The forex market is a cross-border transactional business involving clients all over the world. Regulation is mandatory for the common interest of the traders & government business policies. This Regulation gets enforced on the brokers so that brokers can not cheat its traders or investors & partners.
Forex brokers usually get regulated or licensed from the operational countries. Multinational companies have multiple regulations as they operate from different countries.
Benefits
Forex market regulatory bodies, help traders from a legal aspect. Some top-level regulatory bodies hold the right to insured trader funds from brokerage bankruptcy via the client account fund segregation. Where the client’s funds are stored separately from the brokerage fund or company fund. Brokerage companies need to deposit a certain amount of the fund to the regulatory authorities.
So that if in future, a broker got bankrupt, then the trader can retrieve their money back from the broker with the help of forex regulatory authorities by law. Plus in case of any kind bad practice from the brokerage side, trader or investors can file a case against that broker.
Common issue
But there is one issue if you live in Australia & your broker got regulated from Europe. Then in case of any scam, you need to file a case under European law in a European court.
In such a scenario, case maintenance will be costly. Thus it is better to open an account with a brokerage service, who has an office in your country. So that you can easily reach over there in case of any dispute and file case under your country regulation.
Following are the all listed Forex regulatory bodies from different countries:
Conclusion
Broker regulated in your country:
It is always wise to choose a forex broker, who has a regulation under your country jurisdiction. This not just helps you in terms of legal aspects but also, you can communicate with the broker regionally.
Although as the forex business grows, nowadays most of the top forex brokers have regional marketing managers who can talk to you with your local language or mother tongue and can solve your problem efficiently.
Broker regulated outside your country:
If it is not always possible to get a broker under your country jurisdiction, in case, you can open a forex trading account with top international regulatory bodies like CySec. But from the legal aspect, if any scam happens, then you can need to file a case against that broker cross border or contact the regulatory bodies with your case.
If your forex broker is regulated under CySec, then you can complain to the authority with the link below:
External Link:
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