Trading with Regulated Broker

Trading with Regulated Brokers

People are talking about online trading more than ever, whether it is investing in cryptocurrencies, forex, stocks, or commodities. The online trading market is expected to continue growing at its current rate of 5.1% a year, and with more brokers and trading opportunities available, the trend doesn’t show signs of slowing down. 

The popularity of online trading is a mixed blessing. On the one hand there are more brokers and trading services to choose from. On the other, there are many fraudulent schemes and unregulated brokers that are targeting novice traders with the intent of taking advantage of them. Mis-sold investments are a growing problem and it can be hard to distinguish between a real broker and one peddling fake services. 

One way to stay safe trading is to open an account with a regulated broker. However, with so many clone brokers falsely passing themselves off as licensed, it takes some research and attention to detail to validate a broker’s stated qualifications. Too often, investors have lost money before they realise they have been dealing with a fraudulent trading scheme. 

If you need assistance after losing money to a crypto scam, a forex scheme or want to bolster your case in a broker dispute, contact us. MyChargeback UK professionals are well-versed with such issues. We consult with clients and assist them in gathering evidence and presenting a claim. We have extensive experience working with chargeback claims and are familiar with how regulators and banks deal with these cases. Our expertise can improve your chances of success. 

The Importance of Trading with Regulated Brokers

The first thing to look for when deciding which broker to trade with is a licence. Although many issues ad disputes can arise even with regulated brokers, most forex fraud and crypto complaints occur with unregulated brokers and trading schemes advertised on social media. Therefore, checking for a licence will weed out many potential problems before they start. 

However, examining whether or not a broker is licensed requires more than just looking at website texts or trusting what is written on a Facebook page. It is important to immediate validate such claims by visiting the regulator’s site, performing a search and verifying that the broker is listed as registered on the site. 

How to Make Sure You Are Trading with a Licensed Broker

For instance, every broker with UK clients must be registered by the FCA, the Financial Conduct Authority. Many brokers state on their websites that they have a licence from the FCA, but these claims may be false. Before opening an account, go to the FCA website and do a search on the broker to confirm their claims. If they are not found on the site, do not trade with them.

Be on the lookout for clone brokers. The FCA often warns the public about firms that adopt names that are very similar to FCA-regulated brokers. Their aim is to deceive clients into thinking they are signing up with the regulated broker when, in fact, they are giving their money to an illegal trading scheme. Double-check names precisely and pay attention to minor details. 

Another trick brokers may use is to claim that their licence is current when in fact they have lost it or it has been suspended. A search on the FCA website, however, should uncover any information about the broker that you need to know. 

It is important to insist on proper regulation and not to be satisfied with just any licensed broker. There are different degrees of licences and the FCA, as well as major foreign regulators such as ASIC in Australia and the SEC in the USA, are top-tier licences. Licences from small, offshore, underpopulated island countries that are relatively simple to obtain do not provides the same level of regulation and oversight and do little to keep traders safe. 

Basically, all these brokers need to do to get a third-tier licence is to submit some flimsy application and pay a fee and they will get a licence. However, the regulators that issue them rarely, if ever, check up on their licensees or handle customer complaints adequately. 

How to Handle Disputes with Regulated Brokers

Once you have signed up with a regulated broker, you can feel some sense of security that there is a regulator that will handle complaints should they arise. However, there is no guarantee that your money is absolutely safe. In addition to the losses you may incur from high-risk investments, broker disputes may still arise. Occasionally, even registered brokers may engage in mis-sold investments or Ponzi schemes and may even disappear. 

With regulated brokers, however, broker disputes are more common than cases of outright fraud. You may have a disagreement over terms and conditions, the broker may not withdraw funds promptly or there may be some inconsistency with spreads and commissions. With broker disputes, both the customer and the broker can make their case to the regulator. 

Once in a while, a registered broker may be involved in an illegal scheme and disappear. This is more common among unregulated brokers, but it can happen even if the broker has a licence. In this case, law enforcement may have to be involved to track down the broker and help to recover the missing funds. 

The process, at first glance, may seem easier with a broker dispute than with a broker that ahs suddenly disappeared. However, disputes can often be drawn out, which provides a certain advantage to brokers, since they have more knowledge of the process, more connections or significant legal assistance. It is, therefore, quite useful for investors to have someone on their side to bolster their cases as well.

How Fund Recovery Services Can Help

Broker disputes can be lengthy and complex. Investors are likely to be unprepared for the process and may not have the experience with banks and regulators and the understanding of what types of evidence and arguments tend to result in a successful resolution. This is where professional assistance can help.

MyChargeBack UK is staffed by experts who understand regulators and banks and can negotiate your position in broker disputes from a position of strength. We have the resources, knowledge and tools to improve the odds of getting your money back.

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