Regulations

 

Forex market is a decentralize market in which trillions of dollars are exchanged a day. Trading online in that such vast market is difficult to monitor and control. If forex brokers are allowed to run their business arbitrarily, the market would become a chaos. Therefore, to make sure everything is in control, the forex market has a lot of very strict regulations and policies regulated by regulatory bodies that keep market participants in the right track. These regulatory bodies protect the public from fraud, manipulation and abusive practices related to the trading activities and services, specially for brokers.

 

A reputable forex broker should register with at least one regulatory body who acts as an advisor that monitor all of its operating. The regulations require forex brokers to have rules, programs and services to protect the integrity of the market. The more regulations a broker follow, the more reliable it is. If a forex broker have no regulation at all, it's likely operating against the law.

forex regulation

How do regulations keep forex brokers in the right track?

 

- A proper forex broker must be licensed in the country in which its headquarter is based.

- To be approved by regulatory authorities, a broker have to maintain strict quality control standards in order to make sure its business with clients is safe, fair and honest.

- By regulations, a licensed broker is subject to periodical audits, reviews and evaluations which enforce its operation to comply to industry standards.

- Regulations require brokers to maintain a sufficient amount of fund to meet their clients' needs. These regulations ensure that the brokers are able to execute and complete transactions made by their clients.

- Forex brokers are obliged to honor each and every clients' transactions. Failure or deny to complete transaction with a client will lead to the revoking of their license.

- Forex brokers are in no way allowed to misrepresent their services or to solicit clients to trade without a fair representation of the risks involved. Be ware of brokers who promise profits in the financial exchange market, since by regulation they are not in any position to do so. No broker can guarantee profits in the forex market.

 

Checking up forex brokers with their regulatory bodies

 

Most country have regulatory bodies to supervise and control the forex industry in their land. To ensure your preferred broker is well regulated, you better check it up with its regulatory bodies. On regulator's website, you might find your broker in the regulated list as well as if it have any updated anouncement or any penalty applied to that broker. Those information will help you to evaluate your broker at another edge of view, not only the nice face that they present to you. Following are the list of regulatory bodies in each country:

Country

Regulatory body Website
Anguilla Anguilla Financial Services Commission www.fsc.org.ai
Antigua Eastern Caribbean Securities Regulatory Commission (ECSRC) www.ecsrc.com
Australia Australian Securities and Investment Commission (ASIC) www.asic.gov.au
Austria Austrian Financial Market Authority (Austrian FMA) www.fma.gv.at/en
Azerbaijan State Committee for Securities (Azerbaijan) www.scs.gov.az
Baku Stock Exchange www.bfb.az
Bangladesh Securities and Exchange Commission (SEC) www.secbd.org
Belgium The Financial Services and Markets Authority (FSMA) www.fsma.be
Belize International Financial Services Commission (IFSC) www.ifsc.gov.bz
British Virgin Island BVI Financial Services Commission (FSC of BVI) www.bvifsc.vg
Bulgaria Financial Supervision Commission of Bulgaria (FSC Bulgaria) www.fsc.bg
Canada
 
