Most Important Forex Regulatory Bodies You Should Know

For a beginner forex trader, finding a trustworthy forex broker is a challenging task. The forex market is spilling over with numerous forex brokers competing with each other to expand their list of clients. They offer outstanding advantages, a variety of features, and exciting capabilities. Some of them are associated with forex regulation authorities, whereas others are not.

Importance of Regulating the Forex Market

Forex brokers are responsible for the deposited as well as profited money of traders. The forex market regulatory authorities keep a stringent vigil on the activities of forex brokers. Traders can file a complaint or lawsuit against their brokers if anything goes wrong in terms of the deposit, withdrawal, or the trading platform. The importance of regulatory authorities lies in protecting forex traders from forex scams, frauds, and illegal trading practices.

Forex brokers that are regulated must submit their financial reports to the regulatory authorities they are associated with. The authority assigns an “F” to a broker who fails to submit his financial reports on time. In addition, the authority may slam a penalty on the broker organization or even delist it from its list of members.

Being regulated by an authority is in favor of forex brokers since traders prefer to work with regulated brokers. Every regulated broker organization will mention the fact of being associated with a regulatory authority on its website.

Major Forex Market Regulatory Authorities

Forex regulatory authorities are specific to the countries they operate in and regulate brokers of their respective nations. Here are some of the leading forex regulation organizations:

Financial Services Authority (FSA) (based in the UK)

Australian Securities and Investments Commission (ASIC)

Cyprus Securities and Exchange Commission (CySEC)

Commodity Futures Trading Commission (CFTC) (based in the US)

ASIC – Australian Securities and Investments Commission

BaFIN – The BundesanstaltfürFinanzdienstleistungsaufsicht (Germany)

Financial Services Commission (FSC) – Mauritius

FSB – Financial Services Board (South Africa)

Financial Services Commission – BVI

CFTC has the most stringent rules among all the forex regulatory authorities in the world. For instance, creating an account with brokers affiliated with CFTC is quite cumbersome and may take around 3-4 days. On the other hand, the FSA, ASIC, and CySEC are more flexible.