Without a Centralised Regulator, How is Forex Actually Regulated?

Being systematic is a way to keep things under control no matter what industry it is. The currency market is unlike the stock market wherein a centralised regulatory body oversees its operation. However, this does not mean that forex regulation is not present.

A complete system of checks and balances guards the forex market to ensure that it is a safe place for investors and traders, be it financial institutions (also known as the big players) or retail traders. These controls include the establishment of both legal and financial standards. Regulators are the main surveillants of the forex market.

As mentioned in our article yesterday, there are two different levels of regulators, namely, the onshore regulator and the offshore regulator.

Read this post here for their respective features: https://www.wikifx.com/en/newsdetail/202210063194423230.html

Forex market regulators establish guidelines for forex brokers to follow. These rules protect investors and keep the trading floor in order.

The regulator is tasked with conducting periodic audits, reviews, and inspections of forex market participants financial, legal, and customer-related activities. These guidelines require brokers to follow a set of fair and ethical rules. When these guidelines are not followed, a regulator has the authority to impose penalties on the erring broker.

Forex regulation is carried out in accordance with the laws of each jurisdiction. These laws specify various requirements for a forex brokerage, and some of these regulations differ from one jurisdiction to the next. Some fundamental standards apply to all areas or regions of forex regulation.

However, not every forex broker seeks to play according to the rules. Many forex brokers are scammers in disguise who operate with neither a regulatory status nor any valid licenses. They set up these brokerage companies to lure their victims into depositing money before disappearing on them or forbidding any form of withdrawal.

Hence, it is of utmost importance to always consider the regulatory status and licenses held by a forex broker before engaging their services. To do this efficiently, simply download the free WikiFX mobile application and pull up the profile of your broker in concern.

WikiFX is a global forex broker regulatory query platform that holds verified information of over 39,000 forex brokers while collaborating closely with several national regulators around the globe.

Above are examples of trustworthy forex brokers – they have high scores, are regulated, and possess valid licenses.

These are examples of unregulated forex brokers that WikiFX would not recommend – not much verified information could be found about their existences; they are not regulated; do not possess valid licenses; have low scores.