Is my broker / money safe - basic due diligence

L

Liquid validity

0 0
Is my broker / money safe - basic due diligence.
All these checks also apply to managed funds or any other type of investment.

Steps:
1. Regulation
2. Contact address.
3. Website domain check.
4. Useful links
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Step1 - Regulation

To check for USA registration with SEC:
FINRA BrokerCheck Search
To check for USA registration with NFA:
NFA broker check
To check for UK registration with FCA:
FCA Register
To check for Australian registration with ASIC:
ASIC broker check

In general that will cover most well known brokers.
The above regulation bodies are also the hardest for a broker
to get registered with.

If the broker you are thinking of using does not show up
as registered with any of the above, I personally would not
use them. If they pass the above checks, proceed with other checks.
In the vast majority of cases though, the above check should be enough.
No registration - think twice about using them...

-------------------------------------------------------------------------------------
Step 2. Contact address.

Find the brokers contact address - contact us link usually.
Google that address without the brokers name included.
Look for anything in the results that mentions:
Virtual office.
Other company names at the same address.


A virtual office means they are not physically there.
Multiple company names at the same address can often point to
a virtual office as well, especially if the building is small...

Google streetview check, paste address into search bar:
https://maps.google.co.uk/maps?hl=en
Does the building look like the kind of place a reputable broker
would use as office space?
Do the same with a well known reputable broker to see what I mean.

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Step 3. Website domain check.

Copy paste the brokers website address into search for domain field:
Domain Name Lookup, Domain Whois | DomainTools

A domain registration that is hidden or private is not standard practice.
A different address than the brokers contact address is also not typical.

Although in some instances, with a broker that is registered with
a regulator listed in step 1, a different domain registration address
may not be that big a deal.

-------------------------------------------------------------------------------------
Step 4. Useful links

SEC - Researching and Managing Investments | Investor.gov
CFTC - Consumer Protection
CFTC - Fraud Awareness & Prevention
FCA Register
FCA - How to claim compensation
FCA - how to complain
ASIC investment FAQ
ASIC - how to complain

Specific Warnings
CFTC Advisory on Foreign Currency
FMA: Warning against unauthorised websites offering binary options trading
 
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Reactions: DitterPD
L

Liquid validity

0 0
o yeah, seriously? Please can I beg to differ?Unregulated brokers are not truly FX vampires waiting to suck their clients dry. I think broker confidentiality is a mile off his regulatory status. I'm even beginning to enjoy their flexible leverages and I think regulatory bodies should not throw restrictive ropes about the juicy leverages they offer.The truth is leverages are booming FX technologies, helping traders do much with so little- thus enhancing an industrial FX. Impinging on leverages by regulatory bodies could make the market so crude. Such that your security deposit reflects directly how large the deposit of respect your orders are given. But FX is not supposed to be so unscientific with client progress riding at SNAIL speed in a JET age because of these unnecessary regulatory constraints. What do you think?:cry::smart:

Thats not you is it David?
Give up you spamming halfwit :LOL:
Good job bumping this thread too btw :)
 

pboyles

Legendary member
8,072 1,302
But my dear Mr. liquid, do you see regulated brokers to be more righteous in the FX? There is no true difference between an UNregulated market and its regulated counterpart. The difference is only the UN in their names which has remained impractical. There is truly nothing to choose between a regulated and an unregulated. The former is neither that religious nor a moralist in the FX. Clients should not heave relief when trading with regulated brokers, there no comfort zones in the FX, it is all a jungle. (y)

When your regulated broker goes bust you will be compensated. When your unregulated broker goes bust you'll get nothing.

Which is better? And note, its when not if.
 

Giovan

Active member
163 7
Thanks much Liq Val/
But you will still see someone depositing their cash in unregulated brokerage firms.
 
L

Liquid validity

0 0
Thanks much Liq Val/
But you will still see someone depositing their cash in unregulated brokerage firms.

True, not much anyone can do about that.
If this saves just a few people from getting burnt
its a step in the right direction :)
 

yellowfloyd

Active member
109 2
This is not applicable to NFA regulated brokers , it depends on the regulatory body , i would go with UK FCA brokers because of the FSCS compensation scheme ...

I totally agree with you mate. I dealt with CySEC and FCA in past. FCA is much more reliable and they have good service too. They did the best for me. I am going with only FCA regulated firms where I know I can get back up.
 

CherryP

Newbie
4 0
Hi thank you for the information

It makes interesting and thought provoking reading

I always do what I consider due diligence but your comments about checking out Who else the address is linked to and a street view google search is a useful tip for dealing with any company not just Brokers.

The information about domains is also extremely helpful . Whilst there are a lot of genuine companies out there the web can also contain an element of unscrupulous people out to get your money. So it's really good to have this advice
 

Magos

Established member
911 24
Even if the broker is unregulated he can be trustworthy!

Do not forget that all brokers reside somewhere, and as a client you always have the right to send your email or complains to the regulator of where he is residing - this will cause him similar problems to a regulated one.

The financial bodies make sure that all brokers are fair, they just need to know about it.
 
L

Liquid validity

0 0
Even if the broker is unregulated he can be trustworthy!

Do not forget that all brokers reside somewhere, and as a client you always have the right to send your email or complains to the regulator of where he is residing - this will cause him similar problems to a regulated one.

The financial bodies make sure that all brokers are fair, they just need to know about it.

The question you need to ask is why would a trustworthy broker not be regulated...
Also, a recent trend particularly among binary brokers is to completely hide
the physical address of the business using virtual offices (glorified P.O. boxes)
and hiding the address the website domain is registered to.
That is the main reason I started this thread, as me and several others
were answering the same questions over and over again.

A bit puzzling why you think a regulation body has any jurisdiction over
unregulated brokers, they don't.
If you write to them as you suggest, they will tell you as much and recommend
that you use a regulated broker.

For the most part, a broker not going down the regulated route is doing so
purely to to avoid the responsibilities that come with regulation and the cost
associated with regulation.
Which at the very least suggests they are not well funded if regulation costs are an issue...
Even the issue of binaries not having to be regulated is a cop out.
If they wanted to give clients peace of mind, they could register with the FCA
in the UK and offer binaries inside a spread bet wrapper.
They don't, simply as most of them are dodgy fly by night, underfunded outfits.

I would have thought you would know all this seeing as you've been registered since
2007, then again your sig - "Stops are 4 buses" is quite revealing...
 

NVP

Legendary member
37,620 2,032
good thread LV.............you might at least get someone to take some trouble before they hand over their cash

N
 
L

Liquid validity

0 0
good thread LV.............you might at least get someone to take some trouble before they hand over their cash

N

Well if nothing else, might save me and PB continually regurgitating the same info..:LOL:
 

Magos

Established member
911 24
Liquid validity: nice reply here but not sure that you understand regulation in full!

Even if the broker is not regulated it does not imply he is cheating or he is illegal?

Offshore brokers do have responsibilities to the financial authority body where they reside or the bank that issued them license to hold clients funds. If they are not allowed to hold clients funds then they are illegal by default! (lot of these broker schemes exist).

Do you think that registering a broker dealer to hold client funds is an easy process? do you know anything about Anti-Money Laundering and Counter-Terrorism Financing Act, KYC, World Check, Segregation, etc.?

Is being a while since I wrote something on Trade2Win, but I have always been a good friend with Management.

Stops are for buses is catchy, I am glad you like it.
 
 
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