Forex brokers and their regulators are an important point in determining the status of a broker. It is very important that he has a special license, as well as information about who is implementing the process of its regulation.
In the event that brokers carry out their activities without regulation, they carry a potential danger to the money invested by clients.
When considering regulators that belong to the most recognized category, you should pay attention to the NFA in America, CySec in Cyprus and the FSA in the United Kingdom.
Many brokers are convinced that in addition to observing local rules established on Forex, there is a mandatory need for membership in government or professional bodies.
These include the market, which are regulated by the MIFID Directive. It contributes to the implementation of a process such as the regulation of all financial services that are provided in 30 countries that are members of the EU and ICC.
At the same time, ICC belongs to one of the companies of the commission, which works with futures and securities.
In the event that the broker went through the regulatory process, the name of the forex regulator should be provided on the web resource.
In most cases, the search for this data is quite complicated, so very often traders turn to brokers.
Before starting the registration process for a completely new organization, which will be used by the broker for his own work, you need to find answers to such very important questions:
Moreover, upon receipt of the answer to the last question, it will be possible to determine whether there is a need to obtain a full STP license.
If it exists, in case of risks, they will all be redirected to the liquidity provider or the banking institution that provides services.
An equally important nuance, which is also worth considering, is the amount of initial capital. This is due to the fact that each of the regulators sets its own requirements and indicators, which also need to be looked at.
In addition, it is worth getting answers to such an equally important question about what type of business will be used to carry out activities.
These include Fund Manager or FX Brokerage. In certain jurisdictions, such licenses will be considered different, and in some – the same.
In the event that similar activities have already been carried out before and there is already a ready-made customer base, then for organizing a business you can opt for a less burdensome and less expensive jurisdiction.
1) The capital of the organization is $ 20 million, the availability of the most detailed requirements for the reporting process and the huge costs of the maintenance process.
In the event that the payment sources are located in Japan or the United States, you need to prepare for the fact that the initial capital should be no less than $ 20 million.
At the same time, all contributions that are made by clients are not taken into account.
It is also worth preparing for the fact that very strict requirements will be put forward for reporting, monthly and annual duties will be very high, and also every month without warning the regulator will fall under the verification procedure.
2) Regulators, whose reputation is excellent, capital requirements are high, as well as moderate reporting and embezzlement aimed at the maintenance process.
Examples of such regulators are ASIC and MFSA, FCA and CySec. When considering such jurisdictions, the amount of capital should be no less than 100 thousand euros. Moreover, there are also mandatory requirements.
For retail customers, the ASIC license belongs to the category of “hidden gems”. Only some brokers have this type of license.
Specialists of Eternity Law International will provide you with professional services in full legal support, selection of documents and we will provide advice on this issue.