Forex trading has taken the world by storm and new online trading brokerages are popping up all the time. However, it’s of the utmost importance to ensure they are regulated by a reputable regulatory agency. This is important because regulatory agencies protect you, the investor, from fraudulent malpractices and financial incompetence. Not every online trading brokerage is honest and there are actually a great deal of scam brokers out there, especially in the country of Hungary. Therefore, it’s very important to trade with a regulated broker. So, read on and discover the regulatory agency responsible for protecting investors dealing with Hungarian trading brokerages.show more
The regulatory agency responsible for the financial integrity of the Hungarian markets is the Central bank of Hungary and is known as the Magyar Nemzeti Bank (MNB). This bank was established in 1924 and has since played an integral role in the development of the financial markets in Hungary. For instance, the MNB played a large role in the participation with international economic relations with financial organizations such as the BIS, OECD, and IMF. As well, the MNB issues the national currency, controls the stability of prices, publishes exchange rates, and sets the base rate. Basically, the MNB plays an integral role with all aspects of the financial markets in Hungary. In fact, trading brokerages are not aloud to operate in Hungary unless they are licensed and regulated by the MNB.
The MNB has a vital role in the financial integrity and stability of the Hungarian markets. Therefore, they have numerous responsibilities to achieve their goals and fulfill their role in the financial markets. See their most important responsibilities listed below.
The issuance of the Hungarian Forint and control of its stability, circulation, and exchange rates.
The management of foreign currency reserves and gold.
The supervision of financial institutions that make up the capital markets.
The protection of consumers by enforcing the law and taking legal action on those who are fraudulent.
The prevention of money laundering and financing of terrorism.
The licencing and regulation of every trading brokerage operating out of Hungary.
All trading brokerages in Hungary are required to be regulated by the MNB and for good reason. The MNB regulation protects investors and consumers from fraudulent practices and volatile markets. One of the ways they protect people is by establishing an organization known as the Financial Consumer Protection Center. This organization provides the public with useful information that’s easy to comprehend about products and services in the financial sector. As well, this organization acts as a resolution centre where investors can issue complaints about financial institutions.
The MNB requires that all trading brokers operating in Hungary undergo a scrutinizing procedure to determine their competence for receive licensing and regulation by them. All brokers are required to follow the MNB’s specific code of conduct and adhere to all their rules and requirements. For example, all brokers are required to submit detailed reporting of the investment products and services they provide on a periodic basis. As well, brokers must hold their clients funds in segregated bank accounts to ensure absolute security in the event of insolvency. All in all, the MNB’s guidelines for their brokers are similar to the global regulatory guidelines adopted by agencies all over the world.