If you are a forex trader you should know what your broker's regulation is. There is a lot of regulation in the world.
If you are a forex trader you should know what your broker's regulation is. There is a lot of regulation in the world. Almost every country has its own regulation, if you are forex trader from United State you should be proud. We all know the US has one of the most solid and bona fide legal guarantees for the best forex broker, they are CFTC and NFA.
Be careful about selecting brokerage as it is one of the part strategies being a success. There are two major regulatory agencies in the United State that you should be aware of. These agencies totally useful to decide the quality broker. Lest's jump to it.
1. Commodities Futures Trade Commission (CFTC)
The agency is so popular in the United State and has licensed many brokers. CFTC was developed in 1974, which roles to protect individuals in futures and commodities trading. When the currency on markets is categorized as part of the future, this agency has the right to protect traders from all kinds of fraud.
Since 1974, this agency has done many changes and improving trading conditions and creating a level playing field for everyone. The main mission of this agency is to protect all kinds of market users who are related to the sale of a commodity, financial futures, and options from fraud, manipulation, abusive practices.
If you are a forex trader, the license from this agency shows a good signal. If a broker has been licensed by this agency, there is no doubt the broker has good quality. Before CFTC releases a license for brokers, there are several conditions that should be met. Shortly, this regulatory agency will help you determine if a forex company is reliable or trustworthy.
(Read also: Top 5 Best Regulatory Agencies In The World)
2. National Futures Association (NFA)
The next bona fide regulator in the United State is the National Futures Association (NFA). This is an independent self-regulatory organization for the U.S. futures and derivatives markets. We can call the Commodities Futures Trade Commission (CFTC) as a big brother and National Futures Association (NFA) as a little brother.
This organization strives every day to develop rules, programs, and services to maintain market integrity, protect investors, and assist members in fulfilling responsibilities for agreed rules. This is done in order for all members can do business publicly on the US futures exchange safely.
NFA's mission is to ensure futures industry integrity, protect market participants, enforce NFA's members to meet their regulatory responsibilities. In the United States, everyone who conducts futures or options on futures business with the public must be registered with the CFTC and a Member of NFA.
Briefly, investing and trading are the high-risk business. There is a lot of aspects that make the participant get robbed by illegal or unregulated company. So, that's why follow the guidance by a regulatory agency is important if you want to be an investor or trader.
These are the two main agents in the United States that you must follow to decide on the most qualified broker. When you want to choose a futures company or brokerage, the first thing you should check their regulation. If they have licensed by one of the agencies above, it must be a good company and worthy.