Main Regulatory Bodies for Brokers Around the World

Over the past few years, the Forex market has experienced an exponential increase in Forex brokers available to Forex traders. This was only possible because of a new regulatory regime that lifted some restrictions on how investors could manage their money. The legal framework has changed, companies across EU had the possibility to advertise and offer CFD trading for their clients.

Regulation is an important part in the Forex trading business because it assures a fair trading environment. You should only seek to work with Forex Brokers that falls under the arm of the big regulatory bodies. We have chosen the best Forex Brokers available to Malaysian traders which are regulated by the biggest regulatory bodies around the world.

The Foreign Exchange market was one known as the Wild West of trading, but today’s regulators around the globe are taking an increasingly active role in the FX market.

US – CFTC and NFA Regulatory Body

In the USA the main regulatory Bodies is the CFTC or the Commodity Futures Trading Commission and the NFA or the National Futures Association. The CFTC is establishing the regulatory guideline to protect the interest of the retail FX investors.

Since most trading is done outside of an exchange on the over the counter market the retail trader is relying on the creditworthiness of its Forex Broker so it’s important to assure your retail Forex Broker is properly regulated. There are capital rules that have been imposed so that all brokers should be adequately capitalized. The US FX regulatory body is the only major regulatory agency to impose limits on the maximum leverage to traders which is set to 50:1 for major currencies and to 20:1 for exotic currencies.

UK and Europe – FSA Regulatory Body

In the UK and mainly in the EU zone the FSA or the Financial Services Authority acts as the major regulatory body. However, we can also mention Cyprus as being one of the preferred jurisdiction for many European Forex Brokers. The CySEC is the financial regulatory agency of Cyprus which has a good reputation of a trustworthy agency.

The scope of the FSA activities and really all the other regulatory bodies is as follows:

  • Due diligence, only qualified Forex brokers get the license to operate in the markets.
  • Impose minimum capital requirements for Forex Brokers.
  • Protection against fraud.
  • Capital protection which in the EU zone is set to $100,000.

Australia – ASIC Regulatory Body

Australia has its own regulatory body called ASIC or the Australian Securities and Investments Commission.

Malaysia – Forex Regulatory Body

Malaysia is emerging as a new possible offshore destination for many Forex retail brokers in Asia. The Security Commission of Malaysia is in charge of overseeing the Forex brokers in Malaysia. The Security Commission also assures a fair market environment and at the same time to protect the retail Forex traders from any wrongdoings.

China – CSRC Regulatory Body

The China Securities Regulatory Commission (CSRC) is the main Forex regulatory body in China. The CSRC was only created in 1992 and it doesn’t have a long history like its counterparts in the USA or UK. But, China’s growing presence on the global stage the CSRC will become more important in assuring investors that in provides a safe and transparent market environment.


The main benefit of having regulatory bodies is that they help to standardize how clients are treated and making sure that markets are fair and your money is safe. In general, regulation varies across countries were in the most developed country we have long-standing regulation authorities, but there are lots of other countries that don’t have proper regulation. If you don’t have a regulated Forex broker then you have to accept there’s a risk your money won’t be safe.