Know Your Broker: Regulations and Account Verification

12 October, 2020

We get it. The fact that you’re not meeting the intermediary face-to-face can be scary, but not when you know how to properly research before choosing the broker you want to entrust with your trading activity, and hence your finances. 

This is exactly why we thoroughly explain how to identify scammer brokers and choose the one that is regulated!

The first thing that you want to do when choosing a broker, is identifying one that is regulated within the area where you’re living. If you’re doubting the regulators’ intentions, just consider that banks follow the rules imposed by the same financial regulators, as brokers do. Now isn’t it easier trusting the regulator, knowing this?

Since we know that a knowledgeable trader, is a happy trader, we’re enlisting below all the EEA members and their respective regulatory entity:

  • Austria - FMA Belgium - Financial Services and Markets Authority Bulgaria - FSC Croatia - HANFA
  • Republic of Cyprus - CySEC Czech Republic - CNB Denmark - FSA Denmark Estonia - Finantsinspektsioon
  • Finland – FIN-FSA France – ACPR Germany – BaFIN Greece – HCMC
  • Hungary – MNB Iceland – FSA Iceland Ireland – CBIA Italy – CONSOB
  • Latvia – FKTK Liechtenstein – FMA Lithuania – LB Luxembourg – CSSF
  • Malta – MFSA Netherlands – AFM Norway – FSA Norway Poland – KNF
  • Portugal – CMVM Romania – ASF Slovakia – NBS Slovenia – ATVP
  • Spain – CNMV ​​Sweden – FI United Kingdom – FCA Switzerland – Swiss FINMA

You should know that the US also has its own regulators like the rest of the countries, but usually, services are restricted within countries that share the same levels of restrictions and regulations when it comes to the financial sector.

This is the case for EEA member countries that can provide their services to citizens of the other member countries, and to Switzerland as well. However, although Switzerland is part of the single market and governed by similar financial legislation as the EEA countries, we still require further Legal Opinion before accepting its citizens as clients.

In fact, except for a few jurisdictions, with eXcentral you can enjoy trading pretty much from any  country around the world. This is possible since we are regulated both, within the EEA by the Cyprus Securities and Exchange Committee (CySEC, with CIF License No .226/14), and in South Africa by the Financial Sector Conduct Authority (FSCA, with FSP License No. 48296).

How to Find your Broker’s Regulations?

Knowing the regulators of each country makes your job of identifying which broker is serious or not a lot easier. In fact, finding out whether or not the broker is regulated is actually the simplest part.

The first thing you want to do is visit their website, and scroll to the bottom where you’ll find the fine printing with the regulator’s name, and the license number. To simplify your work even further, we regulated brokers, also make sure to let you know which are the services we can or can’t provide. 

From here to knowing for sure whether the brand or broker is, in fact, telling the truth, you just have to verify on the regulator’s website. That is how you’ll know whether the company can actually be found with its license number in the regulatory body’s register for offering the specific services you’re interested in receiving. 

Don’t throw caution to the wind

In order to comply with regulations and apply the law, all serious and regulated financial companies will have to follow-up with you, making sure you fully registered by answering a series of questions. These questions are there to verify who you are, that you can afford to invest, and that you understand the markets you’re interested in investing in. 

In addition to this, you will also be requested to upload a series of documents, confirming the above – as it’s the case when you’re applying to open a savings or investment account with any bank. 

In case you happen to register with a broker that on first sight appears to be honest, but the questionnaire and document verification aren’t required, you should consider taking a step back and thoroughly verifying the company. All regulated financial institutions will only allow you to open an account, only after the verification process is completed. 

And that’s exactly what we’re doing here, at eXcentral! Make sure to check back again in the upcoming weeks, as we’ll cover these topics in our upcoming articles. 

Extra Caution

Keep in mind that you can even contact the financial regulator to ask about the company you’re interested in investing with. For any other information regarding the steps you need to take in order to start trading with eXcentral, our Service Desk, Account Managers and even Michalis Efthymiou, our eXceptional Market Analyst, are available for a call. 

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.42% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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