Forex Brokers List By Country
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The geographical location of forex brokers is one area where there is a huge disparity. Most of the forex brokers in the world today are located in the US, Europe (UK and Cyprus specifically), Asia (Japan, Singapore, Australia) and the Middle East. There is hardly any brokerage presence in Africa. This has led to a situation where those who trade forex in countries where there is no physical brokerage presence are at the mercy of the offshore brokers and the regulations issued by the agencies that regulate and supervise these brokerages.
1) US
After the September 11, 2001 terrorist attacks in the US, the government revised the rules under which US companies could do business with foreign entities. This led to a situation where almost all US forex brokers began shutting down accounts of many traders from countries that were on the blacklist of the US Office of Foreign Assets and Control (OFAC). Till date, traders from countries on the OFAC blacklist are still unable to open accounts with US forex brokers.
Another topical issue that concerns trading with US forex brokers is the issue of the US tax law known as the Foreign Assets Tax Compliance Act (FATCA). Under the provisions of FATCA, US citizens are expected to declare any income made worldwide, including any profits from the proceeds of forex trading with foreign brokers. FATCA also provides for sanctions on foreign companies that fail to provide information to the IRS on US traders who have trading accounts with them. In order to avoid any problems with the IRS, many brokers located in Europe and Asia have simply closed their doors to US traders. As it stands today, traders in the US can only trade forex effectively with US forex brokers. US traders will not miss much by trading only with homegrown brokers. The regulatory environment in the US forex market is strong; arguably the best organized as well. The technology base that serves brokers and traders in the US is very strong as well. New York is recognized as a major forex trading hub. The data centres and the virtual private servers that serve the US trading hub are well constructed and properly co-located. The forex market in the US is very robust; unfortunately, it is only open to US citizens and citizens of a few other countries.
2) Europe
The major forex trading hubs in Europe are located in London and Cyprus. Some major hubs are gradually emerging in Central and Eastern Europe (Malta, Bulgaria, Russia and Romania). Cyprus emerged as a major trading hub due to its investment friendly policies that attracted a large number of forex brokerages. In addition, no restrictions are placed by these brokers on the traders they can accept (except banning US citizens from their platforms in order to avoid compulsory reporting to the US IRS). Many traders from far-flung regions of the world presently trade with brokers in Cyprus and the UK. The regulatory environment in the UK is very strong. While there have been some criticisms about the Cyprus Securities and Exchange Commission (CySEC) being a bit too lax with enforcement, CySEC has indeed made some strategic changes to strengthen regulation in Cyprus.
3) Asia
Forex trading in Japan, Singapore and Australia is hitting levels not seen in many years. Recently, the Bank of International Settlements declared Singapore to be the number 3 forex trading hub in the world, after London and New York. Taiwan now ranks as one of the countries with the largest forex reserves, thanks to the massive foreign investment flows into that country. China has seen a massive boom in the forex brokerage business, and introducing brokers for forex companies are easily netting trading volumes of 90,000 lots per month. Asian regulators have pushed towards enhancing the forex markets in their countries to adapt better to the local environments within their jurisdictions. Presently, regulators in Japan and Australia have begun a cooperative effort to ensure that forex brokers in each country restrict their marketing efforts to their local markets to promote better regulation and compliance with local practices.
Many forex brokerages have gone the pathway of opening different offices in different regulatory jurisdictions in order to better comply with local regulations and have better access to markets in these regions.
Forex Brokerage Payment Systems
An integral part of forex trading in countries of the world is the development of acceptable systems of payment. Credit cards, digital wallets and lately, digital currencies have been developed over the last two decades as means of payment in forex so as to improve the speed and ease of forex-related transactions. These payment methods are designed to make it more convenient for forex traders to deposit and withdraw funds from their brokerage accounts. However, not all forex traders from around the world have been able to access and utilize these payment systems maximally. In many countries, usage of credit/debit cards as well as digital wallets is impossible due to financial blacklisting. For these traders, the bank transfer method remains the only method of transaction. This method is slow, cumbersome, involves a lot of paperwork and in today’s fast-paced trading, gradually becoming obsolete.
This presents an equality gap which has still not been adequately addressed. There have been attempts to create country-specific e-wallets to address these issues, but these are not widespread and are still limited in scope.
