🏛️ Eleven (11) Regulatory Authorities Worldwide

Since the Forex Exchange Market is a decentralized OTC market, proper brokerage regulation is a top priority for all Forex traders and partners. Effective regulation requires a reliable authority with sufficient resources to closely monitor its members.

Regulatory authorities oversee Forex brokers to ensure the enforcement of proper business practices. They can impose heavy penalties or even revoke licenses at any time. This creates a strong incentive for Forex brokers to operate with ethics and transparency

These are among the most important regulatory authorities in the 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)

🏛️ European Investment Services and Regulated Markets (MiFID)

MiFID, the European Markets in Financial Instruments Directive (Directive 2004/39/EC), has been in effect since November 2007. It regulates the provision of investment services in financial instruments by banks and investment firms, as well as 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 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 stronger regulatory framework was needed to further enhance investor protection and address the emergence of new trading platforms and activities.

Markets in financial instruments directive - MiFID

MiFID, the Markets in Financial Instruments Directive (Directive 2004/39/EC), has been in force since November 2007 and serves as a cornerstone of the EU's financial market regulation. It governs the provision of investment services in financial instruments by banks and investment firms, as well as the operation of traditional stock exchanges and alternative trading venues. While MiFID fostered competition among these services, offering investors more choice and lower prices, its shortcomings became apparent after the financial crisis.

MiFID 2 and MiFIR

In October 2011, the European Commission proposed revisions to MiFID (known as MiFID 2) aimed at making financial markets more efficient, resilient, and transparent, while also strengthening investor protection.

• Updated rules for markets and financial instruments: MiFID 2

Institutional Forex Trading

The Forex market includes many categories of participants, such as central banks, commercial banks, large corporations, retail traders, and institutional traders.

When we refer to institutional traders, we mean interbank traders like banks and large investment firms. Institutional traders enjoy several advantages over retail traders, including lower trading costs (spreads) and sometimes better access to information.