Regulated Brokers – Why is it important?
When it comes to choosing a broker, it can get tricky and if you don’t know the right questions to ask and the answers to look for, you will find yourself in quite a pickle.
To make things simpler we are referring to all the parameters you need to know about the upsides and downsides of regulated and unregulated brokers.
Who is a Regulated Broker?
Regulated brokers are those who are registered with the financial regulatory body of your respective country. Hence, they are obliged to comply with the rules of that body making them more accountable and traceable.
Unregulated brokers, on the other hand, can act in any manner as they are not restricted by any set of rules.
Risks of Choosing Unregulated Forex Brokers
If you risk trading with an unregulated broker, you are basically risking all your money.
You cannot predict exactly how things will turn out and cannot claim to know the intentions behind brokers from a few encounters. Therefore, it is important to be protected from mistreatment and fraud.
Unfortunately, trading with an unregulated broker does not come with this facility. An unregulated broker has no responsibility to comply with professional ethics and privacy policies, so you are basically trading your finances and personal information on the guarantee of the broker’s character only, which again you have no claim off.
In case, the broker company goes out of business, it is very likely that your investment will go down with it.
What is a CFD?
A contract for difference (CFD) is a contract between a buyer and a seller where the buyer has to pay the seller the difference between the value of an asset at the time of contract and the current value.
The greatest advantage of this is that you can trade an asset without actually owning it.
You trade the value of the asset, not the asset itself. It considers the price movement at the point of entry and exit into the contract; it does not consider the asset’s actual value.
Advantages of Regulated CFD Brokers
Regulated by Governmental Authorities
Regulated brokers are registered. To be registered, they have to show a certain level of performance and standard.
So, rest assured that a registered broker is well above in the top league of brokers. Moreover, they have to abide by a guideline that restricts them from making reckless decisions.
High Level of Security
When your money is at stake, it is normal to ensure that the broker offers you some kind of security. That security and privacy is an obligation for regulated brokers.
They have to make sure that there is a separate account for your funds that does not get mixed up with the company’s funds and a separate track is maintained for each client making it easier for them to track their money.
Moreover, traders can withdraw their funds at any time without any risk, when there is enough free margin. This safety makes the very volatile CFD trading a little easier.
Impeccable Adherence to Rules
Being registered with the financial body of a country requires broker firms to provide a list of their employees, their track record, qualifications, etc. before registration.
The strict guidelines require the brokers to follow client-friendly record-keeping and accounting practices as well.
Better Customer Service
Since regulated brokers are accountable and the client has the power to withdraw their investment in case of mistreatment, they are comparatively more motivated to provide exceptional service and cater to their client’s unique needs.
They take care of every detail from setting up the account, to resolving technical and trade-related issues.
Possibility of recourse
In case of an issue, an unregulated broker is hard to contact.
However, a regulated broker must maintain a functional customer care desk. You can also contact them via email. Overall, your problems will be addressed and resolved faster.
Want to Look for a Reliable and Regulated CFD Broker?
Now that you are well-versed in the advantages of a regulated broker, traders should look for one that is just right for their unique needs.
We at tixee understand the rights and concerns of traders. Striving to ensure a better experience for our clients.
The tixee group has multiple licenses available to clients, depending on their country of residence, including licensed entities by the Financial Services Authority in Seychelles, Cyprus Securities and Exchange Commission in Cyprus, Financial Sector Contact Authority in South Africa.