There have to be improvements in this regard. Some forex brokers such as AvaTrade are attempting to solve these issues by citing local branches of their forex business in countries where there is a potential huge market but a dearth of effective payment systems. The thinking is that if traders in these countries can use local payment methods, then the payment transaction gap can be bridged. This is an expensive model and has not taken traction among the generality of brokers. It is expected that as more financial technology companies come into the forex marketplace, solutions to these problems will be devised and deployed accordingly.
1) US
After the September 11, 2001 terrorist attacks in the US, the government revised the rules under which US companies could do business with foreign entities. This led to a situation where almost all US forex brokers began shutting down accounts of many traders from countries that were on the blacklist of the US Office of Foreign Assets and Control (OFAC). Till date, traders from countries on the OFAC blacklist are still unable to open accounts with US forex brokers.
Another topical issue that concerns trading with US forex brokers is the issue of the US tax law known as the Foreign Assets Tax Compliance Act (FATCA). Under the provisions of FATCA, US citizens are expected to declare any income made worldwide, including any profits from the proceeds of forex trading with foreign brokers. FATCA also provides for sanctions on foreign companies that fail to provide information to the IRS on US traders who have trading accounts with them. In order to avoid any problems with the IRS, many brokers located in Europe and Asia have simply closed their doors to US traders. As it stands today, traders in the US can only trade forex effectively with US forex brokers. US traders will not miss much by trading only with homegrown brokers. The regulatory environment in the US forex market is strong; arguably the best organized as well. The technology base that serves brokers and traders in the US is very strong as well. New York is recognized as a major forex trading hub. The data centres and the virtual private servers that serve the US trading hub are well constructed and properly co-located. The forex market in the US is very robust; unfortunately, it is only open to US citizens and citizens of a few other countries.
2) Europe
The major forex trading hubs in Europe are located in London and Cyprus. Some major hubs are gradually emerging in Central and Eastern Europe (Malta, Bulgaria, Russia and Romania). Cyprus emerged as a major trading hub due to its investment friendly policies that attracted a large number of forex brokerages. In addition, no restrictions are placed by these brokers on the traders they can accept (except banning US citizens from their platforms in order to avoid compulsory reporting to the US IRS). Many traders from far-flung regions of the world presently trade with brokers in Cyprus and the UK. The regulatory environment in the UK is very strong. While there have been some criticisms about the Cyprus Securities and Exchange Commission (CySEC) being a bit too lax with enforcement, CySEC has indeed made some strategic changes to strengthen regulation in Cyprus.
3) Asia
Forex trading in Japan, Singapore and Australia is hitting levels not seen in many years. Recently, the Bank of International Settlements declared Singapore to be the number 3 forex trading hub in the world, after London and New York. Taiwan now ranks as one of the countries with the largest forex reserves, thanks to the massive foreign investment flows into that country. China has seen a massive boom in the forex brokerage business, and introducing brokers for forex companies are easily netting trading volumes of 90,000 lots per month. Asian regulators have pushed towards enhancing the forex markets in their countries to adapt better to the local environments within their jurisdictions. Presently, regulators in Japan and Australia have begun a cooperative effort to ensure that forex brokers in each country restrict their marketing efforts to their local markets to promote better regulation and compliance with local practices.
Many forex brokerages have gone the pathway of opening different offices in different regulatory jurisdictions in order to better comply with local regulations and have better access to markets in these regions.
Forex Brokerage Payment Systems
An integral part of forex trading in countries of the world is the development of acceptable systems of payment. Credit cards, digital wallets and lately, digital currencies have been developed over the last two decades as means of payment in forex so as to improve the speed and ease of forex-related transactions. These payment methods are designed to make it more convenient for forex traders to deposit and withdraw funds from their brokerage accounts. However, not all forex traders from around the world have been able to access and utilize these payment systems maximally. In many countries, usage of credit/debit cards as well as digital wallets is impossible due to financial blacklisting. For these traders, the bank transfer method remains the only method of transaction. This method is slow, cumbersome, involves a lot of paperwork and in today’s fast-paced trading, gradually becoming obsolete.
This presents an equality gap which has still not been adequately addressed. There have been attempts to create country-specific e-wallets to address these issues, but these are not widespread and are still limited in scope.
There have to be improvements in this regard. Some forex brokers such as AvaTrade are attempting to solve these issues by citing local branches of their forex business in countries where there is a potential huge market but a dearth of effective payment systems. The thinking is that if traders in these countries can use local payment methods, then the payment transaction gap can be bridged. This is an expensive model and has not taken traction among the generality of brokers. It is expected that as more financial technology companies come into the forex marketplace, solutions to these problems will be devised and deployed accordingly.