Best NFA (US) Regulated Forex Brokers 2019
If you are a forex trader, you will absolutely have to work with a regulated broker. The NFA regulates the ever-expanding forex industry. Inside you will find our list of the very best NFA regulated brokers.
Introduction to NFA Regulation
Over the past decade, Forex trading and its industry have grown a tremendous amount. An ever-increasing amount of people became interested and so did an influx of innovation in the markets. New technology and platforms were created, brokerages were offering new ways to trade. The trading of Forex brought about a whole new landscape in the online trading world. But, with all this popularity and innovation, came a flood of scams and financial malpractices. Along with the wake of all these scams came the global financial crisis of 2007-08. Policy makers from all over the world started to put in measures to regulate and revamp the financial structure. This includes the United States of America. Shortly after the crisis, the U.S. saw the need for a single regulatory body to impose regulations on all the Forex brokers under U.S. jurisdiction. This resulted in the implementation of the National Futures Association (NFA) regulation for Forex brokers. Although the organization has been around since 1982, it was only in 2008 that the agency took on regulation over Forex brokers and other financial entities.
The NFA operates independent from the government, making it a self-regulatory authority responsible for the supervision and regulation of all Forex brokers in the United States. This regulation also includes the regulation of the derivative markets including ETF’s, OTC’s, and currencies. With this new regulatory authority overseeing the Forex markets, the U.S. hoped to put a stop to Forex scams and financial malpractices. Let’s find out exactly how NFA regulation is able to do just that.
As mentioned before, the NFA is a self-regulatory authority operating independently from the government. However, it follows the laws and legislation passed by U.S. Congress regarding the regulation of financial entities, as well, it works in accordance with the U.S. Commodity Futures Trading Commission (CFTC). Which means they are essentially a member of the CFTC and must follow their guidelines. Also, as an autonomous organization, the NFA does not use taxpayer money and is self-funded, generated through membership fees and fines.
The NFA is the sole regulator of Forex brokers in the U.S., meaning all U.S. based Forex brokers must be licensed and regulated by them. As well, U.S. Congress has required that other financial companies including SWAP dealers, hedge fund managers, signals service providers, and every other similar financial entity to be regulated by the NFA. Currently, there are more than 4,200 firms and 55,000 associates under NFA regulation, meaning they must adhere to the same high standards of professional conduct.
The NFA is dedicated to safeguarding market integrity and the protection of investors. They work to achieve these goals in numerous ways. They develop rules and regulations, they implement programs and services to both investors and brokers, and they constantly supervise and implement best financial practices. The NFA is vital to the success and integrity of the U.S. Futures industry.
The NFA has numerous responsibilities with their role of protecting and maintaining the integrity and transparency of financial markets in America. The authority is not only responsible for the financial markets, but also for the protection of consumers participating in these markets. Therefore, the NFA must create and implement many rules and regulations for all the financial entities they oversee. Which includes every Forex broker in America, as it is a requirement to be regulated by them. This means the NFA must carefully examine each and every brokerage who applies for licensing through them.
As well, once a forex brokerage is licensed, the NFA is responsible for the constant supervision and implementation of all their guidelines and policies. They must ensure the companies under NFA regulation obey their regulation to maintain integrity in the markets. In order to do this, the NFA is responsible for the issuing of investigations to ensure compliance with their rules and guidelines. If a brokerage fails to comply with regulations, they can be fined with heavy fees. After all, this is one of the ways the organization generates money. The authority has zero tolerance for scams or financial malpractices and will impose heavy penalties and fines on those who fail to comply with their regulation.
Although the NFA generates a great deal of their money from fines imposed on incompetent brokers, they do everything in their power to prepare and educate firms on the best financial practices. The NFA has developed new programs to prepare the futures and forex market in the ever-changing electronic format of trading. The NFA is very willing to help member comply with their regulation, and will do everything they can to maintain integrity in the markets.
Another important responsibility of the NFA is to take complaints from consumers against brokerages. They take these complaints very seriously and look into and investigate every situation with the utmost sincerity. As well, the National Futures Commission provides traders and investors with a dispute resolution. The NFA has always taken this responsibility very seriously and has been taking very proactive and up to date measures to solving these disputes since their arbitration program in 1983. Now, since 2001, the agency accepts complaints and dispute claims online through their website. The NFA was the first financial regulatory organization to accept claims in this way.
The NFA’s responsibilities are not all geared towards the regulation of firms and financial markets. They are also very concerned about informing and educating traders and investors. On their website, you can find a wealth of information geared to informing investors with knowledgeable content on the Forex and Futures industry. Users can sign up for e-mail news letters, enroll in online classes and webinars, and simply conduct research on best investment practices. The NFA shows a strong emphasis on informing and educating not only brokers but traders and investors as well.
