Is my broker / money safe - basic due diligence

Is my broker / money safe - basic due diligence.
All these checks also apply to managed funds or any other type of investment.

Steps:
1. Regulation
2. Contact address.
3. Website domain check.
4. Useful links
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Step1 - Regulation

To check for USA registration with SEC:
FINRA BrokerCheck Search
To check for USA registration with NFA:
NFA broker check
To check for UK registration with FCA:
FCA Register
To check for Australian registration with ASIC:
ASIC broker check

In general that will cover most well known brokers.
The above regulation bodies are also the hardest for a broker
to get registered with.

If the broker you are thinking of using does not show up
as registered with any of the above, I personally would not
use them. If they pass the above checks, proceed with other checks.
In the vast majority of cases though, the above check should be enough.
No registration - think twice about using them...

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Step 2. Contact address.

Find the brokers contact address - contact us link usually.
Google that address without the brokers name included.
Look for anything in the results that mentions:
Virtual office.
Other company names at the same address.

A virtual office means they are not physically there.
Multiple company names at the same address can often point to
a virtual office as well, especially if the building is small...

Google streetview check, paste address into search bar:
https://maps.google.co.uk/maps?hl=en
Does the building look like the kind of place a reputable broker
would use as office space?
Do the same with a well known reputable broker to see what I mean.

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Step 3. Website domain check.

Copy paste the brokers website address into search for domain field:
Domain Name Lookup, Domain Whois | DomainTools

A domain registration that is hidden or private is not standard practice.
A different address than the brokers contact address is also not typical.
Although in some instances, with a broker that is registered with
a regulator listed in step 1, a different domain registration address
may not be that big a deal.

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Step 4. Useful links

SEC - Researching and Managing Investments | Investor.gov
CFTC - Consumer Protection
CFTC - Fraud Awareness & Prevention
FCA Register
FCA - How to claim compensation
FCA - how to complain
ASIC investment FAQ
ASIC - how to complain

Specific Warnings
CFTC Advisory on Foreign Currency
FMA: Warning against unauthorised websites offering binary options trading

Thanks for sharing this useful information

Mightypen said:

o yeah, seriously? Please can I beg to differ?Unregulated brokers are not truly FX vampires waiting to suck their clients dry. I think broker confidentiality is a mile off his regulatory status. I'm even beginning to enjoy their flexible leverages and I think regulatory bodies should not throw restrictive ropes about the juicy leverages they offer.The truth is leverages are booming FX technologies, helping traders do much with so little- thus enhancing an industrial FX. Impinging on leverages by regulatory bodies could make the market so crude. Such that your security deposit reflects directly how large the deposit of respect your orders are given. But FX is not supposed to be so unscientific with client progress riding at SNAIL speed in a JET age because of these unnecessary regulatory constraints. What do you think?:smart:

Click to expand...

Thats not you is it David?
Give up you spamming halfwit
Good job bumping this thread too btw

Mightypen said:

But my dear Mr. liquid, do you see regulated brokers to be more righteous in the FX? There is no true difference between an UNregulated market and its regulated counterpart. The difference is only the UN in their names which has remained impractical. There is truly nothing to choose between a regulated and an unregulated. The former is neither that religious nor a moralist in the FX. Clients should not heave relief when trading with regulated brokers, there no comfort zones in the FX, it is all a jungle.

Click to expand...

When your regulated broker goes bust you will be compensated. When your unregulated broker goes bust you'll get nothing.

Which is better? And note, its when not if.

Thanks much Liq Val/
But you will still see someone depositing their cash in unregulated brokerage firms.

pboyles said:

When your regulated broker goes bust you will be compensated.

Click to expand...

This is not applicable to NFA regulated brokers , it depends on the regulatory body , i would go with UK FCA brokers because of the FSCS compensation scheme ...

Giovan said:

Thanks much Liq Val/
But you will still see someone depositing their cash in unregulated brokerage firms.

Click to expand...

True, not much anyone can do about that.
If this saves just a few people from getting burnt
its a step in the right direction

tar said:

This is not applicable to NFA regulated brokers , it depends on the regulatory body , i would go with UK FCA brokers because of the FSCS compensation scheme ...

Click to expand...

I totally agree with you mate. I dealt with CySEC and FCA in past. FCA is much more reliable and they have good service too. They did the best for me. I am going with only FCA regulated firms where I know I can get back up.

yellowfloyd said:

I totally agree with you mate. I dealt with CySEC and FCA in past. FCA is much more reliable and they have good service too. They did the best for me. I am going with only FCA regulated firms where I know I can get back up.

