Greed is a human vice and the greed of earning increased profits lead Forex service providers to make false promises. This greed also leads new traders to believe these promises made by the service providers. They make promises of earning immense wealth without having to work hard for it. This has given the industry a bad name and prop firm is at times associated with gambling
It was for this reason that the Forex regulation agencies came into existence. The work of these organizations is to control the Forex and other futures market and protect investors from abusive and fraudulent trade practices. When a broker does not live up to his promises and deliver as promised, he is removed from the market and not allowed to trade. Given below are two Forex Trading agencies that are working towards this end.
Commodity Future Trading Commission (CFTC)
The Commodity Future Trading Commission was founded in 1974. When it was established, the agency’s mandate was in agricultural sector. It came into existence to have a semblance of control over the futures market and commodities in the United States. After the Commodity Futures Modernization Act was passed in 2000, the organization has had a multifold mandate, one of which is regulation of Foreign exchange so that it is not associated with any negative activities or manipulative practices. The Commodities and Forex market have more independence than the Stock market and these leads to some of the brokers taking advantage of the naïve public. The looming presence of CFTC is to ensure that these markets remain a fair trading ground.
Australian Securities and Investments Commission (ASIC)
The ASIC is an Australian Forex Regulating body that works to control and regulate the Australian financial markets. The key concern of the organization is to ensure that there is complete transparency in all financial market dealings.
ASIC is empowered under the Australian Securities and Investments Commission Act to carry out and implements its regulating functions. The main functions of this independent government body are given below.
Ensure that the financial system in Australian market maintain a high level of performance and to enhance this level.
To encourage people to invest in the Forex and other markets.
The organization will also ensure that there is fairness and transparency in all financial dealings.
In case there are any legal issues pertaining to the market, the trader does not suffer.
The absence of regulations and regulatory bodies has led to a number or fraudulent online activities regarding the Forex market. The enforced regulations may not be to the liking of all brokers and traders but are essential. These currency-regulating bodies are completely professional in their work and ensure that their executives also work with integrity.
