If you are a forex trader that has decided to work with a forex broker who will execute your trades, it is important that you keep in mind a few criteria to work with the right kind of broker. In the first place, you should examine carefully the regulatory status of the broker that you want to work with. Trading with a regulated forex broker is important if you want to have the least amount of risk when you are trading and you want to keep your capital investment safe. The forex broker that the trader chooses can be an individual broker, an association of individuals, or a brokerage company.
Top Recommended Regulated Forex Brokers
|Broker||Min Deposit||Spread||Leverage||Regulation||Open Account|
|$100||From 1,5 Pips||1:200||FCA UK (#186171), CySEC (#259/14)||Visit Broker|
|$1||From 0 Pips||3000:1||CySEC, IFSC||Visit Broker|
|$5||From 1 Pips||888:1||ASIC, CySEC, FCA (UK), BaFin, CNMV||Visit Broker|
|$200||Starting 0 Pips||500:1||ASIC Australia||Visit Broker|
|$300||floating, from 0 pips||500:1||FCA UK reference number 579202||Visit Broker|
|$5||From 0.2 Pips||500:1||FSA (Saint Vincent and the Grenadines), FCA UK (#679306)||Visit Broker|
|$250||as low as 0.1 pips||up to 400:1||ASIC Australia and FCA UK||Visit Broker|
|€100||The Spread can be as low as 0.01%” (0.01% = spread for EUR/USD)||1:294||ASIC, CySEC, FCA (UK)||Visit Broker|
|$200||From 3 Pips||400:1||NFA, CySec||Visit Broker|
|$100||Starting From 0.9 pips||400:1||MIFID, FSB & ASIC||Visit Broker|
|$1||From 0 Pips||2000:1||CySEC, FSP, BaFin, CRFIN||Visit Broker|
Why You Must Trade With Regulated Forex Brokers
Starting to trade in forex these days is much easier than it was in the past. A trader can trade from anywhere in the world, even in the comfort of his/her own home. All you need to have is a computer, a reliable internet connection and help from a reliable forex broker who is regulated and offers a convenient and easy-to-use trading platform.
Regulation – What is it
Many major financial institutions around the globe comply with financial regulations. This compliance sets them apart as having a genuine purpose in running the organization and their willingness to follow rules and standards. In the case of a forex broker, it is necessary that they sign a code of conduct to run their businesses in different jurisdictions. The code of conduct is constituted by the local financial regulator. The code of conduct supplies a set of regulatory guidelines that the forex broker is expected to follow. It specifies as to how they should run their business. The guidelines also provide a framework on what behavioral and financial ethics the forex brokers are expected to follow.
On the financial front, regulated forex brokers will be expected to submit copies of financial reports to the regulatory authorities at specified intervals. Examples are operational accounts of the company that will be subject to audits by qualified personnel. Regulated forex brokers are also expected to work with an adequate amount of capital reserve and liquidity to ensure reliable and uninterrupted operations on their part.
The best regulated forex brokers will see to it that they comply with all the operational procedures and standards set by the authorities. Any failures on the part of the brokers to follow the guidelines that are specified are punishable and penalties will be charged. In the worst cases of non-compliance with rules, the broker’s regulatory status may be lost or their operations may be closed forcefully. In the interest of furthering their businesses, it is best for the forex brokers to comply with regulations.
Importance of Working with Regulated Forex Brokers
The forex broker is the connection between the seller and the purchaser of the currencies that are exchanged in the market. It is, therefore, important that the brokers that the traders want to work with have appropriately planned businesses and a good standing reputation.
There are many reasons why forex traders should seek to work with regulated forex brokers. First and foremost, working with a regulated forex broker means that it provides a safety net for their investments. The trader is assured of the fact that their trading operations are being overseen by an official body. Any point of contention between the broker and the trader is resolved by the higher body. The guidelines that are put in place by the regulatory authorities control the different functional areas of the brokers’ operations. These are mainly in the areas of monitoring the brokers’ accounts and use of the clients’ data. They are designed to combat fraud on the part of the broker and also set benchmarks for customer service and support that is to be provided by the brokers.
The single most important aspect of regulation for the broker is dealing with the requirement of holding the clients’ funds in segregated accounts. This arrangement is in place to protect the users’ funds if the broker runs into financial trouble. This money may not be used by the brokers to settle their debts as it is ‘protected’. If this kind of a scenario happens, this money is to be returned to the client.
How to Ascertain If A Broker Is Regulated
Though a good number of forex brokers claim that they are regulated it is a good idea to ascertain the same before parting with any money or transferring funds to their account. Some forex brokers that operate in different parts of the globe are members of more than one regulatory body. This is good because there is additional scrutiny of their operations. This provides additional protection against fraud and malpractices. Though it is not an absolute requirement that a trader should associate with a forex broker in their own country, most traders prefer to utilize the services provided by a local forex broker because of the convenience of communicating in the language they are most comfortable with.
The main regulator for traders in the UK is the Financial Conduct Authority (FCA) and for those in the US is National Futures Association (NFA). Regulators in Europe include MiFID and CySEC. In the United States, a forex broker of repute is a member of the NFA and is also registered with the US Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant and a Retail Foreign Exchange Dealer. This means that the broker is compliant with all the rules and programs that are laid out to protect the market and the traders from manipulation, fraud, and other abusive practices. It also means that these regulated forex brokers support open, competitive futures and options markets that are financially sound.
Having a well-designed and flashy website alone does not guarantee that the forex broker is a member of a regulatory body. A forex broker that is a member of regulatory bodies usually displays the fact on their websites. Typically, the member/registration numbers are displayed in the ‘About Us’ section of the websites. Like the US, each country has its own regulatory bodies.
Related Pages of Regulated Forex Broker
- Metatrader Forex Brokers
- Lowest Spreads Forex Brokers
- Top Stock Trading Brokers
- Best Forex Brokers to Trade Gold
- Bitcoin trading Brokers
Rate This Post :