FSA Brokers

by admin on July 29, 2011 9:21 pm

Financial Services AuthorityAbout FSA brokers

The FSA or Financial Services Authority is a large body that governs and regulates the financial services industry in the land of UK. It is a financial agency that sees to it that the economic activities of the different markets are in balance. For a number of years, the FSA has engaged itself in the regulation of the forex market. When talking about regulatory commissions or boards worldwide, the FSA is one of the most respected in such field. For a lot of traders who are active in the exchange market, they believe that FSA brokers are one of those brokers who are able to meet the demands and needs of their clients. The reason behind its success is the fact that FSA brokers are able to maintain balance between a secure trade and the autonomy to trade based on their own provisions. With that, FSA brokers are able to maintain a well-regulated environment especially for international investors and traders.

The fact that FSA brokers are regulated by the FSA, there is an assurance that indeed, the brokerage services offered by the FSA brokers are of high standard. This is one of the reasons why even though FSA brokers are based in the UK, they are one of the few non-US brokers who accept trades and investments coming from the United States. And in order for traders to know whether a broker is FSA regulated, an FSA register is made available in order to confirm that the brokers are really under the supervision of the independent regulating body, the FSA.

What it means to be an FSA broker

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Being an FSA broker is not easy; however, dealing with FSA brokers is really secured. When a trader opens an account with FSA brokers, it means that the investments and trades being handled by that broker are safe and protected. FSA brokers are actually compelled to keep the clients’ funds on a separate account. In line with this, FSA brokers are not allowed to use these funds for their own personal use. In cases wherein FSA brokers declare bankruptcy, they are still unable to use the clients’ funds as stipulated under the FSA regulations. So whatever it is that FSA brokers receive from the depositors, it will always be considered as ‘client money’, and there is no way that the money will be spent for the expenses and risks of the brokers. It simply follows that in cases FSA brokers fail, the clients are still protected. Likewise, liquidity providers cannot use the clients’ money whenever FSA forex brokers fail to meet their financial obligations. In simple language, the clients’ money will just be for the clients in order to pay out compensations.

Why deal with FSA brokers

There are a number of reasons why traders do investments with FSA brokers. The following are just some of the grounds why FSA brokers are highly suggested.

  1. I.        FSA brokers are regulated by the FSA. This means that the brokers are allowed and are licensed to perform different forex trades.
  2. II.        FSA brokers follow a set of standards imposed by the FSA. These standards make sure that the brokers are still able to offer high quality brokerage services to different clients.
  3. III.        FSA brokers record all the transactions made by their clients. This makes certain that all transactions between the trader and the broker are transparent
  4. IV.        FSA brokers document all the proofs of client funds to ensure their clients that the funds are not spent to compensate the needs of the broker and the company. In this way, all the money that the client owns will not be spent at all, thus, everything will be secured and protected.

Requirements for FSA brokers

The following are some of the requirements expected from the FSA brokers in order for them to be worthy as such.

  1. I.        Ensure that the bank where the client funds are kept is approved by the FSA.
  2. II.        See to it that the bank has high quality services and continuous monitoring of the quality must be maintained.
  3. III.        The client funds must be segregated from the company funds so that there is no way for the client funds to be used for company expenses.

Regular submission of reports including the annual audit must be given the FSA.

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Risk Disclaimer

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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