French Forex Traders can Feel Protected When Choosing Banque de France Forex Brokers
For Forex traders in France, things are a little different when it comes to the regulation of the Forex industry. Many other countries have a regulatory body that is independent but in France, the supervision of the financial markets is undertaken by a Government owned agency. The Banque de France is ultimately responsible for French financial markets. It has direct links with the European Central Bank and is known for being one of the world’s most powerful central banks. It has been around since the beginning of the 1800s and has a place in history for resolving France’s financial crisis of 1848. An important role it has today, aside from its many other functions, is to implement European System of Central Banks (ESCB) interest rate policy.
How does the Banque de France regulate Forex brokers?
As the Banque de France is the central bank of France it obviously has a lot on its plate. So, you’re probably wondering how it is able to oversee the operations of various financial markets, as well as regulating Forex brokers. There are a number of subsidiary organizations, as well as other banking supervisory agencies. Any company planning to offer a type of financial service is required by law to be registered and regulated, either directly or indirectly, by one of these regulatory departments. The various departments are responsible for overseeing a wide variety of financial organizations, including Forex brokers, banks, insurance companies and other firms that are offering services related to financial markets.
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The organization with ultimate responsibility for regulating Forex brokers is the ACPR (Autorité de Contrôle Prudentiel), along with the AMF (Autorité des Marchés Financiers). The AMF is also responsible for overseeing the regulation of the stock market in France and safeguarding investors interests along with companies listed on the country’s stock exchange.
You’ll find there aren’t many Forex brokers regulated by the Banque de France
Unfortunately, any Forex traders residing in France will find it a little restrictive to pick a Banque de France regulated broker because there really aren’t that many. This is all down to the fact that Forex brokers licensed in other EU countries such as the UK, Germany, or France are covered under MiFID to provide financial services right across Europe, and that includes France. If a forex broker has its headquarters anywhere in the EU and is recognized by an EU regulatory agency it doesn’t need to register with the Banque de France as well.
In France, financial laws are much tighter than many other European countries and there are a lot of time-consuming formalities. Which are obviously going to put companies off setting up offices in France. It is much easier for them to set up in other EU countries where the rules and regulations are far less onerous. Cyprus is the perfect example, as not only are the rules and regulations imposed by CySEC less strict there are tax benefits too.
Is the Banque de France considered to be a reliable regulator?
There are many different regulators in the Forex industry, and it can be very difficult to decide whether one is better than another, particularly in Europe. All countries that are members of the European Union have very similar legal frameworks. This is, after all, what being European is all about. MiFID (Markets in Financial Instruments Directive) make this even more apparent, as it is a European Union law that is designed to ensure harmonized regulation for investment services across all European member states.
But does that mean a Forex broker regulated by the Banque de France is less or more reliable than one regulated somewhere else? Let’s see if we can answer that question honestly. There are a number of other countries, such as the UK, Germany, and Cyprus, that have regulatory bodies which are at the forefront of the Forex industry’s regulation. As such, the whole of the EU relies on their effectiveness. But, and however, this doesn’t mean that a Banque de France Forex broker is any less reliable or effective than one that is, say, for example, FCA licensed and regulated. Which means that Banque de France regulated brokers are committed to providing the best quality financial services for its customers.
What does the Banque de France do to protect Forex traders?
There are very strict protocols, put in place by the Banque de France, which are designed to ensure consumer protection. The Banque of France is responsible for a wide range of financial decisions and doesn’t get involved in individual complaints. It does, however, provide a structure, that relates to a company’s operations, all regulated brokers are required to implement and follow. Should a Forex trader have an issue with a particular regulated Forex broker there is a complaints procedure that has been adopted by most EU countries.
The two responsible departments that fall under the control of the Banque de France, namely the AMF and the ACPR, are obliged to follow certain MiFID guidelines which are similar to those set by other regulatory agencies, such as the FCA and CySEC. The first port of call, with regards any complaint, is to approach the broker concerned. Should a suitable response not be forthcoming then it is down to the Financial Ombudsman, or as a last resort the Court. This is a set procedure that traders have to follow.
Is it easy to find Banque de France regulated brokers?
We’ve already mentioned there are very few Banque de France regulated brokers, so that is obviously going to make finding the best one much easier. But the best place to start searching is the website of the Central Bank. ACPR and AMF also have their own databases that can be used to perform a search for Banque de France Forex brokers. It is also possible to verify any licensing claims a broker may make, by comparing it with the official license information on the bank’s official website.
We would advise every trader to thoroughly investigate any broker before making a choice. There are, unfortunately, a number of Forex brokers that advertise with false information. This tricks consumers into depositing money with them, and then the individual investor finds out there is no protection for their hard earned cash.