Forex Regulations

One of the most important criteria for traders when choosing a Forex Broker is the regulatory status of the broker and under which regulatory body it is governed. Brokers who conduct business without regulation do so at their own discretion and pose a direct risk to the security of their clients’ money.

There are Forex regulation organizations in many different countries but often a Forex broker will receive only a local licensing until the valid regulation comes through. This can take quite a bit of time as Forex broker regulators delve deep into the fiscal condition of the brokerage and thoroughly investigate the past experience of the CEO and other key figures in the firm.

Some of the more recognized Forex regulators are FSA located in the United Kingdom, CySec out of Cyprus and the SEC in the United States if the broker is permitted to trade to American clients. In addition to a local Forex regulation, some brokers find it important to acquire memberships from professional and governmental bodies such as Markets in Financial Instruments Directive (MiFID), a European Union law that provides harmonized regulation for investment services across the 30 member states of the European Economic Area and the Investor Compensation Company Limited (ICC), a subsidiary of the Securities and Futures Commission which was established to provide adequate funds out of which eligible investors of failed investment firms are compensated.

If a Forex broker is regulated, the name of the Forex regulator should be transparently listed somewhere on the broker’s website. Oftentimes this is not so readily found and a trader must turn directly to the broker for this information or can look for the information on one of the available of online websites that list Forex brokers and their Forex regulation. In an effort to simplify this search, DailyForex.com offers you a complete alphabetical list of regulatory organizations according to the countries where they are located.