Which Is The Most Important Forex Regulator by Country

In that context, there are several governmental and other supervisory bodies aiming to manage and to control forex brokers and force them in following fair business practices.

Forex trading is governed by strict regulatory authorities of different countries on a nation to nation‘s basis. Every country has a public regulatory agency that oversees the operation of things in the Forex and financial market. As you explore the opportunities available in the foreign exchange market, and narrow down the list of the best regulated forex brokers, let’s have a discussion of the major forex regulatory bodies and agencies that you should be aware of.

Why Is Regulation Important in Forex Market

1. Dealing with fraud

As forex trading comes with a lot of profit potentials, it as well attract the attention of elements who perpetrate corrupt and dishonest activities. Many of these criminals have found that the easiest way to con would-be traders and active traders is by forming brokerage companies, taking in money from traders and finding ways to run off with it. They run their scam operations by faking their regulatory status, cloning websites of genuine brokers and even going to great lengths to use the entire trading process against their clients.

This has made regulators engage in stricter control throughout the whole forex industry. The impositions of stricter regulation plus savvier traders are making unregulated brokers to get regulated or quit their operations.

2. Client protection

Forex regulators can ensure brokers comply with segregation of traders funds. Segregation is a practice where funds belonging to traders are kept in a bank account which is separate from the operational accounts of the broker. Therefore, through regulation, the client interests are safeguarded while their investment is secured since there is compensation where bankruptcy occurs.

3. Promoting fair and ethical behavior

Regulators take the responsibility of the licensing and supervision of brokers. The process of licensing is stringent and usually involves ensuring that only people with certain industry qualifications are allowed to hold top positions in these forex brokerages.

The most important forex market regulators cover the jurisdictions where most of the worlds forex brokerage businesses are located. In reality, it is not possible to have forex brokers in every country. Here are the main regulators in the forex market:

Among these, there are three regulators that have a relatively strict regulatory process and more complete regulatory system—FCA, FINMA and NFA. Well tell you more about the FCA to help you deal with the brokers under their regulation.

How to Deal With Brokers under FCA Regulation

The Financial Conduct Authority (FCA) in the UK is one of the most reputable regulatory watchdogs in the world for regulating forex brokers and other financial entities.

Forex traders would prefer to open trading accounts from FCA regulated forex brokers because of the watchdogs stringent regulatory laws, protection of client funds and companies insolvency compensation rules etc.

After Brexit comes into force, FCA license is only available for UK traders, not for EU clients. Forex companies must get a EU passport if they want to reach EU clients.

How does the FCA regulate a forex broker？

1. Safety of Client Funds：

FCA requires investment companies(including forex brokers) to open segregated accounts for their client funds; from this point, the client funds are protected.

The FCA handbook details are as follow

A firm, on receiving any client money, must promptly place this money into one or more accounts opened with any of the following:

(1) a central bank;

(2) a CRD credit institution;

(3) a bank authorised in a third country;

(4) a qualifying money market fund.

2. Requirement on Forex Brokers' Reports：

Annual accoounts and reports; Annual controllers reporting; Client asset reports; Client money and assets reporting; Market data reporting; Product sales data reporting; Remuneration data reporting; Reporting complaints; Transaction reporting.

How to check a broker is FCA-regulated or not？

Generally speaking, FCA-regulated broker profile will be found at the Financial Services Register page on FCA website. Try to find it and check if it will match the info from the broker website.

The detailed steps are as below:

1. Find the licensed/reference no.(preferred) or name of the forex broker, which you can get from the broker's website;

2. Enter the reference no. or name into the search bar on https://register.fca.org.uk/s/;

Note: If you can't find the broker's profile on FCA wesbite, it's probably an unauthorised broker and please keep away of it.

3. And you'll get the broker's contents on FCA website. At this time you will click the 'What can this firm do in the UK？' and check if the broker has the authorization to provide 'Rolling spot forex contract' to 'Retail' customer;

4. If all the steps above have been done, don't forget to check the most important information: check if the firm details published on FCA website matches the ones you'll go to trade with, especially the website and email etc.

If no, please keep away the broker because it's probably an unauthorized firm and your money will fall in danger.

How to solve disputes with a FCA-regulated broker？

When you have disputes with a FCA-regulated broker, you can proceed the following ways:

1st way: The recommended way is to contact the broker directly and discuss with them to find a solution.

2nd way: If you're not satisfied with the broker's solution, try to contact FOS in UK, which aims at solving the disputes between the forex broker and the investor.

You can either send the complaint to the email: complaint.info@financial-ombudsman.org.uk or make an online complaint form and submit it.

Emailed Complaint Form: https://www.financial-ombudsman.org.uk/contact-us/forms

Online Complaint Form: https://help.financial-ombudsman.org.uk/help

3rd way: If the 2 ways above can't solve the dispute, the last way is to issue a case to the court in UK.