British Columbia Securities Commission (BCSC) www.bcsc.bc.ca
Canadian Investor Protection Fund (CIPF) www.cipf.ca
Financial Transactions and Reports Analysis Center of Canada (FINTRAC) www.fintrac.gc.ca
Investment Industry Regulatory Organization of Canada (IIROC) www.iiroc.ca
Ontario Securities Commission (OSC) www.osc.gov.on.ca
Cayman Islands The Cayman Islands Monetary Authority (CIMA) www.cimoney.com.ky
China China Securities Regulatory Commission (CSRC) www.csrc.gov.cn
Croatia Croatian Financial Services Supervisory Agency (CFSSA) www.hanfa.hr
Cyprus Cyprus Securities and Exchange Commission (CySEC) www.cysec.gov.cy
Czech Republic Czech National Bank (CNB) www.cnb.cz
Denmark Danish Financial Supervisory Authority (Danish FSA) www.dfsa.dk
Dubai, UAE Dubai Multi Commodities Centre (DMCC) www.dmcc.ae
Dubai Gold & Commodities Exchange (DGCX) www.dgcx.ae
Dubai Financial Services Authority (DFSA) www.dfsa.ae
Emirates Securities and Commodities Authority (SCA) www.sca.ae
Estonia The Financial Supervision Authority (FINANTSINSPEKTSIOON) www.fi.ee
Finland Financial Supervisory Authority in Finland (FIN-FSA) www.fin-fsa.fi
France Autorite des marches financiers (AMF) www.amf-france.org
Credit Institutions and Investment Firms Committee (CECEI) www.banque-france.fr
Autorité de Contrôle Prudentiel (ACP) www.banque-france.fr
Germany Federal Financial Supervisory Authority (BaFin) www.bafin.de
Greece The Hellenic Capital Market Commission (HCMC) www.hcmc.gr
Hong Kong Securities and Futures Commission (SFC) www.sfc.hk
Hungary Hungarian FSA (HFSA) www.pszaf.hu
Iceland The Financial Supervisory Authority (FME) www.fme.is
India Securities and Exchange Board of India (SEBI) www.sebi.gov.in
Reserve bank of India (RBI) www.rbi.org.in
Indonesia Commidity Futures Trade Regulatory Agency (CoFTRA) www.bappebti.go.id
Ireland Central Bank of Ireland www.financialregulator.ie
Isle of Man The Financial Supervision Commission (FSC) www.fsc.gov.im
Israel The Israel Securities Authority (ISA) www.isa.gov.il
Italy Commissione Nazionale per le Società e la Borsa (CONSOB) www.consob.it
Japan Financial Services Agency of Japan (FSA Japan) www.fsa.go.jp
Japan Securities Dealers Association (JSDA) www.jsda.or.jp
Japan Investor Protection Fund (JIPF) www.jipf.or.jp
Tokyo Commodity Exchange (TOCOM) www.tocom.or.jp
Kenya Capital Markets Authority (CMA) www.cma.or.ke
Kuwait Ministry of Commerce and Industry in Kuwait www.moci.gov.kw
Kuwait Chamber of Commerce & Industry (KCCI) www.kuwaitchamber.org.kw
Latvia The Financial and Capital Market Commission (FKTK) www.fktk.lv
Lebanon Banque Du Liban www.bdl.gov.lb
Lithuania The Lithuanian Securities Commission, Bank of Lithuania www.lb.lt
Luxembourg Commission de Surveillance du Secteur Financier (CSSF) www.cssf.lu
Liechtenstein The Financial Market Authority Liechtenstein (FMA) www.fma-li.li
Malaysia
Securities Commission Malaysia
www.sc.com.my
Malta Malta Financial Services Authority (FSA in Malta) www.mfsa.com.mt
Mauritius Financial Services Commission of Mauritius (FSC Mauritius) www.gov.mu
Netherlands Netherlands Authority for the Financial Markets (AFM) www.afm.nl
Nevis Nevis Financial Services www.nevisfinance.com
New Zealand Financial Markets Authority (FMA) www.fma.govt.nz
Financial Service Providers Register (FSPR) www.business.govt.nz
Financial Services Complaints Limited (FSCL) www.fscl.org.nz
Nigeria Securities & Exchange Commission Nigeria www.sec.gov.ng
Norway The Financial Supervisory Authority of Norway www.finanstilsynet.no
Pakistan Securities and Exchange Commission of Pakistan (SECP) www.secp.gov.pk
Panama Superintendencia de Mercado de Valores - The Securities Market Superintence (SMV) www.supervalores.gob.pa
Ministry of Industry and Commerce (MICI) www.mici.gob.pa
Philippines Securities and Exchange Commission Philippines www.sec.gov.ph
Poland Polish Financial Supervision Authority (PFSA) www.knf.gov.pl
Portugal Comissão do Mercado de Valores Mobiliários (CMVM) www.cmvm.pt
Romania Romanian National Securities Commission (C.N.V.M.) www.cnvmr.ro
Russia FFMS in Russia (FCFR) www.ffms.ru
Centre for Regulation of Off-Exchange Financial Instruments and Technologies (CRFIN) www.crfin.ru
Financial Market Relations Regulation Center (FMRRC) www.en.crofr.ru
Seychelles Seychelles International Business Authority (SIBA) www.siba.net
Singapore Monetary Authority of Singapore (MAS) www.mas.gov.sg
Singapore Exchange (SGX) www.sgx.com
Slovakia National Bank of Slovakia (NBS) www.nbs.sk
South Korea Financial Supervisory Commission www.fss.or.kr
Spain Comisión Nacional del Mercado de Valores (CNMV) www.cnmv.es
Sri Lanka Securities and Exchange Commission of Sri Lanka www.sec.gov.lk
Sweden Swedish Financial Supervisory Authority (Swedish FSA) www.fi.se
Switzerland Association Romande des Intermediares Financiers (ARIF) www.arif.ch
Swiss Bankers Association (SBA) www.swissbanking.org
Swiss Federal Banking Commission (SFBC) www.finma.ch
Swiss Federal Department of Finance (SFDF) www.efd.admin.ch
Swiss Federal Finance Administration (SFFA) www.efv.admin.ch
Swiss Financial Market Supervisory Authority (FINMA) www.finma.ch
Swiss National Bank (SNB) www.snb.ch
PolyReg www.polyreg.ch
Geneva Chamber of Commerce (CCIG) www.ccig.ch
Organisme d'Autoregulation des Gerants de Patrimoine (OAR-G) www.oarg.ch
Tanzania The Capital Markets and Securities Authority (CMSA) www.cmsa-tz.org
Thailand Securities and Exchange Commission, Thailand www.sec.or.th
Turkey Capital Markets Board - SPK www.spk.gov.tr
United Kingdom UK Financial Services Authority (FSA UK) www.fsa.gov.uk
Financial Services Compensation Fund (FSCS) www.fscs.org.uk
United States Commodities and Futures Trading Commission (CFTC) www.cftc.gov
Financial Industry Regulatory Authority (FINRA) www.finra.org
National Futures Association (NFA) www.nfa.futures.org
New York Stock Exchange (NYSE) www.nyse.com
Office of the Comptroller of the Currency (OCC) www.occ.treas.gov
US Securities and Exchanges Commission (U.S. SEC) www.sec.gov
Chicago Board of Trade (CBOT) www.cmegroup.com
Securities Investor Protection Corporation (SIPC) www.sipc.org
International Organizations  EU Commission - Markets in Financial Instruments Directive (MiFID) www.ec.europa.eu
Ernst & Young (E&Y) www.ey.com
Financial Markets Association (ACI) www.aciforex.com
KPMG www.kpmg.com

There are a lot of regulatory bodies out there, but only some of them are leading authorities in forex market, such as: National Futures Association (NFA), Commodities and Futures Trading Commission (CFTC), UK Financial Services Authority (FSA UK), Markets in Financial Instruments Directive (MiFID), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investment Commission (ASIC), Federal Financial Supervisory Authority (BaFin), Swiss Financial Market Supervisory Authority (FINMA), Investment Industry Regulatory Organization of Canada (IIROC) and Financial Services Agency of Japan (FSA Japan).

 

Keep in mind that only trust on broker who have regulation, it's better if it has leading regulations.