Click to expand...

Agree, CySEC have been a joke for a long time:
CySEC Tells Investors to Prove They Were Cheated - Cyprus Mail (Cyprus) | HighBeam Research

Hi thank you for the information

It makes interesting and thought provoking reading

I always do what I consider due diligence but your comments about checking out Who else the address is linked to and a street view google search is a useful tip for dealing with any company not just Brokers.

The information about domains is also extremely helpful . Whilst there are a lot of genuine companies out there the web can also contain an element of unscrupulous people out to get your money. So it's really good to have this advice

Even if the broker is unregulated he can be trustworthy!

Do not forget that all brokers reside somewhere, and as a client you always have the right to send your email or complains to the regulator of where he is residing - this will cause him similar problems to a regulated one.

The financial bodies make sure that all brokers are fair, they just need to know about it.

Magos said:

Even if the broker is unregulated he can be trustworthy!

Do not forget that all brokers reside somewhere, and as a client you always have the right to send your email or complains to the regulator of where he is residing - this will cause him similar problems to a regulated one.

The financial bodies make sure that all brokers are fair, they just need to know about it.

Click to expand...

The question you need to ask is why would a trustworthy broker not be regulated...
Also, a recent trend particularly among binary brokers is to completely hide
the physical address of the business using virtual offices (glorified P.O. boxes)
and hiding the address the website domain is registered to.
That is the main reason I started this thread, as me and several others
were answering the same questions over and over again.

A bit puzzling why you think a regulation body has any jurisdiction over
unregulated brokers, they don't.
If you write to them as you suggest, they will tell you as much and recommend
that you use a regulated broker.

For the most part, a broker not going down the regulated route is doing so
purely to to avoid the responsibilities that come with regulation and the cost
associated with regulation.
Which at the very least suggests they are not well funded if regulation costs are an issue...
Even the issue of binaries not having to be regulated is a cop out.
If they wanted to give clients peace of mind, they could register with the FCA
in the UK and offer binaries inside a spread bet wrapper.
They don't, simply as most of them are dodgy fly by night, underfunded outfits.

I would have thought you would know all this seeing as you've been registered since
2007, then again your sig - "Stops are 4 buses" is quite revealing...

good thread LV.............you might at least get someone to take some trouble before they hand over their cash

N

NVP said:

good thread LV.............you might at least get someone to take some trouble before they hand over their cash

N

Click to expand...

Well if nothing else, might save me and PB continually regurgitating the same info..

Liquid validity: nice reply here but not sure that you understand regulation in full!

Even if the broker is not regulated it does not imply he is cheating or he is illegal?

Offshore brokers do have responsibilities to the financial authority body where they reside or the bank that issued them license to hold clients funds. If they are not allowed to hold clients funds then they are illegal by default! (lot of these broker schemes exist).

Do you think that registering a broker dealer to hold client funds is an easy process? do you know anything about Anti-Money Laundering and Counter-Terrorism Financing Act, KYC, World Check, Segregation, etc.?

Is being a while since I wrote something on Trade2Win, but I have always been a good friend with Management.

Stops are for buses is catchy, I am glad you like it.

Magos said:

Liquid validity: nice reply here but not sure that you understand regulation in full!

Even if the broker is not regulated it does not imply he is cheating or he is illegal?

Offshore brokers do have responsibilities to the financial authority body where they reside or the bank that issued them license to hold clients funds. If they are not allowed to hold clients funds then they are illegal by default! (lot of these broker schemes exist).

Do you think that registering a broker dealer to hold client funds is an easy process? do you know anything about Anti-Money Laundering and Counter-Terrorism Financing Act, KYC, World Check, Segregation, etc.?

Is being a while since I wrote something on Trade2Win, but I have always been a good friend with Management.

Stops are for buses is catchy, I am glad you like it.

Click to expand...

Thats why they register in places like the BVI - as none of that
applies or is so lax it may as well not exist.

No one is saying a UK or USA registered broker can be unregulated.
Thats the whole point, they advertise a UK address (virtual office P.O box).
Somewhere in the fine print, the company is registered in the BVI or similar,
hence outside of the jurisdiction of the regulation bodies.

Do you know anything about the current state of affairs regarding
the surge in binary options brokers, and the way they operate?
I know plenty about regulation, and the loop holes that allow firms to escape regulation...

