List of Brokers with CFTC Regulation

Due to CFTC's strict rules, trading in a CFTC-regulated broker would mean limited leverage (50:1 for major currency pairs and 20:1 for non-major currency pairs), no hedging from the same currency pair since the US regulator imposes the FIFO rule, and no bonus programs are allowed to be provided.

The reason for such prohibition is that CFTC considers leverage, hedging, and bonus programs as highly risky. Based on their previous cases, those three have the most potential in misleading new clients who don't know better.

The upside of trading with such strict regulation is that clients could expect the highest level of assurance in data security and funds safety. In case of suspicious broker acts, clients could always report to CFTC and be followed up with a settlement.

Since CFTC designates NFA to oversee forex brokerages, they have been directing clients to the NFA Basic Database to check their official members. Here's the simple guide:

1. Go to the NFA Basic Database.
2. Type the brokerage name in the available column, then click Search.
   
   
   
   
3. If your broker has been registered, there should be the "NFA Member Approved" statement in the Membership Status column. You could click on the broker's name to check further information about the broker.
   
   
   
   
4. On the broker's registration page, you could track the data, regulatory actions, decisions, as well as reparation cases (if there are any) that fell upon the broker.
   
   
   

Interestingly, CFTC also provides the RED List which consists of illegal brokers soliciting and/or accepting funds from US customers and offering a product within their jurisdiction. You can check them on this page and see more details on each entity.

The form of punishments imposed on violators of the CFTC regulations is divided into several levels, ranging from fines, freezing of activities, to permanent termination. Over the years, CFTC has frozen numerous fraud companies and expelled problematic brokers. Some of the cases that happened in recent years were:

• Sues on Binance for deliberate violations of their trading and derivatives regulations. The case has been brought to the US court and has yet to be settled as of August 2023.
• $45 million penalty on HSBC for manipulative and deceptive trading. The most highlighted of this violation is the use of WhatsApp Messenger for discussing deals
• $300,000 fine on GAIN Capital for ambiguous trades presented by Foremost, the brokerage's independent introducing broker.
• Civil Lawsuit against FXCM in consequence of the broker's under-capitalized state and failure to report their capital shortfall in a timely manner. This eventually led to FXCM's exit from the US market.

Comparing the Commodity Futures Trading Commission (CFTC) with other forex regulatory bodies involves considering factors such as the regulatory approach, investor protection measures, and the overall regulatory environment. Here's a comparison of the CFTC with a few other well-known forex regulatory bodies: