No
one I have ever met likes losing or being taken advantage of.
Whilst
we know that financial trading includes a risk of loss; the mere thought that
you could lose part or your entire portfolio as a result of financial
irregularity or criminal behaviour is not something anyone would ever feel
happy experiencing.
There
are steps you as an independent trader can undertake, to reduce the risk of
encountering any direct loss to your trading portfolio.
One
of the ways you can achieve this is by selecting a financial broker, who is
regulated.
Broadly
speaking, regulation defines a set of behaviours and rules which the broker
must abide by in its day-to-day business processes and procedures.
Once
the broker proves they meet the specified rules, they are usually allocated a
membership number from the regulatory body.
You will also find that brokers usually display details of their
regulation status on their website.
Once
you acquire details of the broker's regulatory membership you can obtain the
detailed requirements of the regulation and subsequently verify with the broker
how they satisfy these rules.
Some
of the criteria regulators have as part of the sign up process include;
The
way client monies are handled*
Conduct
of the business*
Disclosure
of Information*
Honesty
and reliability*
*
This list is not exhaustive
Finally,
there are different regulators in countries all over the world, and their rules
and requirements will vary so it is important that you satisfy yourself that
the regulator rules will be easily enforceable, by you, if and should the need
arise.
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