BVI has regulation
http://en.wikipedia.org/wiki/British_Virgin_Islands_Financial_Services_Commission
http://www.bvifsc.vg/

Not the most strict but they do! they also issue sanctions:
http://www.bvifsc.vg/en-us/searchresults.aspx?Search=forex

1 Royal Forex Trading Ltd. - Advisory Warning No. 8 of 2010 (December 10, 2010) - Relevance: 1007
Advisory Warning No. 8 of 2010 10 December, 2010 ADVISORY WARNING ROYAL FOREX TRADING LTD Tortola, ...
http://www.bvifsc.vg/News/tabid/160/ArticleType/ArticleView/ArticleID/91/language/en-US/Default.aspx - 1/21/2012 11:59:02 PM
2 Golden Forex - Advisory Warning No. 7 of 2009 - Advisory Warning No. 7 of 2009 (22 May 2009) - Relevance: 1005
ADVISORY WARNING The British Virgin Islands Financial Services Commission (FSC) is issuing this adv...
http://www.bvifsc.vg/News/tabid/160/ArticleType/ArticleView/ArticleID/65/language/en-US/Default.aspx - 1/21/2012 11:59:02 PM
3 Foreign Exchange Currency Trading Frauds. - Advisory Warning No. 9 of 2009 - Advisory Warning No. 9 of 2009 (16 June 2009) - Relevance: 1004
ADVISORY WARNING FOREIGN EXCHANGE CURRENCY TRADING FRAUDS The British Virgin Islands Financial Serv...
http://www.bvifsc.vg/News/tabid/160/ArticleType/ArticleView/ArticleID/67/language/en-US/Default.aspx - 1/21/2012 11:59:02 PM
4 USAFX Online - Advisory Warning No. 7 of 2010 (10 December 2010) - USAFX Online - Advisory Warning No. 7 of 2010 - Relevance: 1001
Advisory Warning No. 7 of 2010 10 December, 2010 ADVISORY WARNING USAFX ONLINE Tortola, British Vir...
http://www.bvifsc.vg/News/tabid/160/ArticleType/ArticleView/ArticleID/90/language/en-US/Default.aspx - 1/21/2012 11:59:02 PM

So on the BVI example you are wrong, you are just referring to illegal brokers! which they are many.

Coming to the Binary Options and to your question "Do you know anything about the current state of affairs regarding the surge in binary options brokers, and the way they operate?" Yes I do.

There is a fine line between Gambling and Trading and you should know that.

If you have any questions on regulation regarding offshore, licensed or any other compliance issues I would be gladly at your service.

Thanks

You clearly don't know what you are talking about...
All your examples are forex.

Binary options brokers require no regulation under any financial services body globally.
Its still classed as gambling, that is how they circumvent financial services regulation.
Which is why there is a global surge in binary brokers:
http://www.fma.gv.at/de/verbraucher...websites-offering-binary-options-trading.html

This thread was primarily sparked by the number of questions popping up
about binary brokers, example:
http://www.trade2win.com/boards/fix...4-binary-options-con-scam-18.html#post2026340
If you give a sh1t, read that thread to see what I mean, there are plenty of other examples as well.

Come on please read what I wrote above! spend sometime and if you do not understand it please contact me.

http://forexmagnates.com/gaming-or-...gulate-binary-options-as-a-financial-product/

The above is just an example.

Anyway instead of learning or reading what I am writing, you are looking for arguments with your attitude and your inexperience!

Magos said:

Come on please read what I wrote above! spend sometime and if you do not understand it please contact me.

http://forexmagnates.com/gaming-or-...gulate-binary-options-as-a-financial-product/

The above is just an example.

Anyway instead of learning or reading what I am writing, you are looking for arguments with your attitude and your inexperience!

Click to expand...

FFS you are talking about FOREX.
Binary options are not covered...
Why don't you try reading...

As for looking for an argument, I pointed out the inaccuracies in your first post.
You started it with the patronising bullsh1t:

Magos said:

Liquid validity: nice reply here but not sure that you understand regulation in full!

Even if the broker is not regulated it does not imply he is cheating or he is illegal?

Offshore brokers do have responsibilities to the financial authority body where they reside or the bank that issued them license to hold clients funds. If they are not allowed to hold clients funds then they are illegal by default! (lot of these broker schemes exist).

Do you think that registering a broker dealer to hold client funds is an easy process? do you know anything about Anti-Money Laundering and Counter-Terrorism Financing Act, KYC, World Check, Segregation, etc.?

Is being a while since I wrote something on Trade2Win, but I have always been a good friend with Management.

Stops are for buses is catchy, I am glad you like it.

Click to expand...

Don't like it in return, tough.