Forex Trading in Turkey and CMBT Forex Brokers
Things are looking up for Forex brokers in Turkey and for the increasing number of clients who are enjoying this exciting way to invest. Not so long ago, Forex trading in Turkey was a little chaotic, with far more unregulated brokers offering their services than CBMT-regulated brokers. Thankfully, things have changed in recent years and Turkey is taking regulation far more seriously. Anyone looking to venture into this form of investment needs to be looking for CMBT Forex brokers.
What is CMBT?
The CMBT is not one of the more recognised authorities, but it is nevertheless paving the way for better protection for Turkish Forex traders. CMBT stands for the Capital Market Board of Turkey, and is the regulatory authority that has been tasked with overseeing the financial markets in Turkey. It manages and monitors all financial markets operators, supervises stock market participants, and protects consumers and their rights.
The CMBT has been around for a number of years and was actually created in 1982, following the passing of the Capital Markets Law in 1981. In the beginning its role was limited, but additional laws and decrees were ,and these helped to increase its functions. The most important of these laws for anyone considering Forex trading is Law No. 4487, passed in 1999. This particular law expanded the scope of the CMBT as well as its duties, and allowed for more flexibility, the use of information technology, stock dematerialisation, and increased protection for investors.
CMBT-regulated brokers now have a role in the Forex trading industry.
Before the passing of Law No. 4487, there were a large number of unregulated brokers offering their services. However, as from 2011, it was not allowed for non-licensed brokers to offer their services in Turkey and handle the trades of retail investors. The introduction of this restriction has helped to reduce the uncertainty traders had been faced with. Obviously, the unregulated brokers didn’t take the news very well because it meant they would be forced to comply with new rules. Forex traders in Turkey, on the other hand, were very pleased with the improvements and were able to participate in market trading without the previous uncertainties. Before 2011, there were frequent stories of brokers going bust and clients’ money simply disappearing. This is no longer a possibility, as one of the new requirements calls for CMBT Forex brokers to hold client funds in segregated accounts.
Turkish Forex traders now have a wider choice of CMBT-regulated brokers.
For many years Turkish traders were left with very little choice, other than to choose an unregulated broker but the number of CMBT regulated Forex brokers in Turkey is steadily increasing. There is now a much more formal market framework, and traders are therefore given much greater protection. Gone are the days of unlicensed brokers taking money and offering very little in return, and this can only be viewed as an improvement. Traders are quickly able to confirm whether a broker is licensed by visiting the CMBT website.
The general improvements in the country’s financial regulation are causing a number of larger brokerage firms to consider setting up operations in the country, although the economic and political situation in the country is leading them to be very cautious. Certainly, before the change in regulations, there was very little interest from overseas firms. Things are now looking up for Forex brokers in Turkey who wish to be licensed and regulated, and this is a positive step for Forex traders.
The CMBT and investor protection
The CMBT has a number of aims, but its overall mission is to provide a fair, transparent, safe, and efficient environment for those who want to trade in capital markets. It wants to protect the rights and interests of investors, thereby providing consumer with a secure choice and helping the country’s development. There are a number of ways in which it plans to achieve its goals:
- Better regulation – The CMBT is responsible for establishing regulations and making the necessary changes to ensure there is a flexible regulatory structure which is able to adapt to new circumstances
- Improved management – The monitoring of all market participants is undertaken by the Capital Markets Board of Turkey, including stock and derivative exchanges, custody and clearing systems, publicly held corporations, and related firms.
- Supervision and monitoring – In order to reduce the chance of non-compliance the CMBT supervises and monitors all financial markets participants by way of audits and ratings, requesting financial reports and statements, requesting statutory filings and preventing abuse of the markets.
- Issuing guidelines – The CMBT issues guidelines which are of an international standard.
- Registration and approval – The CMBT registers and approves all capital markets instruments and publicly held companies.
- Increased support – This is to help financial services providers employ the best-possible practices.
- Authorisation – All CMBT regulated firms are required to meet certain standards.
- Imposing standards – These standards include those relating to all professionals who work in the market, and require them to sit licensing examinations in order to determine whether they are appropriately qualified, capable and experienced.
- Enforcement – This takes place by collecting evidence through inquiries, examinations and a number of other methods, with anyone found to be breaking the rules brought before the Public Prosecutor.
How the CMBT operates
There are twelve different departments that make up the CMBT, of which the Department of Intermediary Activities is the most relevant for anyone looking for Forex brokers in Turkey. This particular department reviews and examines applications made by intermediary institutions, which includes Forex brokers, and ensures compliance with the rules and regulations. Forex brokers are not the only sector the Department is interested in, however. Stock markets and any other markets where instruments are traded also fall under its jurisdiction. All regulated entities are able to take advantage of the Board’s advice, but must operate in accordance with the set of regulations relating to settlement, custody, and materialisation,and also belong to an approved compensation scheme.
The future is undoubtedly much brighter for traders who live in Turkey. The market is no longer unregulated, giving investors much greater peace of mind because there is now increased protection. If you find yourself considering a broker that claims to be regulated by the CMBT we would advise you to perform due diligence and check the claims on the CMBT website. The information available is not as extensive as it is from a number of other well-known regulators, but you will be able to confirm whether a broker is licensed.