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Broker Regulators in Forex Market12 min read

Regulators of brokers can issue licenses to intermediary firms and fully control their activities in the international market. As a rule, such organizations are government agencies and provide professional services to all participants of the exchange platform. At the same time, there are unscrupulous controllers who issue a document to unreliable companies and do not provide any protection to traders.

What is the Difference Between good Broker Regulators?

The main goal of the controllers is to prevent offenses in the economic sphere. Such institutions provide legal protection and monitor the behavior of participants in the international market. As a rule, to obtain a license from a reliable regulator, a broker needs to meet several requirements:

  1. Regular reporting and transparent business conduct. All data must be provided on time and in full. The client and the controller have the right to know how the intermediary conducts his business.
  2. Starting capital of over one million euros. To provide quality customer support, a brokerage company must have a large deposit.
  3. Audits should take place at least once a year.
  4. Obtaining a license lasts from 7 to 18 months. During this time, experts from regulatory authorities complete a full audit of the company.

Separate regulators of Forex brokers may have their own requirements for intermediaries. Some of them increase the minimum entry threshold, while others work only with firms that have registered in the specified territory.

Each controller performs its functions. As a rule, his responsibilities include resolving conflicts between intermediary firms and international market traders. The institution should provide investment protection and maintain healthy competition in the Forex broker market. To assess the reliability of the license, the trader must obtain information about the controller, who issues the relevant documents. Thus, the trader will select the safest company to enter the world market.

The Best Financial Brokers Regulators

An indicator of a reliable Forex broker is the availability of a license from an influential regulator. Below we present the five most famous organizations that you can trust. All these organizations have proven themselves as true professionals. If they issued an official license to the intermediary, then the company is really reliable.

NFA

NFA (United States) Regulation

The NFA (National Futures Association) controls financial companies in the United States. This structure was created in 1982, and since then it has been protecting the investor interests of large capital holders and ordinary traders. NFA oversees the activities of intermediaries and monitors the implementation of common trading rules on the Forex platform. NFA is financed from membership dues and assessment fees, and membership is mandatory for many market participants.

FCA

FCA (United Kingdom) Regulation

The FCA (Financial Conduct Authority) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The FCA regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom. It focuses on the regulation of conduct by both retail and wholesale financial services firms.

BaFin

BAFIN (Germany) Regulation

The BAFIN is the Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) based on German federal law. It maintains the stable operation of the local financial platform, issues licenses to dealing centers, controls the banking system and brokerage reports. Among other things, BAFIN carries out scientific activities and seeks to identify risks associated with intermediary services.

ESMA

ESMA (European Union) Regulation

ESMA (European Securities and Markets Authority) works in the field of securities legislation and regulation to improve the functioning of financial markets in Europe, strengthening investor protection and co-operation between national competent authorities. ESMA is the direct manager of certain financial institutions, such as credit rating agencies (CRA) and trade repositories (TR). These organizations constitute a significant part of the EU market infrastructure.

CFTC

CFTC (United States) Regulation

The CFTC (Commodity Futures Trading Commission) is an independent U.S. federal agency established by the Commodity Futures Trading Commission Act of 1974. The Commodity Futures Trading Commission regulates the commodity futures and options markets. Its goals include the promotion of competitive and efficient futures markets and the protection of investors against manipulation, abusive trade practices, and fraud. All CFTC Regulated Brokers are required to register with the CFTC and to follow all compliance regulations regarding consumer protection, financial filings, and consumer disclosures.

IFSC

IFSC (Belize) Regulation

The IFSC (International Financial Services Commission), a Belizian regulatory body founded in 1999, is responsible for regulating all the brokerage firms, businesses, and organizations that are involved in financial markets and investment services. The IFSC is held accountable by the Ministry of Belize Securities and International Financial Services Commission Act.

CONSOB

CONSOB (Italy) Regulation

The Italian Securities and Exchange Commission or the Commissione Nazionale per le Società e la Borsa (CONSOB) is a governmental regulatory body, established in 1974, responsible for regulating the Italian financial markets, investment firms, forex brokers, securities markets, and the stock exchange including Borsa Italiana. The CONSOB makes sure that market participants follow the regulations and the regulated firms are transparent in their financial activities.

