As defined by Wikipedia, a forex company, also known as foreign exchange company or forex broker is a company which offers the exchange of currencies and international payments to individuals and private individuals. Forex Company is typically used for the exchange of currency through the offering of a physical delivery rather than a speculative trade. The physical delivery of a currency to a bank account is a very good example of this.
It should however be noted that forex companies are normally different from the companies that transfer money or remittance companies and bureau de change since they physically perform high-value-transfer unlike the other money transfer counterparts that mainly focus on the high-volume low-value transfers generally engaged in by economic migrants who want to go back to their home country or to make cash available to travelers who need to transact business in another currency different from their local currency. Transactions by forex companies can either take the form of forwarding transactions or spot transactions.
Based on the statistics posted by Wikipedia, the total number of foreign exchange companies has received a steady increase in countries such as India, Uganda, United Kingdom, Australia, and the United Arab Emirates. This is largely attributed to the increase in the volume of foreign trade and in the improvement in the communications systems and greater access to the international exchange markets which necessitates the need for a transaction in a foreign currency.
In India alone, the total volume of transactions in the forex market amounts to about USD 2 billion per day. Based on the 2016 statistics as posted by Wikipedia, the local Forex market in Australia was the eighth largest in the world and the AUD/USD was pinned as the fourth most traded currency pair in the world. According to the World Bank report, the forex business in the United Arab Emirates has experienced a steady growth in 2014 as they had a remittance of nearly five percent to $29 billion.
Based on location, there are several laws guiding the establishment and running of forex companies and these companies are bound by these rules and regulations. A failure to abide by these laws can lead to the seizing of operation license from the broker. The regulating bodies are also responsible for protecting the customer’s investment by guiding them against fraud in the forex market.
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