Last update: 2 September 2020
5 min read

Seychelles Forex Brokers & SIBA Regulation

Do you want to find the best SIBA regulated brokers in the Seychelles? Read on to find out more about what SIBA is, what they do, and even pick up a few tips on how to safely trade at the best brokers regulated by SIBA.

SIBA stands for Seychelles International Business Authority and is situated in Seychelles, a large group of islands off the African east coast. SIBA is a one of the lesser-known regulatory agencies that oversees regulatory protocols for all companies wishing to do business in Seychelles. SIBA is responsible for issuing trade licenses for offshore companies and is one of the recognized regulatory agencies in the African continent.

Want to find out more about the best SIBA regulated brokers? Check out our full expert guide below.

Best and most trusted forex brokers in April 2024

Will SIBA keep my investment safe?

SIBA seems to be committed to preventing money laundering by updating their Anti-Money Laundering regulations on a periodic basis. This is done to ensure that Seychelles is not regulated into a specific category of countries where money laundering is a significant issue.

Seychelles is also dedicated to being in the good books of several UN nations by ensuring that their regulatory guidelines are modified to suit the rules prescribed by major countries of the world. However, where SIBA fails is the lack of initiatives to carry forward the regulations and supervising companies to ensure that they adhere to the rules – without indulging in any financial misconduct in the name of profits and continued investments.

What is SIBA?

SIBA forex brokersSIBA Financial Services Authority (FSA) was introduced in the year 2013 and, therefore, is relatively new to the forex regulation industry. SIBA does not regulate brokers directly, as all non-banking financial companies are regulated by the Seychelles Financial Services Authority.

What does SIBA do?

The main responsibility of the SIBA FSA is to license, regulate, and develop financial companies in the Seychelles to ensure that the consumers are protected against a wide range of financial frauds and abuse.

SIBA regulated brokers have to follow a specific set of regulatory guidelines that are developed under the Financial Services Authority Act of 2013. The small nation has been working actively to establish itself as a recognized offshore business hub alongside the best brokers from Germany and the USA, as it is entirely dependent on importing new businesses to the nation so as to sustain a healthy economy.

What guidelines do SIBA regulated brokers follow?

Seychelles is a developing nation that is working on building a global presence. Therefore, SIBA is still in the primary stages of regulatory evolution, as the official resources of SIBA are not maintained according to professional standards.

The SIBA’s FSA website is also incomplete. The legal framework and the regulated entities section indicates a lack of professional touch and the ability to sustain consistent performance to meet the stringent global standards. This makes it hard for consumers to perform a comprehensive research into member companies before depositing funds into a broker.

These inadequate online resources could lead to investors simply moving on to another regulated broker, irrespective of whether the SIBA regulated broker they have chosen is a reliable company or not.

How to find out if a broker is SIBA regulated

The quickest way to check whether a broker is SIBA regulated is just to look at the broker’s website. Typically, brokers are very vocal about all of their licenses. After all, it’s a sign that they can be trusted. However, how do you know they’re telling the truth?

Normally, the smart move is to check the regulator’s website instead. Most of them carry a full list of all regulated brokers. The issue is that sometimes the SIBA website is a little behind, which means the information isn’t totally reliable.

Why can’t I find too many SIBA regulated brokers?

SIBA FSA was only introduced a few years ago and has been unable to penetrate the forex market like the traditional regulatory agencies. Seychelles also doesn’t offer any great advantages or incentives for companies that wish to set up base in the country. Therefore, most brokers prefer to be regulated by popular regulatory organizations such as the CySEC, FCA, NFA, and the CFTC.

Seychelles is also limited when it comes to the geographic location and operational freedom. Most brokers are looking to access a huge chunk of the market by basing their headquarters in prime locations such as the EU and Asia. Seychelles, being an African country, lacks the appeal of European regulatory agencies, and severe climatic conditions hinder the peaceful operations for any institution.

Does that mean there aren’t any SIBA regulated brokers?

There are a handful of SIBA regulated brokers that offer brokerage services for clients across the globe, but these brokers are not known to be reliable when it comes to consistent financial services or protection of client funds. Companies that are not regulated by strict regulatory agencies often tend to deal in financial malpractices to sustain their business model.

While the SIBA is committed to ensuring a fair and honest participation in the financial markets, any strict action against its member companies will conversely affect their revenue. Therefore, SIBA usually doesn’t levy any harsh penalties to companies for financial crimes. The downside of this is that consumers lose trust in the effectiveness of the SIBA’s regulatory guidelines.

Should I choose a broker regulated by SIBA?

Choosing a broker or any other financial company regulated by SIBA should be done with great care. It is essential from a consumer’s point of view to protect their funds and enjoy good quality services when it comes to trading the risky financial markets.

While the SIBA is a recognized entity and the companies regulated by them are mostly committed to the welfare of their clients, it is possible for clients to be tricked by companies who are simply out there to perform financial fraud and siphon off funds from unsuspecting users.

Frequently Asked Questions (FAQs)

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