Forex Regulations & Forex Broker Regulation

Forex Regulation – Forex Regulatory Organizations

Foreign Exchange market popularly known as Forex market is one of the largest and most active liquid cash markets of the world. They offer several trading opportunities to their traders so that they can make some profits all around the world. But when people get an opportunity to make money, they also try to take unlawful advantages of that opportunity. And therefore, forex broker regulations are really very important in the forex market. Otherwise, traders will face huge risks while using MetaTrader 4 forex brokers and MetaTrader 5 forex brokers, if they are not regulated under the supervision of their specified authority. If by any chance forex brokers don’t have to create any established standard, then they can become more dangerous, unethical, and illegal as well.

You can’t rule out the chance of fraud in trading if there are no fixed forex regulations. Forgery, cheating, fraudulence, etc. behavior will repeat over and over again. You won’t be able to solve this issue because in some cases you can’t even take legal action against the broker who doesn’t follow forex broker regulations. Thus forex broker regulations are really important for all the traders and best forex brokers out there. If you trade with a broker who follows forex broker regulations, then the authority will ensure all the business standards to help you get the best interests as well as all sorts of financial protection. While selecting a broker, always look for authentic, licensed, regulated, registered, and authorized one of your local area. While checking on its forex regulations, you must know about its regulatory body as well. Because regulatory bodies don’t follow the same pattern or type of financial protection.

Regulations by Geography

In this current world, people have become quite serious about their own rights and interests. Therefore, regulators follow strict policy to protect traders by enforcing tight and precise regulations all over the world. They oversee each and every move of the traders in the forex market and in case of any issue or problem, they strictly follow their regulations with zero-tolerance. This ensures a safer environment for the traders throughout the world. Some of the famous regulatory bodies over the world are:

  • SEC – US
  • CySEC – Europe
  • FSA – UK

Usually, forex brokers deal with the best financial institutions and farms so that they can keep their client’s money, capital, and funds in several accounts. They also need to fulfill all the criteria mentioned in the forex regulations. They also need to fulfill both the fiscal and capital requirements asked by the local authority to become a regulated broker.

Forex Regulations in the US

The United States is the second largest forex market of the world who has a forex turnover around 20% of worldwide OTC. They are a very important sales desk for the current forex market. To regulate the forex markets of the US along with other OTC markets and derivatives, there will be two fixed regulatory bodies named NFA and CFTC. These two regulatory bodies work together with each other to ensure a secure forex market with proper forex broker reviews and forex broker regulations. So that traders can get the best forex broker in the world for themselves.

The famous National Futures Association (NFA) always tries to help the investors to trade in a more protective environment in the forex market. They also work to uphold the respect, trust, and faith of their members to their regulations through following their regulatory duties and responsibilities. It also ensures a better forex market for the traders which possess more integrity and have the courage to fight frauds and scams by practicing financial regulations. They work along with the Commodity Futures Trading Commissions (CFTC) to ensure the forex broker regulations in the market. They fight all the systematic risks of the non-regulated brokers together and ensure their traders the best quality and authenticity of forex institutions which are also regulated by them. Forex brokers in the US must follow some specific rules in order to be regulated under NFA and CFTC. Some of them are as follows:

  • Hire a team full of experience and skilled staff.
  • All the numbers and facts should be real in all the advertisements and promotional activities.
  • Allow the maximum leverage of 50:1.
  • Ensure not to open positions against your own clients.
  • Submit monthly reports as well as financial statements of your brokerage house to NFA so that they can publish them for the betterment of public traders.
Forex Regulations in the UK

FCA (Financial Conduct Authority) and PRA (Prudential Regulation Authority) are two of the main regulatory bodies in the UK for having forex broker regulations. They issue forex regulations for all sorts of forex brokers in the UK. They have a forex turnover around 40% of global OTC. They always work to protect traders from being affected by any scams, fraudulent, financial malpractice, etc. in each and every forex broker reviews of the UK, you will find the top 10 forex brokers are regulated by either FCA or PRA or by both of them. But to get regulated by them, every brokers need to get through some very strict guidelines first of all which are as follows:

  • Must possess a capital of 1,000,000 pounds in operation.
  • Regular and timely submission of all the audit reports and financial statements.
  • Ensure the protection and secure the funds of the financial clients and traders by taking services from the compensation scheme.
Forex Regulations in Australia

Australia is another great place for doing forex trading as their forex regulations are formatted for the better and secure forex market for them. Here the ASIC (Australian Securities & Investments Commission) is the chief regulatory body who supervises all the securities, investments, transactions, and insights of the forex markets in Australia. But it still works with some other organizations, institutions, and regulators to provide a safer and better forex market to the traders so that their capitals can be protected. Here are some of the tight forex broker regulations to get regulated under ASIC:

  • Your operating capital should be AUD 1,000,000.
  • You should have a representative office in Australia.
  • You should comply with all the specific regulations mentioned in the website and follow all the obligations precisely.
  • You should also possess a PI (Professional Indemnity) insurance cover.
  • You should submit all your financial and audit reports in time with total transparency.
  • You should also work together with a tier-1 bank so that you can keep your client’s money in several accounts.

Forex Regulations in South Africa

Forex regulations in South Africa were maintained and regulated by the FSB (Financial Service Board) earlier. But now it is regulated by the FSCA (Financial Sector Conduct Authority) and their main aim is to protect investors and traders from losing their money through a scam and fraudulent trading in the forex trading platform. They provide the traders a transparent, safer, and trustworthy trading environment. Though FSCA is a quite new regulatory body but still it has shown immense success in the forex market of South Africa. They put emphasis on the integrity and efficiency of the financial records of the brokerage house.

Forex Regulations in Europe

There are numerous regulatory bodies available throughout Europe. FINMA, FSA, FMA, CNMV, MFSA, CMVM, BaFin, AMF, CySEC are some of the most popular and renowned regulatory bodies of Europe. All the members of the EU (European Union) possess their own forex market and their own forex regulations under their regulatory bodies. Among them CySEC has the jurisdiction to become a regulatory body of many European countries. Here are some of their forex regulations as follows:

  • Brokers should initiate their journey with a capital of 200,000 pounds.
  • They should keep their operating capital to a minimum of 750,000 pounds.
  • They should submit all their regular audit reports and financial statements.
  • They should ensure the protection of the funds of their clients by keeping them in segregated accounts.
  • They should also be in touch with a compensation fund so that the traders can have a proper risk management system of their own.


As the forex market is going up and getting recognition from all over the world day by day, acts of cheating, fraudulent, and scam are increasing as well. Forex markets often witness huge losses of the traders because of this type of unnecessary and unlawful trading activities. To protect the market, traders, and investors from this, you must choose a best forex broker who is under their local forex regulatory body. Forex brokers who follow forex broker regulations are likely to offer their traders and clients a safer environment so that they can do trading under the provisions of the regulatory bodies.

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