All in all, the National Futures Commission’s main responsibility is to the protection of consumers and the integrity of financial markets in the United States of America. The NFA does this by creating and implementing new laws and regulations for maintaining a more safe, secure and transparent financial atmosphere. They supervise and investigate firms, they license and analyze the most competent firms, and they even educate and prepare investors and brokerages for the best financial and investment practices.
How NFA Regulation Protects You
A major part of the National Futures Commission is the protection of investors. Everything they do and all the services they provide is in place for the protection of investors by safeguarding the integrity of financial markets.
One of the largest areas of protection the NFA provides investors is the prevention of fraud and financial abuse. They achieve this level of protection by making it mandatory for all financial firms or entities providing services in America to adhere to their strict regulatory guidelines. All firms must pass an intense and secure licensing process, which prevents companies from participating in any financial malpractices.
As well, once companies are licensed by the NFA, they are under constant supervision and must comply with fair and true advertising practices. Investors are protected through a competent and transparent market.
Also, the NFA protects investors by cracking down on any fraudulent activity committed by companies. They issue warnings, fines, and even dismemberment and imprisonment if need be. They will work closely with the CFTC and FBI in extremely fraudulent situations.
If the previously mentioned methods of protection fail an investor, the NFA has a very serious complaint and arbitration process. The NFA will look in to and investigate every complaint filed by an investor. They also have a strong dispute resolution process for the settlement of these cases.
NFA protection starts much earlier than the points mentioned above, with the education information available to investors. The NFA has a slew of resources and tools committed to helping investors make informed financial decisions. This is just another way the NFA goes above and beyond with protection for investors.
Investors and traders can feel protected when dealing with brokerages and companies regulated under the NFA. They are delighted with peace of mind knowing they are protected through the regulation imposed by them. As well, investors can enjoy secure and transparent markets to trade in.
Guidelines for NFA Regulated Brokers
Forex brokers governed by NFA regulation must adhere to the strict guidelines imposed on them. This is to ensure brokerages maintain safe, secure, and transparent financial practices, as well as to maintain the integrity in financial markets. The NFA takes their guidelines very seriously and will impose harsh penalties on those who don’t obey, such as heavy fines, revocation of licenses, and even imprisonment. With that in mind, there are many rules that Forex brokers must follow in order to operate within the United States.
First and foremost, Forex brokers are required by law to follow safe and transparent market practices to ensure the integrity of financial markets. This entails the advertising and promotional side of the business as well. While the NFA supports a competitive atmosphere among Forex brokers, they are always required to present real facts without any form of miscommunication or representation. If the broker is thought to represent something which leads consumers in a false direction they can be penalized.
Another requirement of NFA regulated Forex brokers is the significant amount of operating capital held by them. These Forex brokers must hold at least $20 million in operating capital. This amount is much higher than most other forex brokers in the world and goes to show just how strict and serious the NFA is about large and competent forex brokers. The NFA was put in place to protect consumers, and this high operating capital can protect investors from broker bankruptcy and offers better liquidity for them as well.
A guideline which is common for most forex brokers around the world is the segregation of client accounts. Their funds must be held separate from a clients account, ensuring more secure and transparent business practices. As well, Forex brokers are required to submit weekly financial reports to the NFA, ensuring everything is in order. This prevents any brokerages from participating in money laundering or other financial malpractices. In addition to these weekly financial reports, Forex brokers must submit an annual audit report which is shown on the NFA website for anyone to view. This provides traders and investors with a higher level of transparency and trust when researching a company.
Another requirement which sets the NFA apart from most other regulatory agencies is the requirement of Forex brokers to only hire trained and knowledgeable staff. The agency takes a proactive approach to ensuring employees are qualified and properly trained for various positions in a brokerage.
- New Zealand
- South Africa
- South Korea
- Hong Kong
- United Arab Emirates
- Russian Federation
List of Brokers
|BROKER||USER RATING||REGULATED BY||HEADQUARTERS||MIN. DEPOSIT||OFFICIAL SITE|
|ASIC, CySEC, FCA, FSB, ISA, MAS||Israel||$100||Open Account|
|CySEC, FCA, IFSC||Cyprus||$5||Open Account|
|AMF, ASIC, BaFin, CONSOB, FCA, FSB||United Kingdom||$50||Open Account|
|ASIC, CySEC, FCA||Cyprus||$200||Open Account|
|FCA||United Kingdom||$100||Open Account|