MiFID

MiFID (European Union) Regulation

The development of the provisions of the Directive was carried out under the guidance of the FCA – (UK regulator, formerly known as the FSA) and took several years. The beginning of work on the document was laid back in 2004, and in 2007 the document entered into force. Today, MiFID requirements are mandatory for 27 EU countries and 3 EEA countries.

MiFID – protection of investor activity, transparency of financial markets, increasing the efficiency and competitiveness of participants in financial markets. The Directive describes the provisions governing the markets for financial instruments in order to maximize the introduction and expansion of investment services in the European space.

FSPR (New Zealand) Regulation

The FSPR (Financial Service Providers Register) is a New Zealand registry of financial companies, which is part-regulator. The organization was created in 2008 and is now fully controlled by the Ministry of Finance. To some extent, the lack of independence is a minus for the regulator, since a conflict of interest may arise. But in other countries, independence is more formal (the United States is an exception), since central banks influence regulators.

CySEC

CySEC (Cyprus) Regulation

The CySEC (Cyprus Securities and Exchange Commission) carries out controlling activities for companies in Cyprus and the European Union, which need access to the financial market. Despite the fact that strict requirements are stated to obtain a license, forex brokers strive to register in this particular economic zone – Cyprus, while continuing to work in many countries of the world.

FSCL

FSCL (New Zealand) Regulation

The FSCL (Financial Services Complaints Limited) service was formed in 2008. The creation of this regulatory body was initiated by financial companies in order to increase their own credibility. The main objective of the organization is to resolve disputes arising between traders and brokerage companies, and all conflicts should be resolved by this regulator as quickly and fairly as possible.

FSCL is a non-profit and non-governmental institution financed exclusively from contributions from controlled organizations (the amount varies from 100 to 15,000 dollars per year, depending on the type of activity, the turnover of funds and the number of employees in the state). In fact, the New Zealand regulator is some alternative to the court – it is able to resolve the differences as soon as possible.

FINACOM

FINACOM (Hong Kong) Regulation

The Financial Commission (FINACOM) is an independent brokerage regulator. The Commission is an international organization not registered in any jurisdiction. The headquarters of this organization is located in Hong Kong. The main goal of FINACOM is to resolve disputes arising between traders and brokers, and this regulatory authority undertakes to resolve the conflict as impartially and as soon as possible.

The company is managed by the board of directors, and the staff of the regulator consists exclusively of professionals with extensive experience and comprehensive knowledge in the field of finance.

MFSA

MFSA (Malta) Regulation

The MFSA (Malta Financial Service Authority) the Malta Financial Regulatory and Supervisory Authority is a government body (albeit completely independent) that oversees the banking and credit and financial sectors. Activity reports are submitted each year to the Parliament of Malta. It is the Prime Minister of Malta who appoints the governing structure.

MFSA is part of the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).

ASIC

ASIC (Australia) Regulation

The ASIC (Australian Securities and Investments Commission) is a government body that oversees transactions in the country’s financial market. The organization controls the activities of stock exchanges, major banking institutions of the country, investment sites and forex brokers. The task of the committee is to develop the financial system of Australia, increase its financial stability, as well as increase the level of confidence of traders in investment companies.

The committee was created in 1991 at the initiative of state bodies to ensure the protection of the stock market from fraud. ASIC regulations include requirements for financial services providers. Since 2010, the committee’s area of ​​responsibility includes monitoring the work of brokers, as well as lending and trust companies. The license of the regulator guarantees the client compliance of the broker with financial standards. The committee resolves issues of consumer insurance and protection of their rights, and inspects investment products.

FINMA

FINMA (Switzerland) Regulation

The FINMA (Swiss Financial Market Supervisory Authority) is a regulatory organization in Switzerland that licenses, regulates, and supervises all types of financial firms including banks, stock markets, insurance companies, brokers, and other financial market participants. The FINMA was formed in 2007 and is headquartered in Bern, Switzerland.

The FINMA is an independent institution with its own legal personality based in Bern. It is institutionally, functionally and financially independent from the central federal administration and the Federal Department of Finance and reports directly to the Swiss parliament.

FMA

FMA (New Zealand) Regulation

The FMA (Financial Markets Authority) is the regulatory authority for financial markets as well as its participants in New Zealand. During the 2006 to 2010 period, the Securities Commission Of New Zealand, which was the predecessor to the FMA, received a lot of criticism due to the failure of numerous financial companies and the subsequent loss of client funds. The Securities Commission of New Zealand was also unable to enforce strict regulations, which ultimately led to the breakdown of the New Zealand economy, played in part by the global financial crisis.

