authorities gives those in the market confidence and contributes to the protection and enhancement of the global financial system’s stability.
- When choosing a Forex broker the first thing to determine is how credible the broker is and whether they can be trusted. With Forex brokers supervised by a regulatory authority investors can be more confident about the credibility of the broker and feel protected.
- The regulatory authorities provide a level of protection for investors as they can be trusted to restrict/sanction or ban the actions and activities of Forex companies if necessary and to safeguard investors.
When choosing a Forex broker the first thing to determine is how credible the broker is and whether they can be trusted. With Forex brokers supervised by a regulatory authority investors can be more confident about the credibility of the broker and feel protected.