Some people rely on regulation to prove their innocence, while others rely on regulation to deceive the ignorant.
Regulation is well-intentioned and can regulate behaviour, but domestic investors are kept in the dark because they don’t know much about it.
So today, I’m going to show you more about it.
1. Regulation Everyone should know what the regulator is doing?
I emphasize here that supervision is limited to certain areas.
Like the chengguan, each chengguan is responsible for one area, and some areas may not be controlled.
Different countries and regions have both high quality and low quality regulations.
If a dealer in a particular region is chosen, the local regulator should be chosen accordingly.
The regulations stipulate the authenticity of the dealer’s business scope, address and contact details.
The regulator will punish dealers if they commit violations.
Different regulators have different levels of severity.
Like the laws of different countries, some are open and some are harsh.
Even if it is the same question, the judgment method is completely different.
So research the regulations of the appropriate regulator for the dealer you choose.
So, for example, if a dealer violates a regulatory rule — and there have been a lot of reports recently — that the regulator has a maximum leverage of 30 times, but the trading platform is offering 100 times leverage.
In this case, can you regulate leverage beyond the scope?
No, but typically, the average trader will choose more than one regulator to ensure that some regulators can have more leverage.
There is a loophole here, for example, the FCA regulator allows maximum leverage up to 50 times, but the dealer’s choice of leverage can be up to 200 times, which may indicate that your account is not regulated by the FCA, but is otherwise regulated by the dealer platform.
This is actually a kind of inferior supervision behavior, because the regulatory bodies are also three, six, nine and so on, some of them are in vain, supervision = transparency.
02. Levels of regulators Regulators separate shore and full supervision.
So-called offshore regulation means that the regulator and dealer platform cannot belong to the same country or region.
Full supervision is also called onshore supervision. Dealers and regulators are in the same region, but many dealers have branches in other regions, and the supervision of the branch may not be the same as that of the headquarters.
This is another big smoke screen that can easily confuse traders.
Therefore, when choosing a dealer, pay attention to the relationship between the branch and the head office, and do not be confused by the appearance of the head office.
The e best option is full regulation, as the application and issuance of licences are very strict, with relatively high inspection requirements for license-holders and companies.
Offshore regulatory applications are very lax.
Some regulators are offshore, such as the Belize IFSC, the Seychelles FSA, the Vanuatu VFSC, etc., which you have to remember are not very useful.
The following are some of the world’s leading comprehensive regulators with strong enforcement and oversight, and severe penalties for dealers who commit misconduct.
It’s a safer bet for the average investor.
We all know that these regulators are more reliable and traders are more reliable.
As a result, it is inevitable that some black businessmen will forge the licenses of these regulators, which is often called a deck.
03. How to Query Foreign Exchange Regulation Each regulation has a unique regulatory number, so you can use the regulatory number or dealer name to verify that regulatory information is authentic.
Take the ASIC regulatory query as an example to illustrate how to query regulatory Step 1: Find the regulatory number of the dealer.
If you don’t know, you can ask customer service or visit their official website.
Step 2: Open the official website of the regulator (available in China, directly search for ASIC to find the official website), and choose “Professional Registers” on the upper right to access the dealer query page.
Step 3: On the dealer query page, Enter the dealer name or regulatory number in the Enter Keyword(s) field.
Select the following image from the IN Select Register drop-down box and click the Search button directly.
Step 4: Obtain the query result.
The results are in two parts.
Above is the dealer’s various information, name, address, licensing date, and business status.
Below are the regulated business areas.
Particular attention should be paid to checking the regulatory status, comparing the name and timing of the regulatory firm, whether foreign exchange contracts are allowed to operate business, and whether retail clients are accepted.
The same is true for other regulatory queries.
You should visit the regulator’s official website more often, as they also regularly publish some of the deck regulated dealers.