List of FCMC Regulated Brokers
Latvia has a strategic position sat between Russia, Germany, and Scandinavia and in the past has enjoyed acting as a trading hub between these areas. It has a very healthy foreign exchange industry and is able to cater to local and overseas traders. When it comes to Forex trading an important consideration is to choose a Forex broker that is licensed and regulated by a local regulatory body. There are a number of well-known regulators such as the FCA in the UK, BaFIN in Germany, and CySEC in Cyprus. But each individual country usually has a regulator of its own. In Latvia, financial services are regulated by the FCMC, as are Forex brokers in Latvia.
What is the FCMC?
FCMC stands for Financial and Capital Markets Commission and it is an autonomous organization which is responsible for supervising insurance companies, insurance brokerage firms, market pension funds, payment institutions, electronic money institutions, and participants of financial instruments markets. It was created to provide stability and competitiveness, while also serving to develop financial markets and protect market investors. The Commission was created in 2001, following the passing of the Law “On the Financial and Capital Market Commission” which was adopted by the country’s parliament in 2000. The reason for its creation was the expansion of financial markets and the need to merge supervisory authorities into one cohesive regulatory body. It provided for more efficient supervision of financial transactions, and the opportunity to assess market conditions in a more objective manner. Thereby easily identifying risk factors affection market participants and clients. Up until the creation of the Commission, financial markets in Latvia had been supervised by the Credit Institutions Supervision Department of the Bank of Latvia, Securities Market Commission and the Insurance Supervision Inspectorate.
Most Prominent FCMC Regulated Forex Brokers In 2019
|$ 50||Check Website||Review|
The FCMC tightens the rules after a run of scandals
A number of scams and fraud scandals have caused Latvian traders to be far more cautious and in turn have forced the FCMC to beef up the regulations. Forex trading customers are much more educated on risk management and while their appetite may not have disappeared they are using much less risky trading strategies. The run of scandals wasn’t helped by recent criticisms from the US. The US is calling for much stricter supervisions of transactions from the country’s regulator following a string of money laundering scandals. The head of the Commission has chosen to resign in light of the criticisms. His action is aimed at reducing suspicions, rumors and the shadow of doubt, said to be looming over the regulator’s head.
FCMC regulated brokers and MiFID
Any FCMC regulated brokers also receive passporting rights to offer their services across the European Economic Area. This is due to the passing of MiFID. MiFID stands for Markets in Financial Instruments Directive and was passed to harmonize standards and investor protection across the EU. It is currently being revised with MiFID II coming into effect shortly. MiFID covers three areas pertaining to European financial markets:
Business conduct – This includes rules relating to best execution, client categorization, investment advice, commodity derivatives, reporting requirements, client order handling, and marketing reporting
Business organization – This includes rules relating to licensing, cross-border passporting, risk management, compliance arrangements, record-keeping, conflicts of interest, systems and controls, controllers and governance.
Transparency of the equity market – This includes rules regarding pre-trade and post-trade transparency
One of the areas included in the Directive is the need for regulated brokers to offer a process for handling consumer complaints and to settle disputes.
Does the FCMC handle customer complaints?
The Financial and Capital Market Commission (FCMC) provides information regarding the handling of consumer complaints and settling disputes so that consumers are aware of what they have to do should they have a problem with an FCMC Forex broker, or any other institution providing financial services. It does this to make selecting the right institution to address the complaint to much simpler. The FCMC is not authorized to interfere with contractual relations between a service provider and client or resolve disputes between the parties. Should there be a violation of consumer rights it is the duty of the CRPC (Consumer Rights Protection Centre) to investigate the matter. It is, however, the responsibility of the consumer to try and resolve the dispute with the financial provider in the first instance.
Why it’s important to choose an FCMC regulated Forex broker
It’s not possible to stress the importance of Forex regulation enough, but we will keep on trying. You will find the theme running across many of our pages, and we feel it only fair to mention it again. Regulatory bodies reduce the likelihood of consumers being scammed and force financial service providers to act in a fair and honest way. Many countries around the world will have its own regulatory body, and there are a number with a much better reputation than others. However, trading Forex in a country where there is no regulation, or choosing a broker that has no license means you’ll be choosing a broker that may well be getting away with very questionable behavior. Those of you trading from Latvia are in a much better position than a number of other countries, due to its membership of the European Union. MiFID ties European regulators together and is evidence of the EU’s commitment to providing a common market for financial services. It means Forex brokers are able to offer their services in other EU member states, and you as a trader can be served just as well by another European regulatory body. For example, the Financial Conduct Authority in the UK. The scope of Forex regulation does vary from country to country with some deciding to go above and beyond the basic requirements of MiFID. MiFID, however, has set in place a number of protections for traders and continues to work hard to ensure brokerage firms operating in the EEA operate on a level playing field.