Despite the incredible popularity of forex trading companies and its obvious benefits, many people are still afraid to trade. To protect yourself from being scammed, it is best to work with a regulated broker. Why is it so important? Below, we will consider the main advantages of cooperation with forex license structures and, accordingly, the advantages of having a license for the brokers themselves.

Regulated brokers activities are controlled by a special supervisory body – the regulator. This organization makes sure that the company does not allow abuse and adheres to good practices.

What Distinguishes a Broker Officially Licensed?

●      Security.

Firm fully complying with all regulatory demands ensures reliable protection of funds and data of its customers. To this end, customers are usually asked to go through a full verification process. You need to upload documents confirming your identity and residence in territory of particular state, as well as your financial situation. In this way, you can mitigate the risks that fraudsters will use fake or stolen documents to open an account.

●      Transparency and fairness.

Financial relationships are not easy. That is why transparency and honesty are what each regulator seeks from their forex brokers. Regulatory representative monitors receipt, execution and transmission of orders. If brokers commit violations, they faces fines and sanctions. In some cases, they may even lose their license.

To make the services more understandable, the regulatory authorities maintain a list of regulated brokers. Just enter the name of the company on the regulator’s website and find out if it has a license.

●      Full customer support.

Each supervising government representative ensures that the forex broker is always ready to help you in any situation, provide you with the necessary trading instructions and a working support service to solve any of your problems.

In addition, for investors who prefer a profitable investment of large funds, it is important to enter the international stock market. This point is also better to take into account at the stage of choosing an intermediary. Brokers are different, and they have a wide range of services. Do not rush to focus only on promotional offers. To determine an intermediary who will provide you with all the conditions for successful trading on the stock exchange, you first need to assess your capabilities and desires and take a professional consultation from competent team Eternity Law International. Then choose a brokerage structure with a set package of services and tariffs. It’s another pros of licensed side, since each forex licensed broker clearly defines and describes the directions in which firm can function.

Forex brokers need a license so that they can confirm the legitimacy of their actions, that they is not a fraudster, they really brings their traders/ transactions to the interbank market and have obligations to them. The main task of the regulator that issued the broker a license is to prevent a situation where the broker cannot fulfill its obligations to traders. The regulator carries out legal protection of traders and investors in disputable situations, considers their complaints, and checks broker. In addition, regulator undertakes to periodically audit activities of the broker in order to identify inconsistencies with licenses’ norms.

It is significant that brokerage activities aren’t required to be licensed in some states. That is, a broker can simply register as legal entity providing some financial services and actually work all over the world via the Internet. This, of course, does not mean that such a broker is unreliable and generally a scammer. Just in this case, traders and investors do not receive any guarantees by working with such a broker.

In contempt of license category, such broker is responsible to its clients financially and legally. If broker goes bankrupt or some other unforeseen situation occurs, the regulator and the law protect the trader/investor and help recover lost deposits from broker’s reserve fund. Thence, without exception, traders and investors are advised to work only with brokers that have a valid license. All regulators oblige brokers to provide high quality services to clients and insure their funds in case of bankruptcy of the dealership. Therefore, if a company has a trading forex license, then for a trader this becomes a certain guarantee of its reliability.

In order to take care of traders, regulators require brokers to reduce the maximum leverage and reduce the number of trading instruments. These measures are also designed to protect the trader from going into deep negative territory and reduce the risk of speculation in the market.