Broker Regulators & Licenses

Regulator

What Is Financial Regulation?
Financial regulation is of the utmost importance when it comes to protecting the integrity of financial markets and ensuring the safety of consumers. There are various forms of regulation from all over the world, each with their own jurisdiction. So, what exactly is financial regulation? Well, it’s a form of regulation in which certain financial institutions are required to follow rules, restrictions, and guidelines imposed by the regulator. There are numerous regulatory agencies out there with a wide reach of influence. The world has known international regulators, federal regulators, state regulators, and so on. Their power and reach influence financial markets all over the world. All the financial regulators have the same aim to protect the integrity of financial markets.

Some common goals among financial regulators all over the world include;

• Maintaining and promoting confidence in the financial markets through transparency and competition.
• Stabilizing the financial markets by contributing to the protection and enhancement of financial market protocols.
• Protection of consumers through their guidance and regulatory authority over financial institutions.
• To Mitigate all fraudulent practices among financial brokerages, while issuing harsh penalties to those who participate in financial malpractices.
• Regulate foreign participation in the financial markets.

Why Is Regulation Important?
Without financial regulation, brokers would be free to do what they please and may take advantage of consumers. Ultimately, the consumer would be unprotected, and subject to financial malpractices of the broker. Regulation is so important because it creates harmony among not only the financial markets, but among consumers, brokerages, banks, and other financial institutions. Regulation sets the baseline on which all financial practices follow, regardless of where in the world they are, and what regulatory agencies govern them.

Popular Financial Regulatory Agencies
There are numerous reputable regulatory agencies in the world, each with massive responsibilities to protect the financial markets they regulate. Below are a few of the top regulators from around the world.

CFTC (USA)
The United States of America takes the regulation of financial markets very seriously and has developed and implemented quite a few regulatory authorities over the years. However, there are a select few that stand above the rest in terms of credibility and importance. The Commodities & Futures Trading Commission (CFTC) is one of these authorities with such highly respected regulatory framework. The CFTC is known to be a very strict regulatory authority with many guidelines, restrictions, and requirements of financial companies offering investment services to American citizens.

CySEC (Cyprus, an EU Member state)
Many financial brokers based in the European member states are under the regulation of CySEC. This is made possible because CySEC’s financial regulations and operations comply with the MiFID. This regulatory agency is much more laxed on regulatory guidelines but is still very reputable within the industry. This is why the CySEC is so popular among many of Europe’s top brokerages.

FCA (UK)
The FCA regulates financial institutions, provides services to consumers, and maintains the integrity of the majority of UK’s financial markets. It is quite simply the most popular and reputable regulatory agency in the UK and many parts of Europe. The FCA focuses on both the regulation of retail and wholesale financial services firms.