Financial Market Regulators
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Thread: Financial Market Regulators

  1. #1
    Super Moderator Gulfstream's Avatar
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    Financial Market Regulators

    Active development of economic relations, the emergence of new segments of the financial market and a steady increase in the number of participants, helped to create a set of rules, regulations and regulatory framework that would regulate this relationship.

    But the presence of all these rules and regulations, without specially created organization that oversee their continuous compliance, it would be insignificant. That is why, for the coordination and oversight of financial market participants, the organizations were created - regulators, one of the priorities of which was to protect the rights and interests of non-professional participants of the financial market. This task is achieved through well-designed mechanism of regulators.

    However, it should be noted that not all segments of the financial market were equipped with an effective regulatory tool. Unlike the stock market, in the Forex market is no specific regulation. This is due primarily to the fact that the Forex market has no central headquarters, as well as any reference to the geographical area.

    Forex market is an international universal network that consists of a large financial-credit and brokerage companies, dealing centers and other organizations and individuals that provide various kinds of services in the sphere of the speculative activity.
    But despite the lack of a single regulator, some economically developed states have created at the relevant authorities governing the activities of the participants in the Forex market, as well as affecting their financial policies.
    However, some of these regulators have gained not only national but also international status. The possession of such a license regulator provides more benefits to its owner over other market participants specialized finance, for a company with such a license, is more credible and others believe to be reliable.

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    Last edited by Gulfstream; 09-03-2015 at 11:58 AM.

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    Super Moderator Gulfstream's Avatar
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    US regulators

    US regulators

    The most influential and strict regulators on the international financial market are American organizational structure:

    NFA – National - is the self-regulatory organization, supervises the activities of all the US futures market and it is one of the most influential and largest regulator in the world financial market. The strictness of the requirements for a broker, licensed by NFA, allows the client of this broker to be in the execution of transactions, safety and the return of funds.

    SEC - U.S. Securities and Exchange Commission . is an agency of the United States federal government. It holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States. The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

    FINRA – U.S. Financial Industry Regulatory Authority. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry in U.S.

    CFTC- Commodity futures trading commission. The mission of the Commodity Futures Trading Commission (CFTC) is to foster open, transparent, competitive, and financially sound markets, to avoid systemic risk, and to protect the market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act.

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    Last edited by Gulfstream; 11-30-2015 at 08:39 AM.

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    Super Moderator Gulfstream's Avatar
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    European regulators

    European regulators

    Keep up with the US regulators and the European institutions, regulating the activities of participants in the financial market:

    FCA – The Financial Conduct Authority. It is a financial regulatory body in the United Kingdom, but operates independently of the UK government. This association is an analogue of the American Association NFA. The objectives of this regulator include: control for implementation of current standards on financial market, audit of regulated companies and the protection of their clients;to minimize possible financial risks, including the prevention of various fraud schemes in this area;Work on the development of innovative financial services. Investors of companies, licensed FCA, can be assured that their broker will comply with all statutory provisions and regulations, because they are under constant supervision of regulator.

    CySEC- Cyprus Securities and Exchange Commission. This commission supervises the activities of participants on financial market in the Republic of Cyprus. Companies that provide financial services,as well as international, licensed CySEC, are distinguished by their reliability and quality of services.

    BaFin - The Federal Financial Supervisory Authority. It is an independent federal institution which regulates the activities of financial service providers and ensures stable operation of the financial system in Germany. The objectives of this regulator include: preventing illegal activities in the financial market and the development of standards of conduct for its members.

    FINMASwiss Financial Market Supervisory Authority. It has a wide range of authority as responsible for the stable operation of the system of finance and investment protection, control for finance market participants, including the supervision of their compliance with legislation;prevent and eliminate illegal activities in the sphere of finance, standard-setting activities.

    ESMA -European Securities and Markets Authority. This institution combines all the financial market regulators of EU countries. The competence of the association include: safeguarding the stability of the European Union's financial system, issues arising in the area of financial market regulation, together with other European and US regulatory agencies;development of a single rule book in Europe on regulation of financial activity in the EU and monitoring their compliance.

    MiFID - Markets in Financial Instruments Directive. This directive is effective from 2007. This is the basis for the creation of a single European market.

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    Super Moderator Gulfstream's Avatar
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    Asia-Pacific and international regulators

    Asia-Pacific and international regulators

    Changes in the financial markets of the Asia-Pacific region led to the organization in the region, able to regulate not only the existing market sectors of finance, but also to re-create.

    The priority tasks of these associations are: the protection and monitoring of finance market participants, identify and prevent possible fraud in the financial sector.

    The most famous and highly influential regulators in the region are:


    ASIC – Australian Securities & Investment Commission. It is Australia’s corporate, markets and financial services regulator, which controls all participants and how they obey the financial markets law. ASIC has earned a reputation not only in Australia, but also at the global level.

