For a good example of the type of regulations that exist and why regulating forex brokers is important have a look at the regulators in the US.
The main regulators in the US are the NFA – National Futures Association – and the CFTC – Commodity Futures Trading Commission. These are the two main Federal Government agencies that oversee currency trading. If your looking to trade with a broker that is regulated, Gain Capital, Forex Capital Markets or FXCM, and FXDD are all top rated brokers that happen to be regulated by the NFA and CFTC:
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| View All Forex Brokers |
US regulators, like their counterparts in other countries, work to ensure healthy competition among brokers and ensure fair and safe trading practices. They play an important role in enforcing laws intended to prevent market fraud and protect investors from unscrupulous market participants. The NFA and CFTC have jurisdiction across the entire US. They also have jurisdiction over brokers registered in the US but operating overseas.
Anyone dealing in futures contracts in the US has to register with the NFA and pay an annual fee. The NFA looks into any cases of fraud and complaints against brokers by traders and other groups or organizations. Before signing up with a broker it is important to find out if the broker is registered with the NFA by visiting their website. An NFA registered broker will have its entire history of complaints posted online. Any notices the NFA has sent the broker will be seen here too. A broker might not be licensed by the NFA or CFTA and could be licensed by a Canadian, Australian, UK or other recognized regulatory body. These regulators will have websites that you can visit to inspect the standing of the forex broker you are looking to trade with.
Think twice before opening a forex trading account with a broker that is not regulated by a government authority.
