Forex Trading in Denmark and Danish FSA Forex Brokers
You may think that Forex trading is a new thing – but, in fact, it has been around for years. Admittedly, it hasn’t always been possible for ordinary people like you to participate, as it used to be the reserve of large institutions and banks. However, the introduction of online trading has made it possible for everyone to take part. And if you happen to be looking for Forex brokers in Denmark we will be able to help you. There are a number of things you will have to do before deciding on which currency pairs to trade in, and the first and foremost decision is which Forex broker to use.
On a global scale, the Forex market is largely unregulated. Overseeing the Forex market is done on a more local scale, with individual countries being responsible for services offered in their own country. The world of Forex trading for the ordinary consumer is still in its early stages for many countries, which means that regulations will also vary across the world. Some regulators are much better known than others, but for those of you looking for regulated brokers in Denmark you need to understand about the Danish FSA.
The Danish Financial Supervisory Authority and its regulation of the financial markets
The Danish FSA is the regulatory arm of the Danish government with responsibility for regulating the Danish financial markets. In Danish it is known as the Finanstilsynet, and it is part of the Ministry of Economic and Business Affairs. It also acts as secretariat for the Danish Securities Council, the Financial Business Council, and the Money and Pension Panel.
The Danish FSA was first created in 1988 following the merger of the Insurance Supervisory Authority and the Supervisory Authority for Banks and Savings Banks. It had more responsibilities added to its remit when it took over from the Supervisory Authority for Mortgage Credit Institutions in 1990.
The Danish Financial Supervisory Authority has a number of different functions, aside from the regulation of Danish Forex brokers. All financial service providers are in fact regulated by the FSA, but its other functions include the collection of financial statistics from stock exchanges, banks, clearing and registration organisations, money market brokers, insurance companies and brokers, securities brokers, and investment associations.
As the country’s regulator the DFSA is involved with the following:
- Encouraging management to take risk profiles into consideration
- Strengthening the role of the market in its disciplinary aspect by making the markets more transparent
- Improving opportunities for consumers to compare products and prices being provided by different service providers.
All regulated Forex brokers in Denmark can be found in the regulator’s list.
All regulated Forex brokers in Denmark will make some kind of mention of their regulatory status on their website. However, you should also be aware that scam brokers often use false or misleading information in order to add credibility to their service. For this reason, it is wise to undertake your own research and check the validity of any claims you read. It’s not too difficult because it is possible to find relevant information for all Danish FSA Forex brokers, including the following:
- Danish regulated broker’s company name
- Address at which the business is registered
- Country of origin
- Registration number
- Date the Danish FSA regulated broker received its licence
- Type of business it is authorised for
- Relevant permits.
Does the Danish FSA cooperate with other regulatory agencies?
While there may not be one single regulatory authority for the whole of the Forex industry, there are a number of organisations that view this investment sector on a more international scale. The Danish FSA works closely with some of these international organisations; for example, the Committee of European Securities Regulators (CESR) and the International Organisation of Securities Commissions (IOSCO).
You may or may not have heard of these organisations, but if you have, do you understand what they do?
The Committee of European Securities Regulators (CESR)
This independent committee was established in 2001 by the European Commission. It is no longer in existence as it was replaced in 2011 by the European System of Financial Supervision (ESFR). The ESFR is a framework for European Union financial supervision, and all national supervisory authorities of EU member states are members. Other vital members include European supervisory authorities, the European Systemic Risk Board, and the Joint Committee of the European Supervisory Authorities.
The International Organisation of Securities Commissions (IOSCO)
This is a group of organisations with responsibility for regulating securities and futures markets across the globe. It has members from more than 100 different countries, and these members are responsible for regulating more than 95% of the world’s securities markets. It was created with the aim of helping members promote high regulatory standards, as well as acting as a forum in which members will be able to cooperate with each other and with other international organisations.
The benefits of choosing Danish FSA-regulated brokers
When you’re considering Forex trading for your next investment you should first consider finding a regulated broker, wherever you may live in the world. If you’re a resident of Denmark you should be looking for Forex brokers in Denmark regulated by the Danish FSA. Most brokers are more than happy to comply with the regulatory body in their own country, and may even choose to be regulated by more than one body. So what are the advantages of choosing a regulated broker?
- A regulated broker will have to comply with recognised industry standard regulations, providing you with increased security, safety, and reliability.
- A regulated broker will generally be one that is not in the habit of using unethical practices.
- Client funds tend to be kept in segregated accounts, and the broker should have sufficient funds to ensure that contracts can be executed and completed.
- Regulated brokers are encouraged to follow the regulations, because it is likely they will have to submit to regular audits, reviews, and evaluations.
Should you choose a regulated broker or one with no regulation? That’s entirely up to you, but don’t forget the increased protection provided by the regulations, and the lower risk of falling victim to a scam.