Forex trading was once the reserve of large corporations and major banks, but with the advent of online trading and online Forex brokers it is now possible for ordinary people to enjoy this form of investment. Online trading has now made it possible for participants to be located in any country. Even though the world of Forex trading has been opened wide, though, it is still important to bear in mind the regulations and rules of the country where you live. There is no global regulatory agency responsible for supervising the Forex industry, leaving rules and regulations to be imposed on a more local level.
If you are looking for Forex brokers in Spain you should be considering CNMV-regulated brokers.
The CNMV and financial regulation in Spain
In Spain, the Comisión Nacional del Mercado de Valores (CNMV), or the National Securities Market Commission, is the government agency that has responsibility for the regulation of the Spanish securities market. It is actually an independent agency, but falls under the Ministry of Economy and Finance of Spain. As such the Ministry is able to oversee the Commission’s work, and is able to make changes if it deems it necessary.
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The Commission is one of the oldest financial regulators in the world, as it was created in 1988. The need for such an agency came about following a major reform of the Spanish financial sector. There were also plans to make changes and realign the responsibilities of the CNMV by giving some of its responsibilities to the Bank of Spain, but the laws have yet to be passed, and the CNMV still retains its powers.
The ultimate aim of the CNMV is to maintain stability and transparency of the Spanish financial markets, along with protecting investors and encouraging all participants to act in a fair and transparent way. As well as acting as a watchdog for Spain’s financial services industry it also participates actively in the work of international organisations such as the International Organization of Securities Commissions (IOSCO), and the Committee of European Securities Regulators (CESR).
Forex trading in Spain and the role of the CNMV
The CNMV has a number of different roles, not all of them relating to Forex brokers; but those of you reading this are going to be concerned with its roles in relation to your form of investment. The following responsibilities apply:
- The issuance of CNMV licences
- The imposition of penalties on any providers found to be in breach of regulations
- The overseeing of CNMV Forex brokers and their activities
- Communication with traders, responding to inquiries, and resolving disputes
How to make a complaint about a CNMV Forex broker
We hope you won’t find yourself in such a situation, but should the need arise for you to make a complaint the CNMV will be able to handle your grievance or complaint, providing the broker is CNMV regulated. Of course, you will have to try and reach an amicable resolution with the provider yourself in the first instance; but if you are unable to reach a mutually agreeable conclusion the matter can be raised with the Financial Ombudsman. If you are still unable to reach an agreement you will be able to contact the CNMV, who will listen to your complaint.
It’s important to check the validity of any broker claiming to have a licence
Finding a CNMV-regulated broker won’t be too difficult, and regulation is a feature that should appear at the top of your list of priorities. If you are a resident of Spain then picking a broker that is licensed by the Spanish regulator will offer you the best protection. You will find that regulatory information forms part of most broker’s websites, and licensing information is generally at the very bottom of the home page.
There is a word of warning, however. It seems to have become common practice for scam brokers to include regulatory information when they are in fact not regulated at all. The information provided is often misleading, confusing or simply untrue, which is why it is advisable for you to check any claims with the relevant regulatory body. Those of you looking for CNMV Forex brokers can quickly check the validity of a broker’s licence by visiting the CNMV website.
If you can’t find any reference to regulation or licensing on a broker’s website, feel free to contact the broker’s customer service department. They should be more than willing to discuss their regulatory standing. And if they don’t want to give you any details, take this as a sign and look for a recognised CNMV Forex broker.
The CNMV has the protection of consumers at the heart of its operations
The regulation of the financial services industry is very important for the CNMV, and there are a number of articles that back up such a claim. One of these articles highlights the warning list issued by the Commission giving consumers a list of operators that are offering services without holding a relevant licence. This type of provider offers very little protection for client funds, as they operate outside of legal boundaries, with no control from regulatory agencies.
One of the most important criteria for those of you wanting to trade Forex in Spain is regulation. Choosing a CNMV-regulated broker ensures they have sufficient capital available to cover any trading losses, because your funds will be held in a segregated account. You can also be confident the trading environment is fair, because your trades will be executed at the prevailing market price.
Regulatory standards do vary immensely from country to country, but as Spain is a member of the EU you can be confident of a basic standard of regulation. This is because regulatory bodies operating in the EU are required to comply with MiFID. This European Directive is designed to harmonise regulation for investment services across all member states, with the objective of increasing competition and consumer protection.
