November 29, 2017 National Bank of Georgia exhorted general public to be extremely careful regarding companies working in the FOREX industry. They also mentioned risks involved in relationships with unregulated brokerages.
FIXI Markets, as a company licensed and regulated by FCA, endorse and support this statement.
In addition, we want to give you a brief insight into the market of financial brokers just to clarify a few important hints about brokerages.
Foreign exchange and stock markets are saturated with different broker companies. Their offers are usually very similar and differ only in small details, which might seem insignificant for inexperienced customers.Meanwhile these actual details determine the security of your investment and conscientiousness of company's approach to business.
For instance, reliable and trustworthy brokers:
1) are licensed & regulated by authoritative financial organizations like FCA, ASIC, SFBC etc. Information about licensed brokers is public and easily accessible on the website of the corresponding regulator.
2) in accordance with the regulationswarn prospective customers about risks involved with trading.
3) hold every trader's funds in a segregated account held with an authoritative, regulated bank.
4) provide protection against default. For example, FSCS protection, which ensures that a client's first deposit up to £50000 is covered in case of company default.
5) have all the contacts with customers monitored by a regulator. All call records and text conversations are kept for no less than 5 years. Recordings are brought up in case of customer complaint to the regulator. If the complaint is approved, certain sanctions are applied to the company.In extremis, company loses license and its employees might get banned from the industry.
On the contrary to the aforementioned features, unscrupulous brokers are characterized by following unethical types of conduct:
1) They do not subordinate to any financial regulator or have a business license from such remote and inaccessible countries as Belize, Mauritania, Vanuatu, Panama, St. Vincent and Grenadines, etc.
2) They breach principles of confidentiality by making cold calls to attract new customersi.e. contact people without their permission.
3) They create unrealistic expectations of instant enrichment among customers. At the same time, unregulated brokers do not warn them about the expected risks. It should be noted, that FOREX trading is an activity with a high level of risk and requires a deep understanding of financial market and trading instruments.
4) With a purpose of luringcustomers towards them,unregulated brokers might offer them bonuses up to 250% of initial investment just for registering an account on their platform. Such behavior is unacceptable and goes against the credible regulations.
5) They offer their clients a seductively high leverage, in some case even up to 1:2000.Brokers with credible license usually offer leverage up to 1:400 as they are obeying the regulators' rules on treating customers fairly.
6) Often, for more persuasiveness they quote misleading certificates and awards granted to them by respectably sounding foreign sources, which, however, are incompetent and have no authority on the financial market. E.g.: The Best Broker in Caucasus Region according to Finance Magazine
We hope that by sharing these advices we help you in making a wise and informed decision. Our aim is to give prospective traders knowledge of the market for them to be able to invest more efficiently. Moreover, we care not only about our customers but also about transparency and integrity of the forex market itself. That is why we provide society with proper information about both industry and high risks involved in it.
For detailed information about the topic4 please visit www.fiximarkets.com .