In several recent studies, researchers have found that very few investors know whether the broker they are trading with is a regulated broker or not. This figure is concerning, considering that the regulations are in place to protect trade and promote honest trading in the foreign exchange market. The importance of determining if your broker is a regulated broker is critical, and something that you shouldn’t overlook.
What are Regulated Brokers?
Fundamentally, regulated brokers like EuropeFX are responsible for following the standards set by their regulatory body. Regulated brokers must register with and be authorized by their governing body to be officially registered. Registration ensures that the quality standards are met by each broker. A broker who is not registered often does not follow the quality regulations required to be a registered broker, and therefore has lower quality trades than their registered counterparts.
The essential difference between EuropeFX and other regulated and non-regulated brokers is one of a quality difference. But why is quality control important to trade? Well, the yearly auditing of regulated brokers is important to the quality of trades. The business conduct of brokers is subject to more scrutiny, and therefore is more likely to be of a higher quality. They are often required to take the regulations laid down by their regulatory body and use them in their trading.
These behaviors manifest themselves in regulated brokers ensuring the availability of funds, so that their customers can receive a refund if the company goes bankrupt. If a broker is not registered, they often do not have these funds on hand, making investing a bigger risk than it has to b
The main features that distinguish regulated brokers like EuropeFX from unregulated ones are the concerns of customer safety. The licensing of brokers ensures that rules are being followed and risks are being minimized. Dealing with unregulated brokers can easily lead to customer bankruptcy, while dealing with regulated ones means that the foreign trade transactions will always be safely completed.
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