U. S. Regulatory Agencies

Despite the forex market is the largest financial market in the world, it continues to be largely unregulated, in the essence that most of the brokers involved are unregulated. This is because There is no organization that monitors and oversees the currency trading occurring all over the world in the interbank. And As a results of the involvement of many unregulated forex broker claiming to provide better services, this gives chance for forex scams and frauds.

Even with the lack of some organization from different countries to protect forex, yet there are countries that monitor and oversee forex trading activity, like forex brokers, that happened within their borders. Example U.S.

Trading forex (currencies) in the United States (US) is popular among fx traders. Before any fx broker can accept US forex traders as clients, they must become registered as Retail Foreign Exchange Dealer (RFED) by the financial regulatory body, the Commodity Futures Trading Commission (CFTC) and also regulated by the National Futures Association (NFA) as a Futures Commission Merchant (FCM). Therefore if you're trading in U.S you should be aware of those two major regulatory agencies mentioned earlier.

Commodities Futures Trade Commission (CFTC)

The CFTC is a federal regulatory body that was established by Congress in 1974 with jurisdiction over the commodity futures (derivatives) markets. The same legislation authorized the creation of the registered futures associations, it was in 1982 the NFA commence as a self-regulatory agency or organization for the US derivatives industry. In the United States, we like to call the CFTC… Big Brother. It was meant to give individuals in futures and commodities trading. Since futures include the currency market, the CFTC “naturally” protects forex traders as well.

From the it was established to Date, the CFTC has undergone many changes in hopes of improving trading conditions and creating a level playing field for everyone. The CFTC is in control for publishing the Commitments of Traders Report (COT) each Friday (the CFTC receives data from submitting firms on Wednesday, which it corrects and verifies for release on Friday).

During the presidential regime of that time, Five commissioners were appointed, the offices of the Chairman and the agencys operating units make up the Commission. The Commission has 3 offices along with HQ located in Washington, D.C. – Chicago, Kansas City, New York.

Futures Trade are located in these cities. So if you have a problem with them, you can make your way over there and bust out your uzis and spray them. Just kidding. Don‘t do that – they’re the good guys. Theyre here to help you. Think of what happened if there was no agency out there to protect you. There would be a lot more scammers, and brokers would cheat their users in a heartbeat. The CFTC provides orders in a market that would otherwise be chaotic.

The duty of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodities and financial futures and options. In the “unregulated” forex market, this regulatory body will help you determine if a forex company is reliable or trustworthy.

The CFTCs Website can be found here:

https://www.cftc.gov/index.htm

If you need to file a complaint or report suspicious activities:

https://www.cftc.gov/consumerprotection/redressreparations/index.html

National Futures Association (NFA)

NFA created in 1982 is the sole authority responsible for regulating the derivatives markets and products such as ETFs, OTCs, and currencies.

According to the latest ruling from the US, only NFA Forex brokers are allowed to carry out their services in the US and all non-regulated companies are banned from entertaining US citizens. NFA collects dues in order to sustain itself without having to rely on taxpayers dollars.

If the CFTC is Big Brother, then we like to call the NFA as Little Big Brother . NFAs activities are overseen by the Commodity Futures Trading Commission (CFTC), the governmental body responsible for regulating the U.S. futures industry.

The NFAs mission is to:

• Ensure futures industry integrity

• Protect market participants

• Enforce NFA members to meet their regulatory responsibilities

Almost every firm or separate who conducts futures or options on futures business with the public must be registered with the CFTC and a Member of NFA. NFA performs the registration process on behalf of the CFTC. NFA Member categories include Commodity Trading Advisors (CTA), Commodity Pool Operators (CPO), Futures Commission Merchants (FCM), and Introducing Brokers (IB).

To perform all kind of business in the futures market, you would have to be a member of the NFA. To be a member of the NFA, an agency would have to pass a screening done by the NFA and comply with NFA standards and regulations. These rules and regulations provide market integrity and a level playing field for all, and not just for investors.

As time passes, they have been making notable progress. In order to resolve future-related issues, the NFA began an arbitration method in 1983. In 1991, a resolution program was developed as a faster way to resolve disputes. In late 2001, the NFA started to accept claims online. Members could also start registering online in 2002.

In 2004, the NFA started to submit digital images of fingerprint cards to the FBI enabling faster background checks and shorter registration times. What an active organization! This goes to show that they keep up with the times. Who knows, they might just make their own iPad app. Huh!. Along with the CFTC, the NFA provides investors and individuals with security and protection from fraud and scams.

The NFAs website can be found at https://www.nfa.futures.org/index.asp.

How can I learn more about the forex broker with whom I am trading？

Wait! before we go on. I hope you understand how to choose a good and regulated Broker using your experience and awareness! . Alright In the U.S., only regulated entities, such as banks, insurance companies, broker-dealers or futures commission merchants, and affiliates of regulated entities may enter into off-exchange forex trades with retail customers.

You can verify CFTC registration and NFA membership status of a particular firm or individual and check their disciplinary history by calling NFA at 800-621-3570 or by checking the broker/firm information section (BASIC) of NFAs website.

BASIC is a free tool that you can use to research the background of forex brokers doing business in the United States.

But for residents outside the U.S., ensure to ask the forex broker how it is regulated and check with its regulator about the specific brokers registration status and background.

What should I do if I have a problem with my forex account？

Disputes are likely to occur from time to time in any industry. Your first step should be to contact the firm you have a disagreement with and try to reach a settlement. Both the CFTC and NFA offer programs that may be available for resolving financial disputes involving your forex account.

Either NFA or the CFTC can accept your trading case depends on several factors, however, including the party your claim is against.

How to File a Claim if You Believe Youve Lost Money Due to Unfair or Improper Treatment by an NFA Member

NFA offers an arbitration program to assist customers and NFA Members resolve disputes. Information about NFAs arbitration program is available by calling NFA at 800-621-3570 or visiting the Dispute Resolution section of its Web site at www.nfa.futures.org.

How to File a Claim if You Have a Dispute That Cant Be Resolved with a CFTC Registered Firm

The CFTC provides a reparation program for resolving disputes. If you want information about filing a CFTC reparations complaint, contact the CFTC‘s Office of Proceedings at 202-418-5250 or visit the CFTC’s website.

How to File a Complaint or Report Suspicious Business Practices

Alternatively, when you feel any improper business relation in your forex account, you may contact or file a complaint with NFA by telephone at 800-621-3570 or online at www.nfa.futures.org/basicnet/Complaint.aspx to call their attention

You may file a complaint with the CFTC. The CFTC has arranged a questionnaire form to assist the public in reporting suspicious moves or transactions.

The questionnaire form is available on the CFTCs Web site at https://www.cftc.gov/enf/enfform.html