    FSA- Financial Services Agency in Japan. It is government organization that controls the activity of the finance market participants. This agency is endowed with a rather large range of powers and is considered one of the strictest controls. Its main task - to monitor the participants of finance market in order to prevent fraud schemes in this area, which at one time had a large influx of the Tokyo Stock Exchange.
    The above regulatory authority NFA, CFTC, FCA, ESMA,MiFID and SIC and FSA are the most respected by regulators in the global financial market. They affect both the legislative activity in the field of finance and financial policy on the region.
    However, it should also be noted the important influence of international organizations, such as IOSCO.

    IOSCO -
    The International Organization of Securities Commissions. It combines the national regulators of the securities market . The main goal is to to assist its members in addressing legal and other issues relating to the activities of the coordination and regulation of stock markets.

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    Last edited by Gulfstream; 09-03-2015 at 11:56 AM.

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    Super Moderator Gulfstream's Avatar
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    Offshore regulators

    Offshore regulators

    In offshore areas, also, operate Financial market regulators.
    Some of the brokerage and dealing companies deliberately registered in offshore zones, in order to avoid excessive taxation. Firstly it is tax incentives, and secondly it makes the best condition for customer. By registering offshore companies, respectively, seek to obtain a license from regulators in the region.

    Those regulators are:

    FSC Mauritius - The Financial Services Commission, Mauritius. The FSC aims to: regulate the non-bank financial services sector and global business;take measures to prevent fraud in the financial sector; provide protection to market participants;developing a policy of financial regulation.

    FSC BVI - British Virgin Islands Financial Services Commission. The main tasks are: regulating of financial market and preventing money laundering. Requirement for license of this broker is more loyal comparing to US and European regulators.

    Of course, this article presents not all regulators of the financial market, but the famous organizations in the world.

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    Last edited by Gulfstream; 09-03-2015 at 11:57 AM.

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    Super Moderator Gulfstream's Avatar
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    General criteria inherent in the finance market regulators

    If you look at the whole structure of the regulatory bodies and their functions, we can highlight the following general criteria inherent in the finance market regulators:

    1. Regulators are non – commercial organizations
    2. They are government or self-authority organizations
    3. They have authority to control and regulate activities of financial markets participants
    4. The main tasks of this organizations, depending of authority, are:


    • preparing of standards and regulations to improve implementation of legislation in the field of finance;
    • licensing of companies that provide various kinds of financial services;
    • control and oversee the functioning of financial markets participants
    • protection of the rights and interests of the non-professional financial markets participants ;
    • conflict situations, as well as taking measures to compensate for damage caused by faulty actions of the licensee;
    • restriction to organization that violate established at the legislative level law in finance, approved standards and regulations
    • prevention of crime in the financial sector, and others.


    Considering the above factors, it s better to trust your money in safer organization, which has the appropriate licenses of the financial market regulators.

    Its better to give the preference to organizations who have a government license and regulators with worldwide authority. Because the level of protection provided and guarantees from state regulators above. But it doesn't mean that having a license self-regulatory organizations plays no role.

    To make sure that your chosen organization (broker and/or dealing center) is licensed by finance market regulator, you must perform a number of simple steps:


    • familiarize with license of chosen broker on the official web site
    • pay attention on kind of broker activity registered in the license (clarify that the right to engage in betting activities does not apply to activities regulated by the financial market)
    • check the license on the official website of the regulator
    • make sure that the legal address of the organization in the license is the same address,as in your agreement.


    Do not ignore these tips and choose a reliable broker.

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  7. #7
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    Very informative thread and then a better way of choosing a good forex broker. Well, roboforex already meet with the tips. Plus I have googled it and from what I see online I can rate robo 9/10. I rarely see so many brokers been regulated by the U.S NFA most probably because of the strictness but then it would give to any broker that does a good edge to win more traders. In addition, I have also read of some brokers that proves that regulations some times are waste of time. I wouldn't want to mention them here. But then your tips are spot on.

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  8. #8
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    This is very informative, it takes the wisdom of any trader to avoid a broker that is not regulated, and I have being trying to guide myself around what you have said as well. Forex traders are better of if they are doing trading with a registered and regulated forex broker, this will give them a better security on their fund. I hope that new traders would read this article before it is too late for them.

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  9. #9
    Trader techboy's Avatar
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    In my opinion, regulation in online trading is very important to protect the traders from fraud and unscrupulous activities of brokers, but the problem here is that most regulatory body except that are in the US and a few in the European union has no power to really prosecute those brokers that take away traders money, so it is very important that traders are very cautious in choosing the right broker in this industry.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

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    Trader lawners1791's Avatar
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    used to work with the nfa broker on restricting use on releasing usd on buying option to dissalow use of more with the same or hedging on closing without the rules of fifo and those works of still as running of less max order with the trading.

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