Foreign Exchange Regulation

Why Does It Matter?

Foreign exchange regulation is a form of financial regulation specifically aimed at the Forex market which is decentralized and operates with no central exchange or clearing house. Due to its decentralized and global nature, foreign exchange market has been more prone to fraud and has been less regulated than other financial markets.

However some countries do regulate Forex brokers through governmental and independent supervisory bodies, for example the National Futures Association and the Commodity Futures Trading Commission in the US, the Australian Securities and Investments Commission in Australia and the Financial Conduct Authority in the UK. These bodies act as watchdogs for their respective markets and provide financial licenses to financial companies that comply with local regulations. They protect investors, maintain orderly markets and promote financial stability.

Poorly regulated financial companies have the potential to undermine the stability of the financial system and harm consumers. This is why trading the Forex market via regulated and reputable broker is essential.

In summary, developed countries have a stronger governance over these Forex brokers. Trading with brokerages without a strong governance carry potential risks as they do not offer protection to consumers.


Checklists for Choosing a Broker

Due Diligence

Fit and Proper

The management team should be fit and proper, possesses relevant experiences, competent and complies with the regulator to carry out brokerage activities.

Base Capital Requirement

A forex broker is required to maintain financial resources which are in excess of its total risk requirements as set by the regulator. The high base capital requirement reduces fraudulent and bucket shops from entry.

Authorized Personnel

Registered and authorized financial representatives must possess relevant certificates and licenses in order to carry out business for the firm.

Safety of Funds

As required by law, client funds are at all times kept separate from the firm’s capital. They are held in custodian account with leading banks in respective jurisdiction. This ensures safety of funds.

AML & CFT Compliant

Brokers who comply with the AML and CFT law mitigate the adverse effects of criminal economic activities which promote integrity and stability in the financial markets.

Licensed and Regulated

Licensed and regulated Brokers are authorized by respective agencies responsible for regulating financial markets. Stay away from offshore Brokerage trading platform as there will be no recourse in the event of dispute.

International Business Company

Xeconds Strategy

Xeconds Strategy Ltd is incorporated in St. Vincent & the Grenadines as an International Business Company (IBC) with registration number 24144 IBC. 

The objects of the company are all subject matters not forbidden by International Business Companies (Amendment and Consolidation) Act, Chapter 149 of the Revised Laws of Saint Vincent and the Grenadines, 2009, in particular but not exclusively all commercial, financial, lending, borrowing, trading, service activities and the participation in other enterprises as well as to provide brokerage, training and managed account services in currencies, commodities, indexes, CFDs and leveraged financial instruments.

  • Authorized to provide managed account services in CFDs, currencies, metals, commodities and indexes.
  • Appoints and trades only with well-known Brokers licensed and regulated by the Australian Securities and Investments Commission (ASIC).
  • Does not collect nor accept clients’ monies.

Technology and Broker Partners

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Xeconds Strategy Ltd is incorporated in St. Vincent & the Grenadines as an International Business Company (IBC) with registration number 24144 IBC.

Risk Warning: Trading leveraged products such as Forex and derivatives may not be suitable for all investors as they carry a high degree of risk to your capital. Please ensure that you fully understand the risks involved, taking into account your investment objectives and level of experience, before trading, and if necessary, seek independent advice. Please read the full Risk Disclosure.

Disclaimer: Any advice or information on this website is general advice only- It does not take into account your personal circumstances. Please do not trade or invest based solely on this information. By viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Xeconds Strategy, its employees, directors or fellow members.