Quite right, @LaughingCharlie
As you pointed out, forex is regulated by government bodies in major financial centers around the world.
For traders who live in those major trading centers, it makes sense to focus on brokers regulated in their home country. Traders who don’t live in one of those countries should consider brokers regulated in major financial centers appropriate for their region.
Where do you live, @Barrigan?
Focusing on brokers that are regulated by reputable government authorities in your region can go a long way to addressing your concerns. Key advantages of trading with a well-regulated broker is that there are:
- minimum financial and trading standards they must meet,
- ongoing monitoring by the regulators to ensure compliance,
- a framework for handling complaints from customers, and
- the power to enforce actions against regulated brokers for violations.
That is not accurate. You are free to choose well-regulated forex brokers.
For example, the CFTC and NFA set the requirements a broker must meet in order to offer forex trading to US residents. Though not an exhaustive list, this membership application will give you an idea of some of those requirements: Compliance Requirements for Retail Foreign Exchange Dealer (RFED) Applicants | NFA
- In the US, forex is regulated by the CFTC and NFA, and brokers are required to maintain net capital of $20 million.
- In the UK, forex trading is regulated by the FCA and funds are protected for up to £50,000 per client by the FSCS.
- In Canada, forex trading is regulated by IIROC and funds are protected for up to $1 million per client by the CIPF.