Unregulated Brokers First Signs

Chris Lee
Brought to you by: Stratton Markets LogoYour capital is at risk

“If you think compliance is expensive, try non-compliance” – Paul McNutty, Former U.S. Deputy Attorney General

This rough message from the former US Deputy Attorney General, Paul McNutty should be a real wake up call for all the brokers out there that are trying to evade regulation, in search of greater profit or for various other reasons.

And in all fairness, to paraphrase McNutty, compliance does come with a great cost – that of having to be fair, honest and transparent in all your services and offers. Plenty of times, this way of conducting a business leads to companies losing clients, investments, or   even partners mostly because they have stricter conditions and can’t offer incentives and really high leverages.

But the real enigma here is how can you spot an unregulated broker and make the right choice, in an overserviced industry? The good news is that there are a few triggers that should get you questioning the real intentions of the broker you want to trade with.

As you might suspect, the most important detail about a broker is regulation. It is the one detail that differentiates the broker from scammers. The first thing you should do to know more about your broker’s license and regulation is to thoroughly check their website, paying greater attention to the bottom page text.

Look for a License number and the regulatory body that has issued it. Oftentimes, regulated brokers also offer a link to the regulatory body’s website, where you can find all the services the broker (or the group of companies from which this one is part of) can freely provide, as well as the countries it can service to.

Pay great attention to the fine print, as a Registration Number is not the same as a Licence Number, and many brokers try to scam traders this way. A registration number simply states that the regulatory entity acknowledges the company as existing in its jurisdiction and that it provides a certain suite of services. This, however, does not bind the company to follow the set of rules set in place by the regulator.

Stay tuned for next month’s article, that will tell you more about the main European and EEA regulatory bodies.

Another alarming sign should be receiving any kind of promise of gain or profit. Since immediately after you register with your broker, you’ll start receiving calls and messages, mostly from your Account Manager/ Sales Rep, make sure to carefully listen to their pitch. Should these make any kind of promise of successful investment leading to gains or profits, you should reconsider trading with the company, and ask for further details regarding the regulator.

Transparency should be ensured for all the broker’s information, offers, services. Should you at any point get mixed information, or spot any attempt from the broker/ Account Manager to conceal information, make sure to double check the honesty of your broker.

One emergency solution remains to contact the regulatory body, that will be able to give you all the necessary information about the broker, or start an investigation regarding it.

Are you ready to trade?

Sign up with Stratton Markets LogoYour capital is at risk
Chris Lee

Latest news

Cybercrime still on the rise – be wary of potential scams
While our attention may be drawn to the latest news regarding the COVID-19 pandemic or the Tokyo Olympic Games, cybercrime statistics continue to grow unabated in the shadows. Read more
How to Learn to Trade Unpredictable Summer Markets
Recent events in the financial markets have left traders and investors dazed and confused. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2011 Global CFD & FX Broker
Number One Broker
BEST FOREX BROKER Visit broker
5
#2 ForexTB logoYour capital is at risk Founded: 2015 Global Forex & CFD Broker
Number One Broker
LOWEST FEES Visit broker
4.9
#3 Tickmill forex broker logoYour capital is at risk Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#4 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#5 Forex Broker Pepperstone LogoCFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9

    Forex Fraud Certified Brokers

    AvaTrade logo
    FXTM Logo
    Plus500 Small Logo
    BlackBull Markets Logo
    City Index Logo
    HYCM Logo
    Vantage FX logo
    Forex.com Logo
    IC Markets Logo
    LegacyFX Small Logo
    Exness Small Logo
    Pepperstone
    IQ Option Logo
    ATFX Logo
    skilling logo
    OctaFX Logo