JFSA

JFSA (Japan) Regulation

The JFSA (Japanese Financial Services Agency) is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of the financial system of Japan. The agency operates with a Commissioner and reports to the Minister of State for Financial Services. It oversees the Securities and Exchange Surveillance Commission and the Certified Public Accountants and Auditing Oversight Board.

FINRA

FINRA (United States) Regulation

In the United States, the Financial Industry Regulatory Authority (FINRA) is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) and the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. It is a non-governmental organization that regulates member brokerage firms and exchange markets. The government agency which acts as the ultimate regulator of the securities industry, including FINRA, is the Securities and Exchange Commission.

IIROC

IIROC (Canada) Regulation

The IIROC (Investment Industry Regulatory Organization of Canada) is a self-regulatory organization (SRO) recognized under Applicable Securities Laws in Canada. Oversight of IIROC is conducted by members of the Canadian Securities Administrators (CSA). IIROC oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.

FSC (BVI)

FSC (British Virgin Islands) Regulation

The BVI FSC (Financial Services Commission) is an autonomous regulatory authority responsible for the regulation, supervision and inspection of all the British Virgin Islands financial services including insurance, banking, trustee business, company management, mutual funds business, the registration of companies, limited partnerships and intellectual property.

Banque de France

Banque De France (France) Regulation

The Banque De France is a bit different to some of the other regulatory agencies in the world, as Banque De France is actually the Central Bank of France, and therefore, a completely Government owned entity. It is also directly linked to the ECB, and is one of the most powerful central banks in the world. Banque De France was founded in 1800 during Napoleon’s rule, and has been instrumental in shaping up France’s economy over the centuries to make it one of the world’s largest economies.

AFM (Netherlands) Regulation

The AFM (Authority Financial Markets) is responsible for the oversight and regulation of the financial services industry within the Netherlands. This means that AFM supervises the conduct of the entire financial market sector: savings, investment, insurance, loans, pensions, capital markets, asset management, accountancy and financial reporting. The AFM is committed to promoting fair and transparent financial markets.

CNMV

CNMV (Spain) Regulation

The National Securities Market Commission (Spanish: Comisión Nacional del Mercado de Valores) (often abbreviated as CNMV) is the Spanish government agency responsible for the financial regulation of the securities markets in Spain. It is an independent agency that falls under the Ministry of Economy.

FSB

FSCA (South Africa) Regulation

The FSB (Financial Services Board of South Africa), now renamed to Financial Sector Conduct Authority (FSCA), is a supervisory body of financial services industry in South Africa under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act). The company that intends to conduct Forex business on a discretionary basis must obtain a Category I or Category II Discretionary FSP license with FSCA.

CSSF

CSSF (Luxembourg) Regulation

The CSSF (Commission de Surveillance du Secteur Financier) is responsible for the financial regulation in Luxembourg. The CSSF is responsible for the supervision of credit institutions, experts in the financial sector, investment companies, pension funds, regulated securities markets and their operators, multilateral trading facilities and payment institutions. The CSSF is the competent authority for the public auditor oversight.

FIN-FSA

FIN-FSA (Finland) Regulation

The FIN-FSA (Finland Financial Supervisory Authority) is charged with the oversight and regulation of the entire Finnish financial services industry. The site contains information on regulation, securities registration, statistics, and publications made by FIN-FSA. The operational objective is to promote stable conditions in the financial markets and enhance public confidence in supervision and market behaviour. There are about 500 supervised entities. These include banks, brokerage firms, stock and derivatives exchanges, and management companies for mutual funds.

FSA

FSA (Seychelles) Regulation

The FSA (Financial Services Authority Seychelles) is the autonomous regulatory body responsible for the non-bank financial services in the Seychelles. Established under the FSA Act, 2013, the Authority is responsible to license, regulate, enforce regulatory and compliance requirements, monitor and supervise the conduct of business in the non-bank financial services sector in Seychelles. The FSA in collaboration with the Seychelles Investment Board (SIB) organized the second Seychelles Financial Services Roadshow in Asia which took place from the June 2019, under the theme «Seychelles, your Global Partner in the Digital Era of Financial Services».