Top Listed IFSC Forex Brokers
Before you look for the best brokers regulated by the IFSC, it will help to learn about the organization. Here, our experts will walk you through what the IFSC is, and tell you what their responsibilities are. We’ll also pick out some of the very best IFSC regulated brokers.
Belize may not be the first country which pops into your thoughts when considering trading, but it’s becoming a very popular country for brokers looking to set up a business.
There are a number of reasons it has become a popular offshore location for brokerage firms. It is quite simple to form a shell company in Belize, as there are no requirements for companies to be based in the country. And forex brokers who choose to set up operations in Belize can also enjoy certain tax benefits. For example, they will not have to pay any taxes on earnings made outside of the country.
Belize also has some very strict secrecy laws, which make it nigh on impossible for governments and researchers to uncover the owners and shareholders of a company.
Here’s our list of the best IFSC regulated brokers:
Best forex brokers regulated by IFSC
When looking for the best IFSC regulated brokers, safety should be the number one priority on your list. That means making sure their regulation is up to date – something you can find out more about below.
If you’re looking for specific brokers who are excellent and have an IFSC license, we can recommend the following:
Does a Belize regulated broker offer much protection for traders?
Belize has become a popular location for brokers who prefer a favorable jurisdiction. Its status as a tax haven and the relatively lax regulatory framework have made it easy for brokers to obtain a license and run a business from Belize.
While Belize is known for having a light touch with regards to financial market regulation, it is nevertheless better than a number of other offshore jurisdictions. We should, however, point out there are a number of other regulatory bodies which offer far more protection. So, remember to take this into account when considering a broker in Belize.
What is the IFSC?
Financial regulation in Belize is undertaken by the International Financial Services Commission (IFSC). All market participants and exchanges are regulated by the IFSC, and it is also responsible for setting and enforcing financial market regulations.
What does the IFSC do?
The role of the IFSC is to keep investors like you safe when trading. To do this, they monitor brokers and make sure they’re abiding by certain laws and rules.
As well as being responsible for brokers, the IFSC is in charge of:
- Promoting, protecting and enhancing the country as an international financial services center
- Regulating the provision of international financial services
- Issuing operating licenses to brokerage firms, brokers, and other financial service providers
- Supervising and controlling Licensed Investment Services Companies, mutual fund management companies, and investment consultants
- Imposing disciplinary penalties and administrative sanctions on any financial providers who fail to follow the rules
What is a IFSC regulated broker?
Financial services provided in Belize are regulated by the International Financial Services Commission, or IFSC for short. A large number of companies have looked to Belize when setting up a brokerage business, because the cost of incorporating and becoming regulated is very reasonable when compared with other countries. It has also been said that regulation in Belize is a little on the soft side, with the requirements for IFSC regulated brokers being fairly limited.
Many experts are also commenting on the basic requirements of MiFID and casting a similar note of disappointment, with the requirements in Belize being cited as being much lower. Unfortunately, not everyone is able to choose a top regulated broker and having a broker with – at the very least – a recognizable license is better than choosing one that is completely unregulated.
How you’re protected by the IFSC
Regulated brokers in Belize do, however, offer investors a certain amount of protection and a certain level of accountability is expected. Here are some of the further requirements:
- The need for a reasonable level of unimpaired capital. Originally, this was at least $100,000, but has since been increased by the IFSC to $500,000
- Segregated accounts must be used for client funds
- Monthly reports have to be submitted to the IFSC and they have to include details such as number and volume of trades and unimpaired capital
- Clients of IFSC regulated brokers have to be given monthly statements
- Must show itself capable of dealing with customer complaints
While the IFSC receives a lot of criticism for its soft approach to financial market regulation, it is in the process of changing its tactics and beefing up the regulations.
The IFSC and recent changes to forex regulations
As with many other regulatory bodies and the regulation of market trading firms, the IFSC regularly assesses the usefulness and effectiveness of its rules. In recent years, there have been a number of changes regarding fee requirements and capital requirements. These welcome changes are adding a little more protection for traders in Belize.
Compared with a number of other regulators, providers of financial services in Belize were able to enjoy low capital requirements and very slack licensing fees. A new agenda has recently been outlined by the IFSC and regulated entities now have to pay double the previous licensing fee. $1,000 must now accompany new applications, and this fee is non-refundable.
There has also been a significant increase in annual licensing fees from $5,000 to $25,000. IFSC regulated brokers and those offering commodity-based derivative instruments – and other securities – have now had a minimum capital requirement of $500,000 imposed.
Complaining to the IFSC
If you have a problem with the way your broker is operating, try to speak to them directly. When you’re able to resolve the issue one-on-one, it means a much quicker outcome compared to using the IFSC as a go-between.
However, in some instances, you’ll need some extra help. When this is the case, head over to the IFSC website. From there, you’ll be able to fill out an online contact form. It’s a very straightforward form that includes your name, email, country, and a section where you can explain your issue.
If you prefer, you can also contact the IFSC by email, physical post or phone – all of which are provided on the contact page. However, it’s advisable to complain in written form so you can keep a track of all correspondence.
How to check if a broker is IFSC regulated
The IFSC regularly updates its list of licensed service providers and it is easily accessible for consumers on the IFSC website. The advice given by the IFSC is to not deal with any entity if its name does not appear on the list.
You should also check the provider’s license covers the service you will be using them for, as a separate license is required in Belize for each kind of service or activity. Those of you looking for licensed and regulated brokers in Belize will mostly be interested in List J, which relates to licensed service providers for trading in foreign exchange services.
It is advisable to check any regulation information a broker may provide on their website. There are regular cases of brokers providing false or misleading information. It may state a broker is licensed by the IFSC but you would be advised to check this information is true.
It is also possible to check a list of warning notices which have been issued by the IFSC.