The regulations are the responsibility of diverse organizations who set the proper guidlines for participating in the currency exchange market. Sadly, as the internet (where trades are largely conducted) is basically a “wild west” environment, we will always have traders and brokers who bend the rules to suit their own purposes. Keep the following in mind as you conduct your trades and seek a broker to service your account. This is one reason you must do your due diligence when selecting a broker and ideally, use a broker for which you have a personal reference.

The United States Congress authorized the creation of the Commodity Futures Trading Commission (CFTC). The CFTC came to be in 1974. As an autonomous agency, it publishes foreign exchange trading regulations for trades occuring within the United States. The main purpose of these regulations is to ensure that accurate information is available to traders and additionally to protect traders from fraudulent trading practices. Most countries have a similar official organization. These organizations make decisions about forex trading practices. It is in your best interest to check that your prospective broker is duly and properly licensed.

Please be aware of the forex regulations applicable in your country when choosing your forex broker and when conducting trades. Remember that these regulations exist essentially to protect you and to keep the some sense of order in the trading community. You don’t want to become the next headline in the financial news or become the focus of a government investigation. It is therefore helpful to occasionally revisit the changing regulatory landcape and make sure you stay current with what is required of you and your broker.

Using an experienced broker is advisable, if for no other reason than just to be clear that you will not inadvertently break some arcane rule. Just as corporations often consult with their attorneys when venturing into unknown or potentially questionable legal territory, you can similarly use your broker as a “sounding board” if you have questions about lthe egality of specific trades. Check with your broker to see if they generally entertain questions of this nature.

The forex regulatory environment is not onerous, particularly when compared with other, more mature financial markets. Just be aware that these rules are meant to keep the “forex playground” safe for everyone and this will make complying with the rules an easier pill to swallow.