Out of all the criteria for selecting a Forex broker, ensuring that your Forex broker is regulated is one of the most important. Deciding on the trading platform used or the spreads available should only be secondary factors. Regulated Forex brokers not only guarantee a level of service for you as a client but they also help to protect your deposit in the even that the broker runs into financial difficulties.
What it means to be a regulated Forex broker
To achieve the status of ‘regulated’ a broker must opt to join a regulatory financial authority. I doing so they are signing up to the a set of rules and regulations that govern the actions of their brokerage.
These regulations will often require them to submit detailed reports of their financial activities to the regulatory body. They will also have to operate within a framework of guidelines which normally dictates that they must maintain transparency in their financial dealing. All of these steps are designed to help protect the clients interests.
A failure to comply with any of these regulations will lead to fines or the loss of membership of the regulatory authority.
Why Regulated Forex brokers Safeguard Traders
It is because of this strict regulation that traders are offered a level of protection. Their trading deposits have to be held in a separate client account. This helps to ensure that client monies cannot be used for operational purposes by the broker and legally ensures that in the event of bankruptcy, client monies are not able to be used to pay off creditors.
Checking that your Forex Broker is regulated
You can easily check to see if your broker is regulated by visiting their website. Membership of a professional regulatory body is generally easily visible in a section on the site.
If for any reason you are unable to get clarification you can check on with the regulators themselves. While many regions such as the US, UK, Switzerland and the Euro zone have dedicated regulatory bodies, you will need to look harder for brokers based in more remote regions.
If you are in any doubt about the regulatory status of a broker then is it probably best to move on and look for another one.
In the current climate of financial uncertainty is more important than ever to ensure that you choose a regulated Forex broker. Not only will it help protect you against manipulate practices and fraudulent activity, it will also safeguard your deposit if the broker goes bust.
Source: Forexarticlecollection.com
What it means to be a regulated Forex broker
To achieve the status of ‘regulated’ a broker must opt to join a regulatory financial authority. I doing so they are signing up to the a set of rules and regulations that govern the actions of their brokerage.
These regulations will often require them to submit detailed reports of their financial activities to the regulatory body. They will also have to operate within a framework of guidelines which normally dictates that they must maintain transparency in their financial dealing. All of these steps are designed to help protect the clients interests.
A failure to comply with any of these regulations will lead to fines or the loss of membership of the regulatory authority.
Why Regulated Forex brokers Safeguard Traders
It is because of this strict regulation that traders are offered a level of protection. Their trading deposits have to be held in a separate client account. This helps to ensure that client monies cannot be used for operational purposes by the broker and legally ensures that in the event of bankruptcy, client monies are not able to be used to pay off creditors.
Checking that your Forex Broker is regulated
You can easily check to see if your broker is regulated by visiting their website. Membership of a professional regulatory body is generally easily visible in a section on the site.
If for any reason you are unable to get clarification you can check on with the regulators themselves. While many regions such as the US, UK, Switzerland and the Euro zone have dedicated regulatory bodies, you will need to look harder for brokers based in more remote regions.
If you are in any doubt about the regulatory status of a broker then is it probably best to move on and look for another one.
In the current climate of financial uncertainty is more important than ever to ensure that you choose a regulated Forex broker. Not only will it help protect you against manipulate practices and fraudulent activity, it will also safeguard your deposit if the broker goes bust.
Source: Forexarticlecollection.com
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