American regulations
From June 5438 to February 2000, the United States passed the Futures Modernization Act, requiring all foreign exchange dealers to register as futures commission dealers (FCM) in the American Futures Association (NFA) and the American Commodity Futures Trading Commission (CFTC), and accept the daily supervision of the above institutions. Foreign exchange dealers who are unqualified or have not been approved within the time limit will be ordered to stop their business. The introduction of this bill has put online foreign exchange margin trading on the track of standardized development.
NFA is an industry self-regulatory organization. Relatively speaking, the investment industry in the United States is relatively mature and standardized. Therefore, when many investors choose a securities broker, the first thing to look at is whether this institution is registered and managed in the NFA, and at the same time, they will also inquire whether this institution has any public information such as bad records during its operation. This measure provides some convenience for individual investors to know the credibility of traders and plays an important role in artificially reducing risks.
NFA regulatory inquiry: Enter the NFA inquiry page and enter the dealer number you want to inquire. Click Query to easily check the dealer's supervision and related records.
British supervision
Financial Services Authority (FSA).
The above-mentioned government regulatory agencies have very strict security precautions for customer funds accounts: First, customer funds and working capital accounts of dealer companies are stored in banks separately. Therefore, dealers cannot misappropriate customers' funds, and even if the dealer company has financial problems, customers' funds will not be affected. Secondly, there must be an insurance company to carry out credit insurance for this custodian bank, and the insurance company will compensate customers for their losses. So in the worst case-the bank goes bankrupt, there are also insurance companies to compensate customers' funds. Finally, the customer's complaints and the dealer's handling results will be notified and permanently recorded, which can be found on the corresponding official website.
Therefore, if you are a foreign exchange dealer supervised by the above-mentioned institutions, you can safely open an account. In other countries and regions, it is not clear, not that it is necessarily unsafe, but that it is not safe enough. It is very important to choose a safe and reliable foreign exchange platform.