CFTC Forex Brokers

Introduction to CFTC

(Commodity Futures Trading Commission) Regulation

If you are new in money making industry, then you should probably know or if you are an experienced trader, then you should already know that USA’s supervision for trading is quite different from the regulatory bodies all over the world. They impose some extra rules through their regulatory. There are lots of regulatory bodies in USA. Among them, The Commodities & Futures Trading Commission or CFTC is one of the important and respected authorities of US financial market. This regulatory body formed in April 15, 1975 & mainly regulates future and option markets. Or in a nutshell, you can say CFTC supervises American companies who are dealing with either one or all of WAP’s, commodities, and Forex trading.

What Is the Role of CFTC in Broker Regulation?

Since CFTC deals with lots of instruments and brokers in US financial market, it has a huge responsibility there. And these responsibilities made CFTC’s role important for both brokers and investors. Its core mission is to ensure a health and competitive market so that to make the future market more efficient. Beside that, one of the most important responsibility is reviewing and designing the terms for the brokers those benefits both the brokers and their clients. Furthermore, it also has some other responsibilities. Let us explain in brief points:

  • First of all, every broker’s core mission is to protect the fund of both party i.e. The investors and brokers. And CFTC also respects this mission.
  • Besides, it also works for making the market scam & manipulation free by increasing the effectiveness of trade and healthy competition among the brokers.
  • It has a very strict guideline those are highly aligned to US financial market. As a result, following CFTC means following the rules of US financial market also.

However, you should also know that Securities and Exchange Commission (SEC) and the CFTC are brought in a single stock future under The Commodity Futures Modernization Act of 2000. Again, in 2010, the Dodd-Frank Act expanded the CFTC’s regulatory power into the swaps markets. More or less these are the mentionable role of CFTC in FX market.

What does mean “for CFTC REGULATED Broker” for a retail trader?

Now as a retailer you may want to know the straight answer that why CFTC Regulated Broker means a lot to you. However, as you are investing money so your main target will be making profit as much as you can. Besides, whatever the result of your trading is, you’ll always expect a market free of all kinds of manipulation and fraudulent and unethical trading practice. And finally you’ll look for the safety of your fund.

And a CFTC regulated broker can ensure all these factors because to be a CFTC broker every broker has to follow a set of CFTC’s rule. And those rule are designed in such a way that all unethical brokers will be automatically filtered or disqualified. That means, in a nutshell instead of researching about the quality and ethics of a broker randomly, you can check whether it is CFTC qualified or not. That’ll be more time saving and exact research for your future trade.

Transparency Policy: Regulatory Protocols on CFTC Brokers

It is not easy to satisfy both brokers and retailers together. But still if the fund and trading ambiance remain safe and sound by means of a common regulation, then we can say an authority is reliable and transparent.

How CFTC Regulation Can Protect You – Compensation Scheme

CFTC Regulated brokers are bound to follow the guidelines of the authority and it can protect you by following ways:

  • The first and most important part of CFTC is it has a strong policy against fraudulent and financial abuse. To filter out the cheats and dishonest brokers, all investment services firm must pass an intensive licensing process.
  • And giving approval doesn’t mean their duty is done. Rather it monitors the brokers every day & takes complains from the investors. Then depending on the urgency and weight of this complain it punishes the brokers. This punishment can be a warning, fine or even the cancellation of broker’s license.
  • Its constant supervision on both broker and market always act like a guardian. It gives the guarantee of proper trading, less manipulation and privacy of all your data or information.

Additionally, CFTC also provides a learning center for FX enthusiasts. So if you’ve a long term plan in money making world, you can acquire knowledge and skill using their tools and guides.

Verifying the Authenticity of CFTC Regulated Forex Brokers

For the retailers, this process is very simple. To verify the authenticity of CFTC regulated brokers, you just need to bookmark their website because it the official website of CFTC the list of all their member agencies are published. So any broker who doesn’t have CFTC regulation can’t claim their membership so easily. And if you find a broker like that feel free to inform CFTC authority so that they can take necessary steps regarding this issue.

CFTC Regulation & Forex Brokers in USA

For brokers, CFTC regulation is a very important trademark because it helps them to alleviate many problems of business operation & also to get trust from their clients.  Hence, if a broker follows the rule of CFTC it will also be aligned to this goal. And to do so, please study Commodity Exchange Act (CEA) & The Commodity Futures Modernization Act of 2000 carefully. Then align your company policy is such way so that it never violates any of these authorities directives. For the beginning it’ll be enough we guess. After that, CFTC itself will guide you to polish your policy.

FAQ: Frequently Asked Questions

Who Regulates Forex Trading in USA?

Commodity Futures Trading Commission (CFTC). Under the Commodity Exchange Act (CEA), it is the responsible authority giving assurance of a manipulation & scamming free trading market.

What Does CFTC Do?

CFTC regulates the brokers for US financial markets by means of a set of rules those ensure the quality & ethics of the market.

How Does CFTC Operate?

Under The Commodity Futures Modernization Act of 2000 CFTC operates. Besides, it also follows Commodity Exchange Act (CEA).

IF I have A Complaint against a CFTC Broker, What Should I Do?

CFTC approves the broker under certain criteria. So before you’ve a complain, they already researched on it & gave feedback to the broker. But still, you can convey your complains to CFTC. But complain must be relevant to CFTC rules. It means, if any of their act to you violate the rules of CFTC, it will be instantly recorded and the broker will be punished. But complains, those are irrelevant such as may be somehow you received unexpected behavior from their customer agent etc., these types of complains will not be accepted by them.

Are CFTC Regulated Brokers Reliable?

Definitely they are. But still, if you face any violent or unusual behave from a CFTC broker you can directly let the authority know the issue. You’ll get proper feedback.

How Does CFTC Regulation Help the Trader?

By making trading transparent, free of manipulation and stopping abusive practice on trading by the broker, CFTC regulation helps the broker to make a successful and reliable trading career.

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CFTC Forex Brokers 2024 List



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