All You Should Know About Getting Forex License
Any trading element choosing brokers to work on the Forex market sees the availability of appropriate permission to be one of the key factors influencing the choice.
Therefore, everyone who wants to open a new brokerage organisation is concerned about the question: where would it be better to register a company and get a forex broker license?
Choosing an FX broker
Choosing such a partner for trading on stock exchanges should begin with collecting information about prosperous transactions and openness in working with clients. A good quality brokerage element has its own portfolio of transactions and a large number of customer reviews. The easiest way is to check the published lists of traders, which are constantly changing and updating. The trader with the most reviews will offer one of the safest working conditions. We also recommend that you pay attention to how the process of registering and depositing and withdrawing money from a particular firm is going.
Veracious FX provider
If a broker has a licence, it allows you to judge its conscientiousness and the degree of seriousness in its approach to trading. A licensed broker is more likely to settle all trades and make them profitable not only for himself/herself, but for the client. Nevertheless, in order to obtain a licence from well-known world communities or government agencies, a broker needs to seriously try to earn a certain reputation. If you see that the broker’s licence is issued by an unknown office located on a distant island, this is not the broker you should deal with.
Forex broker rating
On the Internet, you can find several independent ratings of popular brokers. Traders are sorted here by the number and quality of reviews, working hours and other important parameters. Here it is recommended to pay attention to the number of closed deals, the regularity of payments to clients, and not to the trading leverage or promised interest. In general, the first steps in cooperation with brokers are taken with caution, through small amounts. Hence the preference in favour of trading elements with expertise and safe conditions.
The most cost-effective jurisdictions with a high level of prestige
- USA
So, in order to work on the forex markets in the United States, a company needs to obtain a licence called Retail Foreign Exchange Dealer (RFED), the issuance of which is accompanied by a rigorous check of the company’s sources of capital, personal information of its owners, passing exams by key employees, and other procedures. Although the minimum net worth is USD 20 million, it is desirable that the broker can maintain a capitalisation level of at least USD 30 million. If this threshold is lowered, it will be necessary to notify the NFA each time. At the same time, all company reporting must be transparent, that is, the broker must make almost all data publicly available, including account information, etc.
This level of control allows the American regulator to immediately respond to any violations of customer rights. Even the smallest infractions can be subject to heavy fines.
- Switzerland
In fact, Swiss brokers with a Forex licence have the status of a bank and, as a result, they are subject to the same strict controls as banking institutions, which makes them reliable agents in the eyes of clients from all over the world.
- Great Britain
Despite lesser demands, the FCA UK financial BK licence is the most reputable in the world. In order to get it, you need to register a company in the UK. For this, such an organisational and legal form as a joint-stock company with limited liability (LTD) is best suited.
The FCA treats the Forex market as a bookmaker, which means quite serious requirements for companies wishing to obtain a licence here. For example, there are high requirements for the company’s personnel, in particular, for the director, who must prove to the regulator his/her understanding of this segment of the financial sphere, as well as confirm his/her occupational qualifications and expertise in this area.