Forex Trading in Gibraltar and GFSC Forex Brokers
Gibraltar may be small in size, but its location at the southern tip of the Iberian Peninsula at the gateway to the Mediterranean Sea has meant it has played a significant part in world history. Today, it is a British Overseas Territory, but was originally part of Spain. In the War of Spanish Succession of 1704, it was captured by an Anglo-Dutch forces, but was later ceded to Britain “in perpetuity” under the Treaty of Utrecht in 1713. During World War II it was a vital Royal Navy base, as it provided the Navy with important control over the entrance to the Mediterranean Sea. Its modern-day role is one that is mainly based on tourism, shipping, online gambling, and financial services, which means those of you looking for Forex brokers in Gibraltar may find yourselves spoilt for choice.
Financial services in Gibraltar are regulated by the GFSC.
GFSC stands for the Gibraltar Financial Services Commission, and it is this body that regulates the country’s financial services industry. Gibraltar joined the European Union in 1973, along with the United Kingdom, and is classed as a Special Member State Territory, under the provisions of the Treaty of Rome. There are a number of benefits that make this a popular location for many types of business, such as exemption from the Common External Tariff and the Common Agricultural Policy, and the fact that there is no requirement for the levying of Value Added Tax.
Another advantage for GFSC-regulated brokers is the passporting rights offered by MiFID. The GFSC determines whether certain criteria are met, and provided the Commission is notified, GFSC Forex brokers are able to offer their services in other European Economic Area member states, with no need to apply for separate licences from other EEA countries.
What does the Gibraltar Financial Services Commission do for the industry?
The GFSC has a number of different aims in relation to the financial services industry, including the following:
- Enabling customers to access a range of different financial services to meet their needs, all of which are provided by competent and trustworthy firms
- Providing regulation of the financial services industry in an efficient and effective manner
- Promoting sound business practices
- Protecting consumers from financial loss
- Enhancing the country’s reputation as a high-quality financial centre.
Anyone looking for Forex brokers in Gibraltar is able to check the validity of a broker’s licence by visiting the Commission’s website. The Commission issues letters of authorisation and licences which give details of the services the firm is permitted to provide. It is also possible to request a copy of such a letter or licence from the provider for your own peace of mind.
GFSC-regulated brokers are also required to state the details of their licence on advertisements, stationery, letterheads, business cards, and on their websites. It is also possible to check directly with the GFSC if you are unable to find the relevant information by other means.
GFSC Forex brokers will have a set procedure for dealing with complaints.
Having a set complaints procedure is a requirement for most regulated brokers around the world, including Forex brokers in Gibraltar regulated by the GFSC. It is also one of the basic requirements of MiFID.
The first step will generally be to contact the firm against which you have the complaint and try and resolve the matter with them directly. The complaint must be made in writing, as this will ensure there is a permanent record of the problem, and may be required in the future if you need to take further steps. The procedures in place must provide consumers with a way for their complaints to be handled appropriately and efficiently.
It is possible that you may find yourself unable to reach a resolution, or that you consider there is a case for financial compensation to be paid, in which case you will need to take the matter to the courts in Gibraltar.
The GFSC itself is not able to help with your complaint directly, although it is possible for you to report the complaint. The Commission has no legal standing, and is unable to resolve disputes between GFSC-regulated firms and consumers. It is also unable to provide arbitration in commercial disputes or to give advice.
While this may be very frustrating for you as a consumer, it’s important to point out the importance of sharing complaints. Raising a complaint with the GFSC gives the Commission an opportunity to investigate if it is thought the GFSC-regulated broker is breaching requirements, and this will help to protect future investors.
There is also some reassurance to be gained from GFSC plans to create a Financial Services Ombudsman office in the very near future. This means that in the future there will be recourse if your complaint is not resolved to your satisfaction. It is likely the service will be free, and will provide consumers with an effective and alternative way to settle disputes, bringing Gibraltar into line with a number of other recognised regulatory agencies.
Tips for choosing the best GFSC-regulated investment firm
The best investment firms will be more than happy to answer your questions with regard to their service. If you contact one and find that it is unwilling to discuss its service, consider this good reason to look for another provider. You will find yourself with a number of GFSC-regulated Forex brokers to choose from, so let’s give you some tips to help you pick the best one:
- Clarify the charges you will have to pay, because these can vary significantly. Brokers generally publish a schedule of charges on their website, but you always have the option of contacting them and getting Customer Support to explain the charges.
- Check whether the firm uses segregated accounts.
- Pick a selection of firms and make comparisons.
- Ask the firm what will happen to your investment if they cease trading.
- Read and fully understand all the terms and conditions before you register and open an account. This is one particular aspect that is often overlooked, but has the potential to cost you a lot of money.