What is a licensed forex broker
A licensed forex broker is a brokerage firm that is licensed and regulated by a supervisory body and has been granted a forex license. This supervisory body ensures that all work carried out by the brokerage firm complies with all legal and anti-money laundering regulations in an ethical manner.
If you are interested in becoming a licensed forex broker and would like more information, view our Forex License page where it displays how to setup a brokerage firm and how to obtain a forex license.
Licensed forex broker explained
A licensed forex broker is a financial institution that has acquired all the necessary documentation required in order to enable it to conduct business legally and with integrity. Following the application process, this includes essential services such as bank accounts and insurance for forex brokers, as well as tax advice and legal support.
The licensing of a forex broker ensures that the foreign exchange company is regulated and audited, both externally and internally on a yearly and twice yearly basis, respectively. An external audit takes place once per year and is completely independent of the company. It entails thorough internal checks to ensure all work conducted by the licensed forex broker firm complies with the financial authorities requirements of that country. An internal audit involves more guidance and support for the company, in order to help the licensed broker excel in a reliable and ethical manner.
Being a licensed forex broker is considered as an absolute necessity in today’s vicious and competitive market. If an individual or company is looking to trade with a broker they are highly likely to select a company that is fully licensed and regulated.