How to Check for Regulated Forex Brokers?
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New traders wishing to open their first forex accounts are usually the most vulnerable to fall prey to scam brokers. These days, many unlicensed brokers are seeking ways to get their hands on new traders’ money. They have devised ingenious ways to lure their victims to their traps. That is why it is imperative for new traders to know how to check if the offer for a forex account is coming from a regulated forex broker.
The following are ways to check for regulated forex brokers:
- Many forex regulators now insist that the forex brokers state their license number clearly on their website. This must be done conspicuously and not on some obscure section of the website where it may likely be missed. For instance, ASIC regulated forex brokers are classified as Australian Financial Services companies and must carry an AFSL number (Australian Financial Services License no).
- The websites of some forex regulators have internal search engines that assist the user to search for a forex broker’s status. A trader can type in the name of the forex brokerage and if that broker is regulated and licensed, the details of the broker, as well as its standing, will be displayed. In terms of standing, a broker may have an active license, or its operational license could have been suspended or withdrawn.
- Some forex regulators give periodic warnings about the activities of scam brokers.
- There are forex regulatory bodies that also keep an updated broker blacklist. This blacklist contains names of brokers that have had their licenses suspended or withdrawn, or have cases against them that have been proven beyond doubt.
A new trend that is emerging in forex cheating by brokers is to claim regulation in a country. Usually, these scam brokerages open an office in a country and claim to be licensed and regulated in that country. Traders should not fall for this. They should always follow the processes listed above to confirm the status of the broker namely:
- Use the search engines on the website of the forex regulatory body to scan for the information and status of the broker.
- Contact the regulatory body directly inquiring about the status of the broker.
- Check for the license number on the website of the forex broker and crosscheck this information with the forex regulatory body.
These things should be done before depositing money with any forex broker. It could literally save you thousands of your precious trading dollars.
Reprinted from Forexbonuses, the copyright all reserved by the original author.
Edited 05 Jan 2021, 11:20
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