Forex Regulators

Regulatory authorities control Forex brokers in order to ensure the implementation of proper business practicesAs the Forex Exchange Market is a non-centralized OTC market, proper brokerage regulation is a top issue for all Forex traders and partners. An effective regulation requires a reliable regulatory authority with sufficient resources, capable of closely monitoring its members.

Regulatory authorities control Forex brokers in order to ensure the implementation of proper business practices. They can impose high penalties or even withdraw a license at any time. This means Forex brokers have a serious incentive to conduct business with ethics and transparency.

 

Eleven (11) Regulatory Authorities Around the Globe

These are the most popular regulatory authorities of our financial world:

  1. FCA UK (Financial Conduct Authority –United Kingdom)
  2. CySEC (Cyprus Securities and Exchange Commission -Cyprus)
  3. FINMA (Swiss Financial Market Supervisory Authority –Switzerland)
  4. ASIC (Australian Securities & Investments Commission -Australia)
  5. FMA (Financial Markets Authority -New Zealand)
  6. FSA (Financial Services Agency -Japan)
  7. CFTC (Commodities Futures Trading Commission -US)
  8. NFA (National Futures Association -US)
  9. FSB (Financial Service Board –South Africa)
  10. IFSC (International Financial Services Commission –Belize)
  11. FSC (Financial Services Commission - British Virginia Islands)

MiFID and MiFID2

MiFID is the European Markets in Financial Instruments Directive (Directive 2004/39/EC)European Investment Services and Regulated Markets (MiFID)

MiFID is the European Markets in Financial Instruments Directive (Directive 2004/39/EC) and it is active since November 2007, this directive governs the provision of investment services in financial instruments by banks and investment firms and the operation of traditional stock exchanges and alternative trading venues.

 

EU Rules for the Financial Sector

The first set of rules adopted by the EU helped to increase the competitiveness of financial markets by creating a single market for investment services and activities. However, after the 2008 financial crisis, it became clear that a more robust regulatory framework was needed to

  • further strengthen investor protection
  • address the development of new trading platforms and activities

 

Markets in financial instruments directive - MiFID

MiFID is the markets in financial instruments directive (Directive 2004/39/EC). In force since November 2007, it is a cornerstone of the EU's regulation of financial markets. It governs

  • the provision of investment services in financial instruments by banks and investment firms
  • operation of traditional stock exchanges and alternative trading venues

While MiFID created competition between these services and brought more choice and lower prices for investors, shortcomings were exposed in the wake of the financial crisis.

 

MiFID 2 and MiFIR

In October 2011, the European Commission tabled proposals to revise the Markets in Financial Instruments Directive (MiFID 2) with the aim of making financial markets more efficient, resilient and transparent, and to strengthen the protection of investors.

Binary Options Brokers Regulation

Binary Options Brokers and Licensing Authorities

Registration with a trustable government body adds creditability to any binary options broker.

Regulators enforce brokers to apply certain policies and practices towards minimizing their operational risk, but also to protect corporate and customer funds. Regulators may impose fees to brokers who misbehave and work as a shield in favor of binary options traders. In general, regulation matters.

Each different country has its own governing body which aims to monitor and to control the domestic financial sector. Since the past couple of years, binary options brokers started to get licensed from CySEC (Cyprus). Some other brokers have also registered with FCA (UK), BaFin (Germany), etc. This is good news for binary options traders. Here are the most important regulators in Europe, per individual country:

  • The United Kingdom -The domestic governing body for the United Kingdom is the Financial Conduct Authority (FCA UK)
  • Cyprus -The domestic governing body for Cyprus is the Cyprus Securities and Exchange Commission (CySEC UK)
  • Germany -The domestic governing body for Germany is the Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin)
  • France -The domestic governing body for France is the Autorité des Marchés Financiers (AMF)
  • Spain -The domestic governing body for Spain is the Comisión Nacional del Mercado de Valores (CNMV)
  • Italy -The domestic governing body for Italy is the Commissione Nazionale per le Società e la Borsa (CONSOB)
  • The Netherlands -The domestic governing body for the Netherlands is the De Autoriteit Financiële Markten (AFM)
  • Poland -The domestic governing body for Poland is the Komisja Nadzoru Finansowego (KNF)
  • Ireland -The domestic governing body for Ireland is the Central Bank of Ireland (CBI)
  • Sweden -The domestic governing body for Sweden is the Finansinspektionen (FI)
  • Austria -The domestic governing body for Austria is the Finanzmarkt Österreich (FMA)
  • Belgium -The domestic governing body for Belgium is the Financial Services and Markets Authority (FSMA)
  • Czech Republic -The domestic governing body for the Czech Republic is the Česká Národní Banka (CNB)
  • Denmark -The domestic governing body for Denmark is the Finanstilsynet (FSA)
  • Finland -The domestic governing body for Finland is the Finanssivalvonta (FIN-FSA)
  • Greece -The domestic governing body for Greece is the Hellenic Capital Market Commission (HCMC)
  • Hungary -The domestic governing body for Hungary is the Pénzügyi Szervezetek Állami Felügyelete (PSZÁF)
  • Latvia -The domestic governing body for Latvia is the Finanšu Un Kapitāla Tirgus Komisija (FKTK)
  • Luxembourg -The domestic governing body for Luxembourg is the Commission de Surveillance du Secteur Financier (CSSF)
  • Malta -The domestic governing body for Malta is the Malta Financial Services Authority (MFSA)
  • Norway -The domestic governing body for Norway is the Finanstilsynet
  • Portugal -The domestic governing body for Portugal is the Comissâo do Mercado de Valores Mobiliários (CMVM)
  • Romania -The domestic governing body for Romania is the Romanian National Securities Commission (CNVMR)
  • Slovakia -The domestic governing body for Slovakia is the Národná Banka Slovenska (NBS)
  • Slovenia -The domestic governing body for Slovenia is the Agencija za trg Vrednostnih Papirjev (ATVP)

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