Forex Regulations & Forex Regulatory Organizations

forex broker regulations

When you will be looking for the best forex broker for yourself, you will find the main criteria to select one is to check their regulatory status and the authenticity of their regulatory body under which they are legally regulated in that country. Unregulated forex brokers are everywhere and trading under them can be really risky for you because they don’t have any authentic regulatory status and they are not bound to any regulatory body as well. Therefore, traders often lose their money on the trading market because of these brokers who don’t follow forex regulations. For this reason, every country with forex trading market now possess regulatory body as well to provide forex broker regulations and offer a safer trading environment to the traders.

Forex Broker Regulations

Forex Regulations are established to protect the funds of the traders from the unregulated brokers and to give effective remedy when the traders face losses because of the incompetency and dishonesty of the brokers. When the brokers will have to follow the forex broker regulations, they won’t be able to do any trick, cheat, or anything like that. Therefore, most countries are now launching forex broker regulations and asking the best forex brokers to obtain a regulatory status or approval from the right authority. So that, no unregulated brokers can do trading and dealing with the traders. Some countries follow strict forex regulations in terms of providing the regulatory approval. Forex brokers have to obtain approval from their own country first and then they can ask for license to do brokerage service in other countries as well.

Forex Regulatory Organizations throughout the World

Forex Regulations are spreading all over the world just like the forex market. Every country is ensuring forex broker regulations when they are opening the forex market in their country. FCA from the UK, NFA from the US, and CySEC from Cyprus are some of the most recognized forex regulatory bodies of the world. Here we are providing forex broker regulations of some of the popular forex market countries as follows:

Forex Regulations in Australia

ASIC (Australian Securities and Investment Commissions) is the main and official forex regulatory body of Australia. They maintain all the forex regulations in Australia and provide regulatory approval to all the forex brokers of their jurisdiction. Australia is one of the best offshore places for forex traders. Because of their high leverage amount which is 1:500 and their flexible forex broker regulations they have earned their place up there. You will also get to deal with a large number of ECN brokers. But as an offshore forex broker, you will find it difficult to get permission from ASIC.

Forex Regulations in Canada

There are several regulatory bodies in Canada but they all work together to provide the regulatory status to the local forex broker. IIROC (Investment Regulatory Organization of Canada), OSC (Ontario Security Commission), and BCSC (British Columbia Securities Commission) are the ones who make forex broker regulations in Canada. They regulated a maximum forex leverage of 1:50. Though Canada is not a popular place to trade as a non-resident forex broker but you can still go for it if you wish. Forex regulations in Canada are pretty tough and difficult and for this reason they have a small number of brokers under their sleeves.

Forex Regulations in Cyprus

Cyprus has one of the finest regulatory bodies of the world called CySec (Cyprus Securities and Exchange Commission). They are quite popular among the offshore forex brokers all over the world as an offshore trading venue. There are several reasons behind this which are: EU Membership, flexible forex broker regulations, and a huge number of available brokerage houses who can provide a full-supportive infrastructure. Their maximum forex leverage is 1:30. You can certainly choose Cyprus to start your trading journey because of all these features and benefits.

Forex Regulations in France

There are three regulatory bodies in France as well and they cooperate with each other to make forex broker regulations and to provide forex regulatory status to the local forex brokerage houses. Banque de France, ACP (Autorite de Controle Prudential), Autorite des Marches Financiers are the three official bodies who make forex regulations in France. But France is not a strong place to start forex trading or do forex trading to the forex and CFD brokers. Because even their own country people love to do trading with offshore places rather than their local ones. They offer a highest forex leverage of 1:30.

Forex Regulations in Germany

FFSA (Federal Financial Supervisory Authority) is the main forex broker regulatory body in Germany. Their maximum forex leverage is 1:30 which is specified in the forex broker regulations. Germany is not a popular venue to do forex trading or CFD trading because most of their local traders prefer to trade with famous and popular offshore brokerage houses in the US, UK, and Australia rather than with their local ones.

Forex Regulations in India

Reserve Bank of India (RBI) is the main authority to make forex regulations and provide forex regulatory status to the local brokerage house in India. But there are some pre-conditions to do trading in India which are mentioned in the forex broker regulations of RBI. If the base currency of the trading is Rupees and the counter currency is USD, GBP, JPY, or EUR, only then forex trading will be legal for the residents of India. But most of the traders can’t maintain all these forex broker regulations and therefore they take the services of some renowned offshore brokerage houses. For this reason their domestic forex market industry are losing their existence. Even their maximum leverage is zero.

Forex Regulations in Malaysia

Malaysia is another country alongside India where the maximum leverage number is zero. Bank Negara Malaysia is the main forex regulator in Malaysia. But they don’t allow trading with offshore or foreign brokerage house in Malaysia. In fact, it is illegal according to their forex broker regulations. Still the laws and regulations regarding these are grey and for this reason people find the space between them to do legal trading with foreign investment. Malaysian brokers and brokerage houses can’t attract foreign and offshore clients to do trading with them because of their strict regulations and zero leverage.

Forex Regulations in Russia

The Commission on Regulation of Financial Markets Participants Relationships is the official regulatory body who provides all the forex regulations and trading approvals. They were a quite popular offshore trading venue earlier. But because of some scandals and corruption in the market, they lost their appeal in trading. Therefore, they can’t attract the same amount of offshore traders they used to do before.

Forex Regulations in the UK

FCA (Financial Conduct Authority) is one of the best regulatory bodies in the world. They provide strict and specific regulations for both the local and offshore brokerage houses and therefore people find incredible interest in trading there. They are also the oldest and most famous offshore place to do trading. Actually, London is the forex capital of the world as well. Their maximum offered leverage is 1:30. They also offer high spreads betting, forex trading platforms, and great amount of profits to their clients. For these features, they are extremely popular to both the offshore and local traders. London will always remain an attractive venue for the traders all over the world.

Forex Regulations in the US

United States have five different regulatory bodies which work together to provide forex broker regulations and forex trading approval to both the offshore and local brokerage houses. Commodities and Futures Trading Commission, FINRA, New York Stock Exchange, Securities and Exchange Commission (SEC), Office of the Controller of the Currency are the five best forex regulatory bodies in the US. Their maximum forex leverage is 1:50. The US forex broker market is immensely popular all over the world and you will find the top 10 forex brokers and the best forex broker in the world here. Though the forex broker regulations in the US are quite strict but still people get attracted by the cash flow of the US forex market.

Final Thoughts

Once a broker is regulated under the official regulatory body of that country, it will need to show it on its website transparently. You will understand whether this site is a regulated or an unregulated forex broker just by visiting the site. It will be quite beneficial for both the newcomers and the veterans of the trading market as they don’t have to spend a lot of times on research and checking. Even you can check all the regulatory forex brokers list from the official site of the regulatory body of your country. This list will be available for the public on their website all the time. If your checked site of the broker doesn’t have any regulatory status on their site, then take it as an unregulated one and skip it right away and trade with the best forex brokers.