It is actually surprising that a lot of traders do not know if the broker they are dealing with is regulated or not. According to a reliable source, many traders are just after the money the forex market has to offer and are more or less concerned about their broker’s compliance to regulations. In this article, the focus will be on how to identify regulated brokers, but before that, who is a regulated broker?
WHO IS A REGULATED FOREX BROKER?
A regulated forex broker is a broker (or brokerage firm) registered with a regulatory body and conducts business according to the standards set by the body. It is one thing to be a broker, and it is totally a different thing all together to be a regulated broker. Regulated brokers are bound by the standards that guide them, they are expected to operate in a specific manner they are in line with the regulations that are set in place by the relevant regulator. These rules go a long way to show that the broker is
- Not a scammer, and can be trusted with a trader’s investments
- Certified to be a broker in the forex market
- Answerable to higher authorities in case of any misunderstanding with clients
- An efficient broker that does not combine company resources with clients’ investment funds. This meant that even if any unforeseen circumstance should arise and the broker had to lose money or close down business, it will not affect the clients’ funds.
To traders, the most important thing is that their broker is good at his or her job, not a scammer, and does not bring ill fortune upon their clients. Regulated brokers are all that and more. This and more is why it is important that traders deal with brokers that are regulated.
HOW TO KNOW IS A FOREX BROKER IS REGULATED
The simplest way to find out if a broker is regulated is to carry out a research about the broker. Usually, the broker’s website will display the broker’s qualifications as well as other things. Lack of this information on their sites simply means they are not regulated. Also, it is to the benefit of the trader not to take the broker’s word for it. Traders should always take out time to double check to make sure the make sure the broker is really regulated. This can be done by checking out review websites about forex brokers and regulations, as well as checking with the regulatory body’s website.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.