Global regulators are put in place to govern and overseas the business conducted by FX traders and financial companies facilitating and brokering speculative and transactional business on behalf of third parties. FX regulation is normally governed at local level but in many cases if a company is regulated in the UK they typically have the ability to trade in other locations.
Regulators are put in place to ensure a correct and moral approach is taken within the industry and compliance is followed by FX brokers, investment banks, payments specialists and FX trading platforms. The objective being that clients and investors are assisted in a fair ethical manor.
Due to the volume of trade and vast coverage the FX market as with any financial market can leave itself occasionally open to fraud.
The FCA regulates the financial services industry in the UK. It works autonomously from the government and is financed by the fees it charges to the financial services industry. The financial conduct authority has three core objectives;
The FCA has considerable jurisdiction and has the ability to regulate the marketing and promotion of financial products and services. Where appropriate it has the capacity to investigate companies, individuals and organisations.
At the end of 2012, the financial services act was approved by the monarchy and was implemented early 2013. The act provided more concrete foundations for the financial services industry, bringing together more sturdy regulation and a new regulatory process incorporating the Bank of England’s finance committee and the financial conduct authority.
Financial crimes enforcement or FinCEN as its commonly known is put in place to safeguard the united states financial system from inappropriate use. Its core aims are to
Part of the department of treasury Fincen has the following duties:
As the cornerstone of the European commission financial services action plan MiFID or Markets in financial instruments directive has jurisdiction over 31 member states including Iceland and Norway.
The plans main goal was to harmonise regulation, increase consumer’s protection and companies’ competition. Whilst undeniably aims to increase transparency on financial services pricing have been achieved, unfortunately, increased trading locations have had an unforeseen effect, whereby multiple parties can be involved in any one trade or transaction meaning a much great additional workload.
Core initiatives and responsibilities of MiFID also include:
The New Zealand Financial markets association is the main financial body of NZ ensuring professionalism throughout the wholesale banking and financial markets sector. Reformed in 2007 it is a not for profit organisation that overseas efficient operation of OTC markets.
The Australian securities and investments commission regulates corporate and financial services as well as tradeable markets. Set up under the 2001 Australian securities and investments commission many of their tasks are carried out under the Corporations act dating from the same year.
The Australian securities and investments commission acts objectives include:
FINMA is the independent financial markets regulator for Switzerland. Formed in 2009 its directive is to supervise exchanges, asset managers, securities dealers, funds, insurance companies as well as regulating distributors and intermediaries. Its role is to protect creditors, investors and policyholders.
Established in 1998 as an administrative body whose main responsibilities included supervising and inspecting private sector financial institutions. In 2000 Japans Financial services agency was created more formally and its supervisory became much more advanced. Today the FSA’s role is an independent agency that ensures Japan’s financial system whilst inspecting and managing securities transactions.
Typical tasks handled by Japan’s FSA include
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