CFTC Regulated Brokers

CFTC (Commodity Futures Trading Commission) is an independent federal agency in the United States government that was formed in 1974 to regulate the futures and options markets. According to the Commodities Exchange Act, the CFTC is tasked with fostering open, transparent, competitive, and good markets, avoiding systemic risks and protecting market participants, clients, and their funds from fraud, manipulation, and other crime.

Periodically, CFTC publishes a list of agencies that provide futures trading services illegally in the US. CFTC also prohibits forex brokers from offering investment schemes with fixed returns. The form of punishments imposed on violators of the CFTC regulations is divided into several levels, ranging by fines, freezing of activities, to permanent termination.

As the main regulatory body in the United States, CFTC has a superior data named CoT (Commitment of Traders). The CFTC Commitment of Traders was first published in 1962 for 13 types of Agricultures commodities monthly data. Starting in 2000, reports were released once a week. Since then, the contents of the report have also become more diverse, including information on forex futures trading. The CoT CFTC report is aimed at increasing the transparency of the futures trading market in the United States.

Here is a list of CFTC-regulated forex brokers:

Broker	Regulation	Max Leverage	Min Deposit
Forex.com Australia 1999	CFTC/NFA 0339826 FCA (UK), 190864 FSA (Japan), 1539 IIROC, May 10, 2012	1:200	$250	Review
OANDA Canada 1995	CFTC/NFA, 0325821 FCA (UK) 54257 FSA (Japan), 1571 Kanto Local Finance Bureau (Japan), 2137 MFSA, 18.12.2020	1:50	$1	Review
Interactive Brokers Australia 1977	ASIC 453554 Central Bank of Ireland, 23.12.2020 CFTC/NFA, 0258600 FCA (UK), 208159 Monetary Authority of Singapore, CMS100917 SEC (US), 8-47257	1:100	$10000	Review
IG Australia 1974	CFTC/NFA, 0509630 FCA (UK), 195355	1:50	$1	Review
Ally Invest United States 2009	CFTC/NFA, 0408077	1:50	$1	Review
FX Trading Pro United States 2018	CFTC/NFA, 0509828	1:50	$20	Review
AMP Global Cyprus 2018	BaFin 154811 CFTC/NFA, 0412490 CNMV (Spain), 4624 CONSOB (Italy), 4869 CySEC, 360/180 FCA (UK), 819311	1:50	$100	Review

Advantages and Disadvantages of Trading in CFTC Regulated Brokers

CFTC has been known as one of the most respected forex broker regulators in the world. Strict registration requirements, data transparency, and thorough supervision are the quality assurance of CFTC regulated brokers. To be able to obtain CFTC regulations, forex brokers must have a business capital of at least 20,000 USD, be willing to audit regularly (daily, weekly, quarterly, annually), place customer funds in segregated accounts, and promote honestly.

On CFTC regulated broker promotion material, it is common if we find the words "Forex trading is a high-risk activity. (Numbers of) traders experience losses when trading on this broker". That is a requirement of the regulator. That way, prospective traders will be more aware of the risks of forex trading. On the other hand, the broker will make maximum efforts to provide education to traders so that their reputation is good. This policy is also useful to dismiss the notion that the broker earns income from the trader's losses.

The disadvantage of trading at a CFTC broker lies in its less flexible trading conditions and the limited promotion. Maximum allowed leverage is 1:50, hedging is not allowed and FIFO rules apply. CFTC also prohibits its brokers from accepting clients from outside the United States, so many CFTC regulated forex brokers have alternative regulations. Also, registering on CFTC regulated brokers requires complicated data and client examinations, compared to off-shore brokers that simpler and newbie-friendly. However, those steps needed to ensure the client's fund safety.

If you are interested to open an account in one of the brokers in the list above, make sure to try the forex demo account before proceeding to register in the live account.