Despite the fact that the forex market is the largest financial market, it is still largely unregulated in many regions. Though, it is important to note that there are international and local forex regulators that monitor the activities of forex brokers in certain regions or countries. To trade forex, retail traders need forex brokers to act as intermediaries between them and the securities exchange. It is important for traders to only trade with brokers that are regulated in the region they reside in. This is because there is no global forex regulator and existing forex regulators will only protect traders that reside in the geographical jurisdictions they operate in.
How Is The Forex Market Regulated And Who Regulates It
It is totally fine to want to trade with the best forex broker in your country which may or may not be the most regulated forex broker in the world. Before we dive into the top forex regulators and find out the most regulated forex broker in the world, it is important to understand the true meaning of regulation in the forex market. The role of forex regulators is to ensure brokers in their region compile with license requirements. Also, forex regulators monitor compliance during trading and other transactions and reserve the right to revoke a broker’s license if the broker violates the set regulations. Some traders are not aware of forex regulations and are only seeking brokers with low trading fees like spread. It is a great idea to trade with a low spread forex broker but forex regulation is an even more important criterion. Your trading funds are guaranteed to be paid even if a regulated broker goes bankrupt. This is possible because all regulated forex brokers are mandated to create a compensation fund that is controlled by the forex regulator in a region.
The Top Forex Regulators In The World
There are quite a number of bodies that claim to regulate the forex market but in this article, we are only interested in the top forex regulators in the world that truly matters. These are forex regulators that have proven to have real control over forex brokers’ activities.
- In the USA, there are two major forex regulators. These are the Commodity Futures Trading Commission of the USA (CFTC) and the National Futures Association of the USA
- In the United Kingdom, the main forex regulator is the Financial Conduct Authority (FCA)
- In Australia, the leading forex regulator is the Australian Securities and Investments Commission (ASIC)
- Another major forex regulator is the Cyprus Securities and Exchange Commission (CySEC) in Cyprus
- The International Financial Services Commission (IFSC) is another top forex regulator in Belize
- In South Africa, the forex regulator is The Financial Sector Conduct Authority (FSCA), this regulator overwatches nearly all leading forex brokers in South Africa.
- In Malta, the Malta Financial Services Authority (MFSA) regulates activities in the forex market
- The Financial Services Commission BVI (FSC BVI) is a major forex regulator in the Virgin Islands (Great Britain)
There are still other financial regulators across the world that are not listed above because they are not among the well-known regulators. The forex regulators listed above are the ones that really matter as they have noticeable control over forex brokers’ activities in the financial markets.
The Most Regulated Forex Broker In The World
Let’s check out some of the most popular licensed forex brokers in the world and try to pinpoint the most regulated forex broker in the world.
- Etoro is licensed by FCA in the United Kingdom, CySEC in Cyprus, and ASIC in Australia
- Exness is regulated by FSCA in South Africa, CySEC in Cyprus, FCA in the United Kingdom, and FSC in British Virgin Island
- FP Markets is regulated by ASIC in Australia and CySEC in Cyprus
- AvaTrade is regulated by ASIC in Australia, FSCA in South Africa, and FSC in the British Virgin Islands.
- Forex.com is licensed in the USA by CFTC and NFA, by FCA in the United Kingdom, and by ASIC in Australia.
- XTB is regulated by FCA in the United Kingdom
Popular forex brokers always ensure they are regulated by top forex regulators in the regions they operate in. From the above list, Exness has the most forex regulation in Europe and Africa while Forex.com has the most forex regulation in the USA.
It is very easy to check out if a broker is truly regulated by any regulator. All you will need is the license number issued by the forex regulator to a specific broker. You can easily find any broker’s regulatory license number(s) in the disclaimer in their website’s footer section. If you don’t find the license number in the footer section, you can contact their customer support team to provide the information. When you have the license number, simply visit the regulator’s website and search for that license number. If the license number is genuine, the search on the forex regulatory website will confirm it.
Conclusion On The Most Regulated Forex Broker In The World
There is no global forex regulator. Instead, we have forex regulators that operate in different regions and/or countries. From our list of some of the top regulated forex brokers in the world, Exness has the most forex regulation in Europe and Africa while Forex.com has the most forex regulation in the USA.
