With a daily trading volume of over $5 trillion a day, the foreign exchange market, also called the forex market, is the world’s largest market. The size and the deep liquidity of the forex market, along with 24-hour trading 5 days a week, make it an appealing choice for traders.
Governing Body in the UK
The Foreign Exchange market is growing by leaps and bounds but lack of transparency in the market has left it vulnerable to numerous instances of malpractice and manipulations. In the United Kingdom, the Financial Conduct Authority (FCA) acts as a watchdog to ensure fair and ethical business conduct. Financial Conduct Authority – regulated foreign exchange brokers must adhere to a number of industry standards.
Of particular importance is the Financial Conduct Authority requirement that firms keep client funds separate from company funds. These segregated deposits cannot be used as company assets if the brokerage firm becomes insolvent.
BlackBull Markets are soon to open an office in London in the UK and presently they have a server hub there. They are trying to gauge the markets in the UK so they can understand the needs of the customers since customers hailing from different ethnic backgrounds have different needs.
BlackBull Markets must weigh their options and then start to penetrate the market in the UK which offers a diversity of clients with varying investment horizons so that they can soon rise to become the best broker in the UK as well. Investors looking to invest in the forex market can choose BlackBull Markets as their investing agent as it has the recognition of being the best broker worldwide.
Regulations in the UK
In January 2015, in the UK a well reputed foreign exchange firm applied for insolvency after the Swiss National Bank’s surprise decision to abandon the peg against the euro, this lone event put the foreign exchange traders on the radar of Financial Conduct Authority, especially in the United Kingdom.
However, unlike stocks and commodities, foreign exchange trading has no central exchange or clearing house, which makes the markets very volatile and sometimes unreliable.
Therefore, in order to win the trust of the customers the foreign exchange brokers must establish their willingness to provide services which are free from any market manipulation, only then will it be able to build its image among its customers and establish a worldwide dominion.
Unexpected Events leading to reforms in Regulations in the UK
The January 2015 event involving the well-reputed firm of UK underscores the importance of using a broker that is regulated by the Financial Conduct Authority. Totally unexpected events which massively rattle the markets – sometimes referred to as black swan events – can happen at any time and wreak havoc and chaos among the investors.
The financial markets were thrown into turmoil by the Swiss decision and a number of foreign exchange brokers suffered severe losses with some of them going completely bankrupt. Fortunately for the customers of the well-reputed firm, it was regulated by the Financial Conduct Authority.
Among the leading Financial Conduct Authority – regulated forex brokers in the UK, the majority are actually based abroad. In many cases, this means that they are not only regulated by the Financial Conduct Authority but also by other bodies, such as the National Futures Association (NFA) in the United States.
While the foreign exchange industry continues to develop and improve on a continuous basis, traders must remain competitive and provide clients with upgraded financial services. Foreign Exchange traders must also remain vigilant in scrutinizing where they place their funds for investment so that the money of their client are utilized in a proper and beneficial manner, thereby increasing the wealth of the investor, instead of eroding it through unwise business decisions.