Let’s Explain About Forex Trading in Gibraltar by Looking at FSC Forex Brokers
Located at the southern tip of the Iberian Peninsula, Gibraltar is a British Overseas Territory. It was first captured from Spain by an Anglo-Dutch force during the War of the Spanish Succession in 1704. It was later ceded to Britain “in perpetuity” under the Treaty of Utrecht in 1713. It served as an important Royal Navy base during World War II as it allowed the Navy to control the entrance and exit to the Mediterranean Sea. Nowadays, Gibraltar is a country whose economy is based mainly on tourism, online gambling, shipping and financial services. So, for those of you looking for Forex brokers in Gibraltar, there should be plenty of choices.
How financial services in Gibraltar are regulated
Financial services in the British Overseas Territory of Gibraltar are regulated by the Gibraltar Financial Services Commission. Gibraltar is part of the European Union as it joined in 1973 when the United Kingdom did. It is classed as a Special Member State territory, under the provisions of the Treaty of Rome relating to European dependent territories. However, it does have some very attractive benefits including exemption from the Common external tariff, the Common Agricultural Policy and also it is not required to levy value added tax. GFSC regulated brokers are also able to take advantage of the passporting of financial services. This means that subject to notifying the GFSC, which is required to determine whether certain criteria are met, it is possible to offer services throughout the EU and the EEA, with no need to obtain separate licenses from the host country.
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The aim of the Gibraltar Financial Services Commission
The GFSC actually has several aims including:
- Allowing consumers access to financial services products which meet their needs, provided by trustworthy and competent firms
- The provision of financial services regulation in an effective and efficient manner
- Promoting good business practices
- Protecting the public from financial loss
- Enhancing Gibraltar’s reputation as a financial center of high quality
It is possible to check whether a broker is regulated by the GFSC, as the company will be issued a license or letter of authorization which sets out the services the firm is allowed to provide. It is possible to request a copy of this license or letter of authorization from the financial provider. All GFSC Forex brokers are also required to state they are authorized by the GFSC on letterheads, advertisements, stationery, business cards, and also on their website. Alternatively, there is the option of contacting the GFSC and asking them directly or checking on the GFSC’s website.
What you can do if you have a complaint about a GFSC regulated broker
As a regulatory body which operates in accordance with the basic requirements of MiFID, the GFSC has a complaints procedure for consumers to follow if there is a problem with a GFSC regulated broker. The first step should be to contact the firm and raise the complaint directly with them. You should make the complaint in writing because this will ensure there is a record of your communication. Any Forex brokers in Gibraltar, or other regulated entity, is required to have appropriate procedures in place for handling customer complaints. These procedures should be designed to ensure any complaint is addressed appropriately and dealt with efficiently and thoroughly. If you are unhappy with the resolution given by the firm, or you consider there to be a case for financial compensation the matter will have to be taken to the Gibraltar courts.
What is the GFSC able to do to help?
Unfortunately, while it is possible to report your complaint to the GFSC, the Commission has no legal role it can play to resolve disputes between consumers and GFSC licensed firms. The Commission is unable to give advice, or provide arbitration in commercial disputes. The Commission appreciates this can be frustrating, but stresses the importance of sharing any complaints. Complaints raised with the GFSC could indicate there are concerns about the way in which a regulated firm is being managed. And could highlight a licensed broker is breaching the GFSC regulatory requirements. It also states that depending on the nature of the complaint it could decide to initiate its own investigation. Future news is providing further hope for Forex traders in Gibraltar, as the GFSC is planning to create a Financial Services Ombudsman sometime in the future. This Ombudsman will be available when a complaint is not resolved to the consumer’s satisfaction. The service will be free and act as an efficient and effective alternative way to resolve disputes. And will also bring Gibraltar into line with more effective and well-regulated bodies.
Advice on choosing a GFSC authorized investment services firm
Never be afraid to ask your prospective financial services provider question. Whether they are about the level or scope of the services a good investment provider should be happy to answer any of your questions. We should stress, however, that not all GFSC authorized entities are the same and they will certainly offer different levels of service. So here are a few tips to help you with your decision:
- Always take a few firms into consideration. Ask about experience and professional background. Ask about their authorization and what activities are covered by their license.
- Check out the charges you can expect to pay, as these can vary considerably. You should be able to find a schedule of fees or commission charges on the firm’s website. Alternatively, get in touch with the company and request one.
- Check whether the Forex broker in Gibraltar uses segregated accounts.
- Consider the goal of your investment.
- Enquire what will happen to your investment if the firm ceases to trade.
- Don’t make your decision until you have all the information and understand it.
- Don’t rush, take your time, and don’t be pressured into making a decision.
- Don’t sign up for anything until you have read and fully understood all the terms and conditions. This is the one step which trips many traders up and ends up costing a significant amount of their money.