✔️ Information reviewed and updated in April 2024 by Pedro Martínez González
If you are currently investing in the financial markets you will surely want your money to be safe, and that is why you should invest with a regulated broker. It is not advisable to work with companies that are not regulated and less when we talk about investing money.
In this article we will explain which are the best regulated brokers. For example, if we take into account that currently we do not see brokers as we never visit their offices. If something goes wrong, the possibility of claiming our investment in person is practically nil, and if the broker, for example, has its headquarters in other continents, things get complicated and if it is in a tax haven (and there are problems to withdraw your money) you can forget to see your money back.
If the broker is not serious and does not return the money, there is not much we can do, other than claim online. And if the broker is a scam, the claim will be useless. For this reason, before investing, you must make sure that your broker has a serious regulation behind it that monitors and supervises that their actions are professional and correct. Especially that the broker's clients have some protection.
With this I am not saying that a regulated broker cannot commit fraud, but the probabilities are greatly reduced as the broker does not want to put his license at risk with what it costs to obtain and maintain it. A broker that is not regulated is more than likely to be used for hacks, robberies and scams of all kinds that we cannot do anything about.
Many of the unregulated brokers are in the forex, cryptocurrency and CFD markets and undertake their scams taking advantage of the ignorance of unsuspecting investors. If what you want is to look for a regulated and safe broker, then keep reading, we will help you find a good, safe and reliable broker, a recommended broker.
The importance of choosing a regulated broker
Well, the list that I am going to explain has some nuances: regulated brokers don't have to be the safest. You have to understand that there are different types of regulation.
This is due to the great dynamics of the brokerage market worldwide and obviously to the personal preferences of each user. Take as an example a Spanish investor who wants to invest in financial products. In your case, the safest brokers you could choose are those that are regulated in Spain.
Those that are regulated in Spain are under the supervision of the Spanish financial regulator, which is the CNMV (National Securities Market Commission). In this case we are talking about a fully trusted regulator and if there is a regulated broker in it, we could suggest that this broker is one of the safest to be able to negotiate in Spain.
So the best regulated brokers for Spain are those that have their regulation in the CNMV. Many brokers are only licensed by this body but it is also true that most of these brokers can only provide services to Spanish clients.
That is why we say that a broker that is in Spain and only regulated by the CNMV may be "better regulated" (in theory) than one that is regulated by the FCA (England), the ASIC (Australia) and the CySEC (Cyprus), at least for the Spanish client since the CNMV will intervene in the event of any type of complaint or complaint by a Spanish client.
Taking into account the aforementioned, we are not only going to talk about regulated brokers in Spain, England or the United States, but all over the world. We will name those who are, in our opinion, the best regulators.
Regulated Brokers: different financial markets
An FCA regulated broker can be Forex or Stocks and even Futures. As we have already discussed, the FCA (Financial Conduct Authority) is the UK regulator, and one of the most respected in the world.
FCA regulated brokers are almost a guarantee that they are among the best and most reliable in the world, both in the Forex and in other types of markets. Another important regulation in the world is the NFA, from the United States.
Having a regulation in one of these 2 countries is what a broker should have. In these cases we are talking about the regulators where the two main financial centers of the world are located, New York (USA) and London (United Kingdom).
Brokers regulated by security levels
It is important that we can separate the regulations of the brokers depending on the level of reliability of each country.
The regulation of a broker in the United States is not the same as in Cyprus or Vanuatu. It is logical that the reliability and trust will always be greater in the regulators of the countries of the advanced world, mainly North America, Europe, Oceania and some countries in Asia. Although there are European regulators that we consider to be of very little security, for example and especially Cyprus.
We will divide the security of the regulations into 3 levels:
Level 1 Regulated Brokers - The Best Regulators
They are found in First World countries with fully developed economies and advanced financial services. The main ones are:
Germany (BaFIN), Canada (IIROC), Spain (CNMV), United States (NFA, SEC, CFTC), France (AMF), Hong Kong (SFC), Japan (FSA), Singapore (MAS), Switzerland (FINMA) and the United Kingdom (FCA).
Regulators from other European countries such as: Italy, Holland, Sweden, Finland, etc. Some exceptions, that is, regulators from first world countries but which we consider very unsafe are: Cyprus, Malta, Estonia, Bulgaria.
Regulated Level 2 Brokers
These regulations pertain to both First World and developing countries. They are regulators that we consider much less serious, and not recommended, although it is also better to have at least this regulation than no regulation.
Some examples of these regulations are: Bulgaria (FSC), Cyprus (CySEC), Malta (FSA), New Zealand (FMA), South Africa (FSB).
Regulated Level 3 Brokers
These are the regulations that have less prestige, usually they belong to Third World countries or directly to tax havens, WE DO NOT RECOMMEND working with brokers with this type of regulation, we consider this practically the same as not having any regulation, if you are a client of a broker regulated in these countries, consider yourself a 100% unprotected customer and prone to being scammed.
These regulations are as follows:
Saint Vincent and the Grenadines: FSA
Nevis: NFS
Nigerian: SECN
Mauritius: FSC
Dominica: FSU
British Virgin Islands: FSC
Former: ECSRC
Vanuatu: VFSC
As a general rule we can say that the most serious regulations are those of the richest countries, where the chances of being scammed, cheated (or confiscated), are much lower. It is important to emphasize that when investing we must review the reliability and security of each broker and that based on their regulation we can have the peace of mind that they will not scam us.
