Why Should You Choose FMA Forex Brokers?
FMA, or Financial Markets Authority, is the financial regulatory arm of the New Zealand Government that deals in licensing, regulating, and supervising the conduct of all companies involved in the financial sector. The FMA is a new entity that was introduced in the year 2011, and the operational framework of the FMA is determined by the Financial Markets Bill as well as the Financial Markets Conduct Act of 2013. FMA is the highest authority in the nation that oversees the day to day operations of its member firms to ensure that the country does not face the problems faced by the New Zealand economy from 2006 to 2010. Modern day FMA regulated brokers are licensed according to the international standards of regulation, and the agency has built its framework of operations by carefully incorporating features from other leading regulators such as the neighboring ASIC, the FSA, and the NFA.
Criticisms & Ineffectiveness Of Past New Zealand Regulators
FMA was conceived after the severe failures of past regulatory agencies of the NZ Government, which led to widespread criticisms and economic turmoil. The Securities Commission of New Zealand, which was the primary regulatory agency in charge of regulating financial companies, had been unable to prevent the rise in scams and financial crimes during the period from 2006 to 2010. The global financial crisis of 2007-08 made matters worse as the New Zealand economy took its worst hit in decades, and the resultant aftermath forced the country to intervene and restructure its regulatory guidelines for a transparent, honest, and stable economy.
The Securities Commission of New Zealand was ineffective in dealing with financial frauds, as several regulated brokers indulged in scams and other unethical means to trick investors, which led to several traders losing millions of dollars in trading capital. Together with an economic collapse, New Zealand was faced with investor disdain, financial malpractices, and even genuine brokers running into financial ruin. Therefore, the previous regulatory policies of the Securities Commission of New Zealand had failed completely.
How Did FMA Regulated Brokers Turn The Tide Around?
The New Zealand authorities immediately stepped in to stem the freefalling economy and started introducing powerful regulatory authorities that were capable of dealing with financial irregularities in a stern manner. The FMA was a result of the Government’s approach towards creating a powerful organization that was entrusted with the task of regulating and supervising financial firms without the fear of any backlash. The FMA has total control over its firms and has the authority to issue licenses, revoke them, issue penalties, and even suspend licenses on a temporary or permanent basis.
FMA regulation has managed to change the perception of the New Zealand economy, and over the past few years, New Zealand has managed to gain back the trust of their investors through proactive efforts of monitoring FMA regulated companies. At present, the FMA provides its investors with the option of contacting the FMA regarding any complaints against regulated firms, and traders can send in their grievances through emails, fax, web contact form, or through helpline numbers. The FMA continually seeks help from consumers regarding any information about the conduct of financial firms and organizes periodic surveys to get a first-hand idea about whether companies adhere to the strict code of conduct enforced by the FMA. Consumer abuse or scams are dealt with severely, as even smaller infractions attract substantial penalties and temporary suspension of licenses.
How Did The New FMA Regulatory Reforms Affect The Market?
Although the new regulations helped in restoring investor confidence, several genuine FMA Forex brokers were affected due to the policy changes between the Securities Commission and the FMA. FMA was introduced with an entirely new rulebook that outlawed a wide variety of regulatory guidelines issued by the Securities Commission. Therefore, genuine brokers that were licensed by the Securities Commission found their licenses revoked and banned from operating in the New Zealand financial markets, even if they indulged in honest brokerage services.
The transition between the Securities Commission and the FMA was not carried out in an organized manner, which affected numerous brokers that had a thriving brokerage business. The new FMA regulation not only affected their bottom line but also interfered with the trust that these companies had built up with their clients. Nevertheless, the FMA did manage to bypass the oversight by granting licenses to existing brokers on the particular condition that all brokers were required to conform to the new regulatory guidelines within a prescribed amount of time. At present, all FMA regulated Forex brokers obey the most stringent FMA guidelines that have helped New Zealand to regain its position among the elite countries that are home to some of the trusted and reliable regulatory organizations in the world.
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What Are The Other Advantages Of FMA Regulated FX Brokers?
FMA is committed to adhering to the international code of conduct regarding anti-money laundering policies. The Anti-Money Laundering and Countering Financing of Terrorism Act of 2009 is specifically designed to discourage all instances of money laundering by member firms, and the FMA does not provide any exceptions to the cause. All FMA regulated companies should provide a clear statement of their financials through regular audit reports, and should update the FMA about all financial dealings, both local as well as international. A lack of proper reason for any financial irregularities will attract hefty fines along with a cancellation of the FMA license, and the FMA is free to initiative legal action against a company.
The FMA has more power in its organizational structure than some of the other leading regulators, which can be a good thing for traders and investors. On the other hand, brokers might find the rules to be one sided, which should prevent brokers from indulging in any financial scams. The strict sanctions and substantial penalties are further incentives for companies to avoid financial malpractices altogether, which work in increasing trader trust.
Although FMA does everything in its power to eliminate scams and dishonest Forex brokers, there are a few companies that falsely advertise about a valid FMA license, when in fact, they are not affiliated with the organization in any manner. False New Zealand regulatory status was more prominent during the Securities Commission regulatory period, but some companies also take undue advantage of claiming false FMA regulation to this present day. The FMA actively seeks out such companies and add them to their scam alerts, which are updated periodically for investors to stay away from such scams.
FMA is a great regulatory organization that has learned from its past mistakes and is intent on working with investors to create a transparent economy that operates in the best interest of a trader. FMA regulated Forex brokers can indeed help traders to enjoy a successful trading journey, especially if they have a great strategy to make consistent profits.
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