Why are there few regulated brokers in USA?
Nov 9, 2017 at 11:49 am #1116
The US financial market is one of the most regulated markets in the world. There are a bit tough rules which Forex brokers have to adhere to, and this keeps off. some of the rules include limitation of leverage in Forex trading to 50:1, strictly no hedging and first in first out (FIFO) trading and traders can’t fund their trading accounts using credit cards.
For a Forex broker to be allowed to operate in US, they must be registered with the National Futures Association (NFA), which offers protection for the various participants in the market and also provides an online verification system known as Background Affiliation Status Information Centre (BASIC), which helps in verification of the various brokers. It mainly prevents fraud & abuse and also handles dispute resolution.
I have gone through several Forex brokers but there are very few of them who allow US residents to trade with them since they have not registered with the NFA. Actually, I at times use this as a threshold of choosing the regulated brokers; if the broker allows US residents to trade with them, then they most likely cannot be a scam. There is no way a broker can be able to comply with the tough rules set by NFA and turn out to be a fraud!
Some of the brokers who I have seen registered with the NFA of US are FOREX.COM, Zecco, OANDA, thinkorswim and TradersChoiceFX. There might be other new brokers but I can bet they are not many. So if you are looking for brokers to trade with and you reside in the US, then these are worth trying. And as I mentioned, they also fall under my category of brokers who are not scams.00Nov 15, 2017 at 12:07 am #1125
I trading with Oanda for many years, I reccomend this broker.10Nov 16, 2017 at 4:44 pm #1128
USA is one of the biggest zones to trade FX and all the requirements of establishing FX brokers are highly tough. All the rules in the USA is very tough to achieve regulations of brokers. For this reason regulated brokers are few!00Dec 5, 2017 at 7:41 am #1577
USA is a country which most companies fear and there is really no rocket science to know why it is that way. They have solid rules, but sometimes they are just too much.
So, it is good to have strict regulation and all that, but the approach is something that’s way too strict which is not acceptable for most, so that’s why there are so few regulated broker in there.00Dec 8, 2017 at 3:19 am #1614
I agree with Peter. The policy that the US got regarding regulation is not just strict, but it really decreases the earning opportunity for brokers.
I don’t have issues with their strict policies, but I think no one should have a restriction on the conditions a broker offer, but unfortunately, US put too much into that.
It’s the reason why there are very few brokers regulated in the US and that only one based on there.00Dec 14, 2017 at 12:47 pm #1694
I am sad to say this but in future, it is all very much likely that we will see it all drops even further, the rates of brokers in the USA. They closed out stuff like Liberty Reserve and such, so no one is going to leave their lifetime work in their hands. They have too many complicated policies which not too many brokers will accept. That’s why not only there are very few brokers from the USA, but also many brokers not allowing USA traders to work with them!00Dec 20, 2017 at 9:34 pm #1766
I will agree with people above. They are too harsh, but let me tell you that it’s not exactly done in favor of users, but it’s more to gain money. I feel happy that I am outside the USA, as I really can’t stand such restrictions and all that.
I believe it is far better to be in the restriction-free zone instead of having to think twice before doing something that we should be free to do!00
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