The Regulation Aspect When Looking For A Broker

The Regulation Aspect When Looking For A Broker

Brokers are very important when you want to venture into financial trading they are the link or the platform connecting you to the market and ensure that your trading session is worthwhile. With the backing of technology, more so internet, the industry has evolved with online broker sites coming up. 

These trading sites are very convenient ensuring ease while trading. There are many factors you should consider when selecting a broker or a firm specializing in such services. Being an important link each consideration factor needs to be looked at with utter keenness.

One important factor is the regulation of the site or firm.

Broker Regulation

Broker regulation refers to the authorization of the firm to operate in a certain territory. The authorization is conducted by the legal financial authority in charge of the sector in the respective country. With many brokers going to the online domain, there has been an increase in the number of such sites and most may be fraudulent platforms.

To cub cases of fraud, the financial authorization authority is the final pass of verification to prove that the firms are indeed legitimate. Legitimacy is a mark of quality that guarantees the firms observe the set rules and regulations in offering trading facilities.

Before authorization, the company needs to meet some obligations which most of the time are accessible from the company’s fiscal reports. Passing this step is not easy and the firm needs to show compliance to the set rules. Credible companies receive authorization from other countries apart from their native.

The following are some of the areas that the authorization body looks at before granting an operation permit.

  • Proof of sufficient funds in financing their operation without depending on investor money.
  • Tax compliance and a commitment to remit taxes per agreed financial period.
  • Commitment to a clause where the company will not engage in any fraud in dealing with securities.
  • Commitment to corporate responsibility in their operations.
  • Customer welfare protection. This comes in the company ensuring the safety of funds entrusted to it.

Once the company has satisfied the concerned regulatory body in the above areas then it may be granted a permit to run its operations.

Why You Need To Sign Up With A Regulated Broker

The following are the reasons why you need to sign up with a regulated broker.

  • Safety Of Your Funds

You are sure of the safety of your funds when signing up to a regulated broker. This is one of the clauses that the firms need to meet and have measures in place in case of insolvency.

  • Transparency

The firms are also transparent in their dealings and won’t take part in fraudulent activities such as insider security dealings.

  • Enhanced Trading Environment

With regulation, you are sure of an enhanced trading environment where everything is clear such as the trading conditions. There are also minimal to no instances of hidden trading fees.

Notable Financial Regulators

There are several regulators in the world each native to its respective country. The following are notable examples.

  • The monetary authority of Singapore (MAS) is in charge of the financial markets and forex trading . It also acts as the central bank of this territory.
  • The Cyprus Securities and Exchange Commission (CySEC) is the body in charge of the financial market and services in Cyprus.
  • The greater United Kingdom financial environment is manned by the financial conduct authority (FCA).
  • The financial industries regulation authority (FINRA) is in charge of the financial markets system in the United States of America.
  • In Australia, there is the Australian Securities and investment commission that governs forex and financial trading within its borders.

These are some of the notable financial trading regulation authorities in countries that have a name in this vast field.


In conclusion, you need a regulated broker who you can trust to transact with. Being regulated is proof of credibility and shun of fraudulent activities that may affect your funds. Check on the regulatory bodies’ websites to see if your preferred broker is part of the regulated firms.

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