Best CNB Regulated Forex Brokers 2019
The regulation in the Czech Republic differs from other European countries in the fact that the Central Bank has regulatory power over financial institutions and markets, rather than an independent regulatory agency. Along with the regulatory responsibilities over financial markets and institutions, the CNB boasts a fair amount of other powers and obligations. Including the issuing bank notes and coins, establishment of monetary policies, regulation of the banking sector, the monitoring of payment systems, and to oversee the Czech capital markets.
As mentioned before, the CNB is the National Bank in the Czech Republic. There are seven branches spread throughout the country with headquarters in Prague. The Czech constitution is the only authority setting the rules and guidelines for the CNB to act upon, resulting in the authority being free from any public intervention. Therefore, the CNB has many responsibilities set forth by the government and is generally responsible for overseeing different aspects of the Czech Republic economy. The CNB is made up of various departments to handle the overwhelming number of tasks its involved in. In addition to the CNB regulation on forex brokers, the regulation is also in compliance with the MiFID and enforces the guidelines set by them.
The CNB has numerous responsibilities due to its huge overlay of authority. In addition to it’s responsibilities mentioned earlier, the CNB is also responsible for non-banking financial institutions and companies that deal in insurance, pension funds, e-payment gateways, credit unions, securities firms, fund managers, investment companies, and the foreign exchange market. The CNB is responsible for all aspects pertaining to the regulation, supervision, communication, and implementation of their responsibilities.
How CNB Regulation Protects You
The CNB is put in place to protect the Czech economy as well as the protection of consumers and investors. They provide protection in several ways.
- First, they initiate and enforce regulatory guidelines on all financial institutions and companies.
- As well, they issue warnings of fraudulent brokerages and provide educational information for investors through various methods such as schools and online programs and websites.
- Also, the CNB will deal directly with the consumer regarding any complaints they may have about any financial malpractices an such. Resulting in a direct investigation led by them if needed.
All in all, the CNB does a very good job and has a lot of power when it comes to the protection of investors and consumers.
Guidelines for CNB Regulated Brokers
The CNB does not have as many in depth regulatory guidelines due to its mass amount of responsibility with various aspects of the Czech economy. It does not specialize in the regulation of only forex brokers. However, some important guidelines set by the CNB are:
- Brokers must have segregated accounts for holding client’s funds.
- Brokerages must keep complete financial records and submit periodic audit reports.
- Companies must have an insolvency procedure in place to protect investors funds in the case of bankruptcy or legal issues.
- All companies must abide by the guidelines and rules of conduct set forth by the CNB, or cease to do business in the Czech Republic.