Best FINMA Regulated Forex Brokers 2019
FINMA Regulated Brokers Comparison Table
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By 14 User Reviews
DFSA, FINMA, SFC
Bank, Dealing Desk, Market Maker, No dealing desk, STP
By 10 User Reviews
DFSA, FINMA, FSA(JP)
Introduction to FINMA Regulation
FINMA which stands for Financial Markets Authority is the autonomous and independent financial markets regulator in Switzerland. It is charged with the responsibility of overseeing legal operations and fair play of banks, insurance providers, asset management firms, securities exchange dealers among other investment schemes and participants of the financial markets. It is an institution that came to being following the merger of the Swiss Federal Banking commission, the Anti-Money Laundering Control Authority and the Swiss Federal Banking commission as a directive of the Federal Act on the Financial Market Supervisory Authority in 2002. FINMA is funded by levies charged on companies that operate within this sector.
As stated in the Financial Act on the Financial Market Supervisory Authority (FINMASA) this body is charged with protecting the functionality of the financial market by issuing operating licenses to organizations. This means that they have to make sure that the licensees are compliant with all laws and regulations surrounding the financial sector. This in effect protects the welfare of the investors and industry players alike. By making sure that companies in this industry are accountable, confidence in investors is restored and the financial sector grows.
Their regulation also encompasses providing a level playing ground for competitors in the financial sector. In addition to this, it tasked with ensuring liquidity of financial institutions and mitigating risk where issues such as bankruptcy and financial restructuring are involved. FINMASA organises for audits to be carried out on its licensees although the cost of this activity is borne by the licensee. In the event that the audit report submitted indicates violation of any legislation surrounding the financial sector, the company is given adequate time to comply, failure to which the necessary legal action is taken.
How FINMA Regulation Protects You
FINMA protects investors by making sure that they are not exposed to unnecessary risk and by making sure that brokerages are accountable to their clients. They do this by making sure that there is no misuse of insider information, no market manipulation and maintain a watch list/restricted list of companies that are being closely monitored perhaps based on foul play reported in the past. They have the authority to monitor employee transactions to prevent them from taking advantage of the markets due to their position for their own personal benefit. Deposits you make as an investor who is a client of a bank or securities exchange firm are protected up to the value of CHF 100,000 in the event that the bank/broker goes bankrupt. FINMA is also open to you as an investor in case you encounter any violation of you rights within the financial markets.
Guidelines for FINMA Regulated Brokers
Any company or entity carrying out an activity that requires a license is liable to have legal action taken against them as per the financial markets act. This includes monetary fines and/or custodial sentence according to severity of the offence. As mentioned above, FINMA has the mandate to request for company information and in return, the licensee is required to share it, failure to which necessary legal action will be taken.