Finding The Best Forex BrokerFinding the best forex broker is one sure way to fighting forex fraud. And although there are many success stories of rags to riches in the online currency trading market, there are just as many about those who have lost everything just as fast. And many have been defrauded.Since the Commodity Future Modernization Act (CFMA) in December 2000, there have been 87 cases of forex fraud prosecuted by the U.S. Commodity Futures Trading Commission (CFTC), $115 million in restitution and $168 million in fines ordered and 24,600 victims of fx fraud, who lost a total of $380 million. The [CFMA] did not extend regulation to the CFTC over the (forex) spot market in any way shape or form. What it did do is address the off-exchange forex market with respect to futures and options. But not the spot market. The CFMA attempted to clarify the CFTC’s anti-forex fraud authority regarding retail forex futures and options trading. Entities acting as counterparties for retail forex futures and options transactions were required to register with the CFTC as futures commission merchants (FCM) and join the NFA, although some may be registered as other enumerated counterparties (e.g. broker-dealers through the National Association of Securities Dealers). The requirement however hinged on a definition of ‘futures.’ Platforms that can prove they offer spot and not futures fall outside that rule. Entities only registered as FCMs that act as counterparties to retail forex transactions are required to submit weekly and monthly financial reports to the NFA and are subject to regulatory audits. Thus monitoring for forex fraud. The NFA also offers a free database, BASIC, which provides registration and membership information and shows regulatory actions brought against CFTC registrants by the CFTC, NFA or exchanges. It also lists NFA arbitration awards and CFTC reparations cases. But even with this tool available, finding the best forex broker can be tricky, because you also have to watch out for the mere appearance of registration. You could have a situation where a company is an affiliate of a registered entity, you may see an NFA ID number that appears to have a similar name, and so you assume that the entity is registered, when in fact it is merely affiliated, which means it basically doesn’t afford you (the protection).” And this is one red flag that may indicate, that this may not be the best forex broker available for you. By engaging unregistered affiliates, unscrupulous brokers are able to trade against their customers, a new trend in abuse and forex fraud.
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