Lesson 7: Foreign Regulatory Agencies Worldwide

Forex regulatory agencies keep the trading experience of traders less risky by overseeing the operations of forex brokers and service providers.  

These regulatory bodies maintain integrity and fairness in the financial market. Their primary purpose is to prevent and investigate fraudulent operations of every financial business registered under their regulation. 

In this lesson, you'll walk through different regulatory agencies that govern brokers and safeguard the interests of online traders under their respective jurisdictions. 

Lesson Highlights

• Dealing with a broker or service provider under the regulation of a certain regulatory agency gives traders a fighting chance to escalate their disputes against their broker or service provider.
• Regulatory agencies' primary role is safeguarding their respective country's financial ecosystem by overseeing the operations of financial businesses.

Financial Sector Conduct Authority (FSCA)

For South African traders, the Financial Sector Conduct Authority (FSCA) is a government agency that ensures all South African financial institutions adhere to ethical, fair, and transparent practices. It includes institutions like;

• Brokerage companies 
• Investment firms 
• Insurance providers 

Aside from its role in maintaining fairness in the financial sector, FSCA is known for actively promoting financial literacy to empower South African citizens in making informed financial decisions.  

To verify your broker or service provider's registration with FSCA, you can use its Authorized Financial Service Providers search engine.

Simply input your broker's business name and its license number from FSCA. With this service, you can also access all your broker's regulatory documentation and see whether FSCA has ever sanctioned your broker.  

If you have any financial issues, like disputes, that you want to bring up to FSCA, you can do so through its website.

Or by contacting FSCA customer service at 0800-20-37-22.  

Swiss Financial Market Supervisory Authority (FINMA) 

Although it's a relatively new regulatory agency, Switzerland's Financial Market Supervisory Authority plays a crucial role in ensuring that the country's financial market operates by the law.  

The FINMA was formed in 2007 as a merger of the Swiss Federal Banking Commission, the Federal Office of Private Insurance, and the Anti-Money Laundering Control Authority.  

This regulatory body is responsible for overseeing all financial institutions registered in Switzerland. This includes all Swiss banks, security dealers, and stock exchanges. It mainly functions to provide;  

1. Licensing: FINMA authorizes and provides licenses to companies wishing to operate financial services in Switzerland. 
2. Supervision: Using a risk-based approach, FINMA works to identify threats that harm individuals or institutions under the financial ecosystem. 
3. Enforcement: To restore compliance, FINMA can investigate violations and enforce actions toward financial institutions under its regulation.  

If you're looking for a broker or service provider operating in Switzerland, the first thing you need to check is its FINMA registration. To verify, simply go to the FINMA website, access their search engine for registered entities, and input a broker's information.  

All registered financial companies are included in the FINMA database. If the broker you're researching does not show in the search, it simply means it's not regulated by FINMA.  

To access their other services, you can visit their website.  

Australian Securities and Investments Commission (ASIC) 

The Australian Securities and Investments Commission, founded in 2001, is among the most popular and credible regulatory bodies across the financial ecosystem.  

It's the government agency that regulates and oversees the operations of the Australian financial markets, including companies that provide banking, insurance, and other financial services.  

Like any regulatory body, the ASIC promotes confidence among the individuals and businesses participating in the financial market. However, its primary goal is to; 

• Ensure the integrity of Australia's financial industry by maintaining, facilitating, and improving the performance of the country's financial system.  
• Study the financial ecosystem and enforce laws to ensure fair and ethical practices within the financial market. 
• Make information about registered entities accessible to the general public. 

Other Foreign Regulatory Bodies 

Is your broker not registered with the regulatory agencies mentioned? Don't fret because those are not the only regulators in the financial ecosystem.  

Here are the other foreign regulatory bodies:

In this lesson, you've learned the regulatory bodies that back you up when you have a dispute against your broker. For the next lesson, you'll explore the best tips to avoid getting scammed while trading forex.