Residents of New Zealand Should be Looking to FMA Forex Brokers for a Safe Trading Experience
Finding a reliable and respectable Forex broker to work with is an important part of trading. One way to check a broker’s reliability is finding out whether they have a license and are regulated by a recognized body. There are a number of these located in various countries, such as BaFIN in Germany, and ASIC in Australia. For any Forex traders picking a broker in New Zealand, the authority to look for is the FMA (Financial Markets Authority) New Zealand. It might prove to be a challenge, as New Zealand’s market regulation is a little on the loose side. But finding FMA regulated brokers is a step in the right direction.
A brief introduction to the FMA
FMA stands for Financial Market Authority and in New Zealand, it is the organization in charge of regulating the country’s financial markets. The role originally fell on the shoulders of the Securities Commission of New Zealand. Unfortunately, the Commission suffered a barrage of criticism between 2006 and 2010 and struggled to enforce a sufficient level of regulation to protect consumers.
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The FMA was formed in 2011, to try and put a stop to it all and bring a suitable level of order to the financial markets. Regulating Forex brokers was just one of its roles. A new bill that was passed gave the FMA powers that included issuing and revoking licenses for all financial companies, regulating their business conduct, and supervising their work.
A further Act was passed in 2013 that expanded the FMA’s domain. Today, it has more tools and options to help in providing a safer environment for New Zealand’s investors and anyone else involved in the financial markets.
What kind of regulation is imposed by the FMA?
Following its formation in 2011, the FMA was provided with the much-needed tools to help it repair New Zealand’s reputation in respect of financial dealings. Previous years had seen a number of scandals and mishaps that severely damaged its reputation and left a number of people very much out of pocket.
Introducing FMA Forex brokers was considered to be an important part of the improvements. Because previously the weakly regulated market had allowed a number of people and organizations to get away with almost anything. Once the FMA had been introduced companies offering financial services were forced to adhere to certain international regulations and follow a code of conduct.
An FMA Forex broker has to undergo constant scrutiny by the FMA. Because this is one sure fire way to ensure businesses operate in a fair and responsible manner, with emphasis on the customer. The FMA hasn’t overcome all its problems and still has issues keeping track of all its responsibilities. But choosing an FMA Forex broker is still a very sensible option for New Zealand investors.
Are there any advantages to choosing an FMA regulated broker?
In 2011, when the FMA was formed, a number of businesses that were already registered lost their licenses. The FMA were issuing licenses to new companies, but some of the old firms got caught up, even though some of them were conducting legitimate business. Of course, this made a number of firms unhappy, but thankfully the FMA was able to establish a process whereby old businesses could apply for a license. Provided they were complying with the new rules and regulations they were granted a license.
The FMA ensures all Forex brokers that are regulated are held accountable for their conduct. Any failure is frowned upon and the breaker of the rules could receive a hefty fine. It is also possible, in an extreme case, for an FMA Forex broker to lose their license. This is a big improvement for Forex traders, as previously infractions were mostly ignored, and firms were able to operate how ever they wanted.
Consumers are able to contact the Authority directly, should one of its members behave in a way that is contrary to the regulations. There are various channels of communication and once a complaint is received the FMA will do everything in its power to investigate allegations and hold the culprits accountable for their actions.
Looking to the future for traders and FMA regulated brokers
The FMA is currently involved in developing a number of anti-money laundering policies. This is one of its roles, specified in the Money Laundering and Countering of Terrorism Act 2009. Regulated financial providers are compelled to comply with the policies. The FMA works tirelessly towards it goal which is to protect the overall interests of the nation. All regulated members have to agree to regular audits conducted to ensure all financial transactions are carried out according to the FMA’s rules.
FMA also holds the education of consumers very dear and provides a good range of online resources so that consumers can better educate themselves in respect of the financial markets. And the FMA also hands out some pretty sound advice for the general public with regards investments. Investors are advised to be diligent and base decisions on careful research when dealing with Forex brokers and other financial entities.
In conclusion, we have to say that choosing an FMA regulated Forex broker is a wise choice for anyone living in New Zealand. The FMA has consumers interests at heart and does its utmost to ensure that all companies in the financial industry follow the rules and procedures.
The FMA is working with a number of other bodies to create a stable and safe business environment in New Zealand. Anyone choosing to use a regulated provider for a particular financial service should be able to sleep at night, knowing the FMA has their back. Forex trading can be a very risky form of investment, and staying safe is of vital importance. Picking the best possible Forex broker as a partner is a vital part of the experience. Get it wrong and you could find yourself crying all the way to the bank. Get it right and you’ll be well on the way to great Forex trading success.