Are you searching for the very best FSPC regulated brokers? As a relatively small organization, it can be tricky to find top brokers regulated by the FSPC. But our experts are here to help. Read our expert guide to learn about what the FSPC is, what their responsibilities are, and a bit more about finding the best FSPC regulated brokers. Choosing a forex broker is one of the most significant decisions you’ll have to make before embarking on your trading career. Make the wrong decision and it has the potential to cost you a lot of money.
In the worse case scenario, you risk losing all your investment.
Forex trading is not regulated by one single regulatory body. Instead, individual countries enforce their own regulations. There are a number of these regulatory agencies which are well-known, such as the FCA, CySEC, and BaFIN. But there are also a number of other less well-known bodies. Those of you looking for brokers registered in the Cook Islands, Marshall Islands, Mauritius, Saint Vincent and the Grenadines, Seychelles need to be considering FSPC regulated brokers.
Best and most trusted forex brokers in October 2024
Is it safer to use an FSPC regulated broker or an unlicensed one?
When you type “forex brokers” into your favorite search bar, the hits you get will generally be for licensed and regulated brokers. And they’ll tend to be based in countries where the financial markets are well regulated. However, there will also be a few offshore brokers who are based where regulation is non-existent or very lax. And some who have made the decision to not worry about being licensed or regulated. While regulation may be seen as adding to a broker’s credibility, there are a number of reasons why certain brokers choose to walk a different path.
Why do brokers choose to be unregulated?
One of the main reasons is that being unregulated can significantly reduce operating costs. Obtaining and keeping a license can be very expensive. An FCA license, for example, has been estimated to cost millions. The capital requirements set out by regulatory frameworks such as MiFID also act as a barrier for many new brokerage firms because they simply can’t raise such large amounts of capital.
Additionally, a number of unregulated brokers are located in offshore tax havens, which means it is possible to reduce the tax burden by significant amounts. Operating without a license also makes it possible for brokers to offer a different range of products, or cater to the needs of customers they wouldn’t have been able to serve with a regulated company.
Beware of unregulated brokers’ intentions
But let’s not forget those unregulated brokers who have chosen to operate in such a way for much more sinister reasons. In other words, those that want to take advantage of their clients. We were able to find a number of instances where an unregulated broker has been proved to be participating in fraudulent behavior or unfair practices. Naturally, this has cost their clients a great deal of money.
There is also very little recourse if an unregulated broker decides to close up shop and won’t return client’s money. The fact the brokers in question were unregulated left clients with no one to turn to for help.
With this in mind, it is almost always the better option to use a broker which is officially regulated – even if it’s by a lesser-known organization like the FSPC.
What is the FSPC?
FSPC stands for Financial Service Provider Commission. This independent company offers a registration system which records all firms, individuals and other bodies which are accredited as FSPC regulated brokers. It also lists licensed entities in other recognized jurisdictions. If you are looking for brokers registered in the Cook Islands, Marshall Islands, Mauritius, Saint Vincent and the Grenadines, or the Seychelles, you are able to search the register to confirm information.
What does the FSPC do?
The most important thing for traders to know is that the FSPC regulates all the best brokers in the areas mentioned above. But they also have a wider responsibility regarding other financial institutions. The FSPC accredits or registers the following:
- Stock brokers, asset managers and financial advisors
- Investment firms
- Certain issuers of electronic money
- Forex brokerage firms
- Debt collectors
- Any firms operating an electronic system related to lending
What are FSPC regulated brokers?
In order for a broker to appear in the Financial Service Provider Register, it must be reviewed by an independent organization. This involves being independently assessed for complying with certain standards for performance, liquidity, and transparency. An FSPC registered broker has to comply with the following obligations:
- Minimum company equity of $35,000
- Competency, knowledge and skill levels of responsible managers
- Compliance according to international corporation standards
- Training and competence of representatives
- Adequate financial, technological and human resources
- Compliance, risk management and managing conflicts of interest
- Dispute resolution services
The FSPC has the right to revoke registration if a registered entity receives more than three different complaints within a three-month period. You may be thinking these obligations are little more than a generalization of the quality of service you have come to expect from any kind of company. However, it’s often the case that any kind of regulation is better than nothing at all.
At the same time, there are a number of better known and far stricter regulatory bodies. In order to protect your rights as an investor and safeguard your investment in the best way possible, you might want to consider one of these instead.
FSPC complaints and mediation
Mediation is an Alternative Dispute Resolution (ADR) procedure which is used for settling disputes. Other procedures include arbitration or negotiation. ADR procedures tend to cost less and take far less time than other complaints procedures. During the process of mediation, the parties involved in the dispute are brought together. A neutral third-party acts as the go-between. The aim of this type of complaint procedure is a way of enabling parties to reach a voluntary resolution of the issue. It is also a useful procedure for litigants and attorneys who are antagonistic toward each other, or who have unrealistic expectations regarding a case.
Meditation is often the last resort before taking the complaint to trial. When mediation takes place, the parties meet together with the go-between and are given the opportunity to state their case. The parties are then separated and the go-between consults with each in turn, going back and forth to relay offers and responses. Any information shared with the go-between is confidential and the mediator is also allowed to give his or her own thoughts regarding the complaint.
The ultimate goal is for both parties to agree on a resolution.
How can I tell if a broker is FSPC regulated?
Whenever a broker attains a license from a regulator, they almost always make this information very easy to find. After all, it helps prove that they’re a legitimate outfit. Look at the footer of any broker’s website and you should find their license number or numbers. However, some brokers choose to upload false or outdated information. To avoid this issue, you can double check their license number with the FSPC directly.
Other brokers by regulation authority
Frequently Asked Questions (FAQs)
FSPC stands for Financial Service Provider Commission. It’s a financial regulator whose aim is to ensure trades are safe and lawful. They cover an area which includes the Cook Islands, Marshall Islands, Mauritius, Saint Vincent and the Grenadines, and the Seychelles.
The role of the FSPC is similar to that of other regulators who monitor brokers in Australia, Spain or Russia. Primarily, the FSPC is there to make sure traders are protected and that brokers are following local laws and financial rules. However, the FSPC is certainly not as established as other international regulators.
Although FSPC regulated brokers aren’t unsafe per se, there are certainly much more powerful regulators in Germany, the UK, the USA and so on. Other regulators also have more authority to implement fines, which can act as a deterrent. Nonetheless, it is almost always better to use a regulated broker than an unregulated one – so it’s worth checking out the best FSPC regulated brokers.
If you have an issue with your broker, the FSPC can mediate to find a solution. While some regulators have the power to impose fines and seek compensation, the FSPC is more focused on finding an amicable outcome. They’ll encourage contact between you and the broker and try to reach an acceptable outcome.
Most brokers will make it very clear that they have one or multiple licenses, so it should be easy for you to find out if they are FSPC regulated. Head to the broker’s website and have a look at the footer, or the ‘About’ section. You should be able to find regulatory information, including any license numbers. To make sure it’s 100% accurate, you can check out the latest FSPC list of regulated brokers.
