During recent time, the number of ads regarding forex brokers has increased to a great extent than the ads of stock brokers and the future brokers. Finding a forex broker with the best commissions, lowest spreads, best margins, and trading platforms is the primary concern of most of the forex traders. In this regard, you must check whether the broker you selected is registered and regulated by the USA regulators or not. The question is How? Today there are lots of firma claim to be forex broker without being regulated by the CFTS.
The CFTC (U.S. Commodity Futures Trading Commission) and the NFA (National Futures Association) are the two regulatory organizations in the US that regulates the forex trading under the government according to the laws. Having a Retail Foreign Exchange Dealers (RFED) registration is a must for being recognized by the CFTC and NFA as true a forex broker. Without having a RFED registration, no firm is permitted to buy foreign currency (forex) contracts from anyone or sell foreign currency contracts to anyone. The broker firms mainly does the business of buying and selling forex contracts with you.so there is a possibility of cheating you by giving you the already soled contracts. The CFTC mainly stands for preventing such types cheating and giving you the security of trading.
There are some certain rules and regulations like minimum capital requirements, detail trade and account records, and compliance made by the CFS that a RFED registered brokers should follow mandatorily. On the other hand, if any broker wants to receive forex trade orders from the investors, registering in the RFED is a must. There is another type of broker known as the introducer broker (IB). They just permit you to trade forex as their client. These brokers are mainly concentrated on the assets like a primarily stock broker. This type of brokers needs not to be registered with the RFED to perform their activities.
There is an interesting blog that explores the brokers for their registration and provide brokers’ registration status with RFED.
How to Check Your Broker’s Registration?
The features and registration information are such things that are open to all as they are basically the weapon for attracting clients. B.A.S.I.C, a particular searchable database provided by the NFA gives all the information about their registered broker firms. Checking the background information is a must as no one wants to be victim of cheating after giving money for forex trade.
Check your forex broker at BASIC database.