Hi I want to know why regulation of the broker is important and how we can understand if a broker is regulated???
We are be operating in the Forex business with a lot of money.
Are you just going to give your hard earned cash to anybody who
just pops up on the 'net saying " Give me your money I will look
after it for you." Without having some regulatory body such as the
NFA or FSA in your corner at least trying to scare these scam
merchants a little bit?
When you search on your broker you need to know which country
they are from, has that country some form of regulatory body?
Brokers in the US need to be registered with the NFA.
Brokers in the UK need to be regulated by the FSA.
Fxemil, Regulation provides a level of protection for customers trading forex.
Firms that are regulated, are subject to regular audits by their regulatory agencies as well as independent auditing firms to make sure that:
- minimum capital requirements are met,
- corporate financials are in order,
- proper disclosures are being made to clients and potential clients,
- accurate reporting and statements are is provided to clients,
- client funds are segregated from operating funds,
- promotional materials are within guidlelines
- customer communication/solicitation is being monitored by compliance
- and basically other things that prevent âforex fraudâ
Some regulatory agencies have different requirements from others, but the list above definitely applies to the NFA in the US.
If a firm is un-regulated, no assurances can be made as to the above list.
for examples on the NFA complianceâŚgo to the link below (NFA website) and check under the âcomplianceâ section. Youâll understand why regulation is important.
National Futures Association | About NFA
you can also read CFTCâs (also US) Forex Fraud Prevention section
Foreign Currency Trading