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)

FCA UK (Financial Conduct Authority)

Foundation: 2013 (previously Financial Services Authority, about 4,500 employees)

Capital Requirement: 100,000 to 1 million GBP

License Cost: 35,000 to 50,000 GBP

Covering: 50,000 GBP per client

Reliability: 9/10

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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.

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