What is a forex broker ?
The market today has advanced to greater levels that have seen to carrying out trade in other countries. The different countries that the trade is being carried out use different types of currencies. The trader must have that type of currency that is being used so that the business can be a success. A forex broker is a company that deals with the exchange of the currencies in the stock exchange market. The company acts as an intermediary between the trader and the market. Forex brokers have been termed as the best people that can help a seller and a buyer to make an easy and faster transaction. They are faster than the banks. The brokers offer platforms that the seller and the buyer can chat without meeting in person. All the negotiation that is needed is done by the forex brokers. They are well conversant with the market and they know all the needs that require to be met.
The forex brokers are also well conversant with the currency pairs. They know the best currency, which a trader needs to use so that, he or she can minimize the cost while maximizing the profit.
Financial Conduct Authority (FCA)
The Financial Conduct Authority is a company that deals with the regulation of how the forex brokers carry out their job. The brokers need to have rules and regulations that govern them so that they may not exploit the traders. The board also carries out the supervision work. This is done to follow up with the business and check if it is following the legal business rules.
The brokers must be registered under the Financial Conduct Authority in the UK so that it can be easy to monitor them. Traders who are new in the market may fall in the hands of the scammers without knowing them. A new trader needs to have information on the brokers that there are so that they get the best. There are reviews that are made online that help the new trader to know the broker that is trending. The reviews are made by business people who have experienced the services that are offered by the brokers.
This company is under the government. This means that, it has been mandated by the government to control the financial processes that happen in that country, for instance in UK. Businesses that are operated in the UK need to be regulated by the Financial Conduct Authority. This is to make sure that, they are operated in a legal way. The intermediaries that come between the seller and the buyer need to be regulated so that they can offer legal services to the business people.
Why Forex Brokers in UK Must Be Regulated By Financial Conduct Authority
In the UK, there has been known to be many brokers that carry out the exchange process. The common currency that is in use in UK is the dollar. The USD has been a common currency that has been used as a currency pair. The strength of a currency of any country is most compared against the USD.
There are reasons why the forex brokers in UK must be regulated by the Financial Conduct Authority. As a trader, you need to know why they are regulated so that the business that you are carrying out can be successful when you use the services that are offered by the brokers.
With the advance in technology, new ways of stealing from the business people have been devised. The brokers look for the traders that are new in the market and have no experience with any broker. This is to be able to extract more money from them before the traders know what is required of them.
Reasons why forex brokers must be regulated
Regulations give the platform for any business person to carry out the business in a legal way. The Financial Conduct Authority has to regulate them so that traders can avoid falling into the hands of the unauthorized brokers.
When forex brokers have been regulated there is accountability. Accountability helps the brokers to make sure that all that they do they have an explanation. This way the brokers will not mislead the traders. In the UK there is a list that can be found in the internet that has the brokers that have been registered and have shown accountability. Everything that these brokers do can be accounted for by the regulating company. This shows that the broker can be liable in all that they do for your business.
Forex brokers that are regulated offer their clients a good platform for communication. The business person gets communication that is clear making them to know what is expected of them. The way that they are treated is very fair and equal. There are no instances of favors or racism as it is experience in other banks. No discrimination is experienced when one involves the registered brokers. All the clients are treated the same as there is no one that is superior to the other despite the business that is being carried out. This means that they are obliged to work on all the interests that the business person has.
When one is involving a forex broker that is operating overseas, it becomes easier as globalization is enabled. One will be able to trade with other countries with the help of the registered broker. When a business goes globally, it is able to reach its target goals as well as reach many people all over the world.
The other major reason is that, there is security. All business people need to be secured. This is to make sure that the chances of being conned are very low. When a business is secured it can be able to go to greater heights. The more it is secure the better it is in terms of making profits and reaching to many people.
In conclusion, forex brokers need to be regulated so that the business people can get enough security when they involve them. A broker that is accountable to his or her work becomes more liable and attracts more clients to them. The Financial Conduct Authority has regulated the brokers in UK so that businesses can be carried out in the best way possible.