Kuwait’s CBK Regulated Forex Brokers
Forex trading in Kuwait is becoming increasingly popular. Much like many other countries across the globe, investors are looking for new ways to increase their savings, and real estate, stocks and shares, and equities are no longer popular for the masses. Which may be one of the reasons Forex trading has taken on so quickly. When it comes to choosing Forex brokers in Kuwait there are a number of factors to bear in mind. The most important is whether the broker you are considering is licensed and regulated by a recognized regulatory body. If you are a resident in Kuwait you should be considering CBK regulated brokers.
What is the CBK?
CBK stands for Central Bank of Kuwait, and this is the body which offers a strict currency system on behalf of the State of Kuwait. It is also responsible for regulating the Kuwait stock market as well as the Kuwait Stock Exchange, the Ministry of Commerce and Industry and the Ministry of Finance. The Central Bank of Kuwait has been around for a number of years, more than four decades in fact. It was established following the passing of Law No 32 in 1968, which was concerned with currency, the Central Bank of Kuwait and the organization of banking business. The Central Bank replaced the Kuwaiti Currency Board, but is responsible for far more than just the issuance of banknotes and coins. Its core objectives are listed as:
- Issuing the national currency on behalf of the State
- Directing credit policy so as to contribute to the economic and social progress as well as enhancing the national income
- Stabilizing the Kuwaiti Dinar and enabling its free convertibility into other currencies
- Serving as a banker to the Kuwaiti government
- Supervising the State’s banking system
- Serving as a governmental financial adviser
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Those of you considering Forex trading, and the need for finding CBK Forex brokers, are also going to be interested in its supervisory functions. These include:
- Studying and analyzing the operations of new entrants in the banking and financial system
- Making proposals and recommendations for remedying problems faced by those under CBK supervision, such as CBK regulated brokers
- Developing and organizing the banking and financial systems of Kuwait as well as coordinating the work of both to enhance their role in the economy
- Analyzing data and information passed to the CBK by supervised entities and presenting any recommendations and proposals
- Conducting inspections of all regulated bodies in order to determine whether they are operating in compliance with CBK laws, other laws and resolutions
- Upgrading supervisory policies and procedures to ensure they are in line with international standards
Why it’s important to choose CBK regulated Forex brokers in Kuwait
When it comes to Forex trading one of the most important decisions you’ll have to make is your choice of Forex broker. There are hundreds, no make that thousands, to choose from so where should you start. Before you consider the trading environment the broker is making available your first port of call should be to check their license and regulation. Unfortunately, the increase of online trading platforms available has led to a number of brokers setting up business without any form of license or bona fide supervision. Which of course leaves you wide open to falling victim of fraud. Forex trading has no centralized marketplace and operates without a central exchange or clearing house. The only supervision of the market and its participants is undertaken by various regulatory bodies. Whether a broker chooses to be licensed and regulated is entirely up to them. The various regulatory bodies, in the case of Kuwait this is the Central Bank, are assigned the task of watchdog, providing licenses to those of good standing and with enough funds to run such a business. You’re possibly wondering why regulation is important, so let’s see if we can answer that question. The Forex market is currently one of the world’s biggest financial markets. Almost $4 billion trades are conducted every day. While it was originally the exclusive domain of banks and large corporations things have changed recently and more ordinary people, just like you, are choosing to trade with Forex brokers. This has meant there is a greater need for increased surveillance and regulation. The procedures for regulation aren’t the easiest and can be very time-consuming and costly, which is why a number of brokers choose not to follow such a path. Another problem with regulation is it is not consistent and can be very different depending on your location. But whatever the regulations, something is better than nothing at all. The biggest risk for Forex traders like you is illegal activity or schemes. Some examples are excessive commissions, high-pressure tactics, misrepresentation, and Ponzi schemes. Choosing a regulated broker in Kuwait will significantly reduce such risks. However, we should stress it doesn’t guarantee a broker will be 100% honest and above board. You will still need to stay vigilant and keep an eye on your trading account and your broker. And this applies wherever you may be located.
Choosing a CBK regulated broker means you get help with any complaints
The CBK has a Consumer Protection Unit which is tasked with consumer complaints. It is not authorized to deal with complaints pertaining to unregulated entities. The first step with any complaint is to contact the company and try and resolve the issue with them. Should you be unhappy with the resolution you will be able to raise a complaint, using the online complaint form, with the CBK. You will be required to include a copy of the company’s response to your complaint and any other relevant documentation. The issue will be investigated and you will be advised of any action the CBK decides to take. Whether you choose CBK Forex brokers or an unregulated brokerage firm is entirely your decision. However, we can only stress the importance of choosing CBK regulated brokers to afford yourself the best possible protection.