Forex is the largest and most liquid market on the planet. There is no centralized body governing the currency trading market, but on the other hand, there are several independent bodies which supervise forex trading around the world.
When choosing a forex broker, it is extremely important to choose the one that is regulated by a financial authority in a respected financial center. Below is the list of the most respected forex regulatory bodies all around the world.
1. ASIC (Australian Securities and Investments Commission)
Established in 1991, the Australian Securities and Investments Commission is Australia’s corporate, markets and financial services regulator.
2. CySEC (Cyprus Securities and Exchange Commission)
CySEC is the financial regulatory agency of Cyprus. Many forex brokers are based in Cyprus, which is not surprising considering the fact that Cyprus boasts the European Union’s lowest rate of corporation tax.
3. FCA (Financial Conduct Authority) – the UK
UK’s Financial Conduct Authority is deemed to be one of the most reputable regulatory organizations in the world. Its role is to regulate financial firms that provide services to consumers, and to maintain the integrity of the financial markets in the United Kingdom. It operates independently of the UK government.
4. CFTC (Commodities and Futures Trading Commission) – United States
The United States are home to some of the biggest forex brokers in the world. In this country, trading is highly regulated, and obtaining a license is associated with high costs. CFTC is a regulatory agency established in 1974, and it protects individuals in futures and commodities trading. Considering the fact that futures includes the currency market, the CFTC consequently protects forex traders as well.
Another regulatory agency in the United States is called National Futures Association, and its work is overseen by the CFTC.
5. BaFin (Federal Financial Supervisory Authority) – Germany
BaFin is the financial regulatory authority in Germany. This regulatory body supervises around 2,700 banks, 800 financial services institutions and over 700 insurance undertakings.
Other significant regulatory bodies include FINMA (Switzerland), Swedish FSA, AMF (France), DGCX (Dubai), BCSC (Canada), FSMA (Belgium), CSRC (China) and others.