The forex regulators in the US are the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). All US based forex brokers that want to operate in us or render service to us traders must register with NFA. The main forex governing rules in the US is the Dodd-Frank Act, which became law in 2010. The law saw a huge exit of brokers out of the US market and only a few remain. A few popular brokers currently in the US market are FOREX.com, OANDA, IG, TD Ameritrade, and others.
The EU forex regulation comes from a combination of regulators. Each country in the EU has its local regulatory body. However, the entire EU countries equally have a unified regulatory entity known as ‘MiFID (Markets in Financial Instruments Directive) formed in April 2004 but the implementation of the law started in November 2007which regulates trading and investment in the EEA.
Any broker that is registered with and licensed by a regulator in one of the European countries can freely operate in other European countries but it’ll only be subject to the regulatory rules of the home country. While EU countries like Bulgaria, Cyprus, and Malta fulfills only basic regulatory requirements, others like the UK and Switzerland move far beyond the basic regulatory requirements.
Nevertheless, the EU financial regulation makes trading forex with any EU-based broker safe especially due to transparent operation, execution, segregation of clients funds from the company’s fund, and strict observance of the compensation rules.
Top Regulated Forex Brokers in the US and EU
Forex.com is a property of GAIN Capital Holdings, Inc. which is listed on the Newark Exchange-NYSE-(GCAP). The site offers a lot of useful features such as tight forex spreads, real trade transactions, a mobile trading platform, and a lot of technical research indicators available in 29 different languages.
FOREX.com allows MetaTrader 4 or FOREXTrader PRO platforms integrations. A trader has three options of trading including advanced trading, web trading and mobile trading apps.
Those who make high volume trades are compensated with cash rebates, interests, and bank fees waivers. The company’s operational integrity makes them well respected. They equally offer service to EU traders.
Regulated By: CFTC, NFA
Headquarters:135 US Highway 202/206 Bedminster, New Jersey, 07921
Min Deposit: 50 dollars for US traders, 50 pounds for UK traders and 50 Euros for EU traders
OANDA is one of the top forex companies that offer competitive spreads to traders. It charges no commissions and offers deep market liquidity and a fantastic trading platform. The trading platform comes with numerous features like forex tools, products, advanced analytical tools, forex news, training videos, and MT4 plugins both from the company and third-party providers.
Traders can sign up for a free demo trading account. Like Forex.com they equally offer some benefits to high volume traders including a discounted spread, a subscribing with a partner platform, free wire transfer and other benefits.
They equally work with EU traders. OANDA Europe Ltd customers get negative balance protection with the company. EU traders that are resident in the UK and Republic of IRELAND can use their Financial spread betting service.
However, CFDs, MT4 hedging features and leverage ratios above 50:1 are not accessible to US residents.
#3: TD Ameritrade
TD Ameritrade provides traders with great charting tools that can compare many currency pairs together. They also provide traders with any essential technical indicators. Traders can also judge social sentiment from Twitter. The company equally offers trustworthy third-party research tools from Morningstar and Market Edge. They charge no hidden fees, and gives uses access to its mobile trading app with a 24/7 customer’s support.
Both traders in the UK, Canada, and the US get access to the same trading platforms which include TD Ameritrade.com and the web-based platform-Trade Architect and the desktop app-thinkorswim.
IG provides traders a broad range of tradeable assets, superb trading experience and research tools, top industry training, and competitive rates.
The Company was launched in the UK in 1974 and is one of the biggest CFD brokers in the world. It operates under the regulatory authorities many global bodies such as the Financial Conduct Authority (FCA) and the Federal Financial Supervisory Authority (BaFin) and is listed on the London Stock Exchange.
It is safe to trade with the company because the fact that it is listed on a stock exchange the financials of the company are public. Also, it is supervised by the top world’s regulatory bodies.
IG is a popular platform for trading CFDs in Europe but it recently moved into the US market. The company owns the North American Derivatives Exchange (NADEX) and DailyFX.com which provides free forex news and research.
Avatrade is regulated by EU (BCI, MFID, +), Central Bank of Ireland (No. C53877), ASIC in Australia and in above 150 countries. It has no presence in the US but in Europe. The minimum deposit is either 100 Euro or 100 pounds. The company charges a spread that starts from 0.9 pip.
Although forex regulation in the US and Europe has a little variation, regulatory bodies in these places are top tier and working with a forex broker regulated in any of these locations is safe. While we listed a few regulated brokers in Europe and the US, there are equally others. However, when trading forex, you must remember that it involves risks but these risks are mitigated when you trade with fully regulated brokers.
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