ThatSucks.com (former BinaryOptionsThatSuck.com) Welcomes the Forex Financial Commission
Thomas Hobbes, the English philosopher, said that a person not only needs to be controlled by an agreed ruler, they actually WANT it. Global finance now puts this statement to the test, as there is no international organization that can completely control and regulate global Forex transactions. National regulators are doing their best to control firms within their jurisdiction, yet there’s no central international committee to be able to abide by a universal set of rules. When problems arise, there’s no “international cop” to stop the evil forces from robbing the innocent.
When it comes to the field of Forex trading, even though it is widely regulated in certain countries the chaos still rules the majority. The problem is too many brokers are opening up shop to do business, the internet is filled with disinformation and too many newbies are being dragged into helpless situations, losing their hard earned cash. In most cases no one tried to scam anyone, however there are exceptions in some cases where it’s a pure scam. Luckily for us traders, there are online communities that had already raised the glove in the fight against frauds. With the announcement of the Financial Commission for Forex, we might be witnessing the next evolution of an “international cop”, an international independent commission whose goal is to help resolve disputes between Forex brokers and their traders.
The business is still in its infancy but has a promising future that could lead to a trusted organization for the trading community. The Commission aims to provide a third party, objective mediator for disputes arising between Forex traders and brokers. One of the main benefits for brokers and traders alike is that it is a viable alternative to legal or regulatory action. Membership in the commission is available to all Forex brokers and financial service providers, pending approval by the overseeing committee. The dispute resolution committee is comprised of industry professionals from all sectors of the financial and Forex trading industry. The services provided by the committee are free to all consumers and anyone can file a complaint.
Financial Commission – The Light at the End of the Tunnel?
The Financial Commission officially started taking complaints as of October 1st. From what I know, the commission has dealt with 5 complaints so far. Not bad for a newly founded organization! Nevertheless, commission members agree that the complaints they received are far from being “outrages”. Most complainers are doing so mostly because of technical problems related to execution issues. As I said above, the widely regulated Forex industry is far from being a scam free environment, while most of these scams and frauds are being taken care of pretty well by communities such as ForexPeaceArmy.com. The commission was not born to fight these scams, but to help those individual traders trading with a legit broker settle their issues with the broker. Communities like the FPA cannot do much in favor of traders who lost money allegedly due to the broker’s fault, and that’s where the Financial Commission takes things into their own hands. For example there was a complaint by a trader who attempted to straddle a news event and the market spiked up but his Buy Stop order was not executed. Needless to say the commission helped him resolve his issues. Other complaints are related to platform freezes, slippage, and price gaps and stops not being honored.
Although we have already seen a few complaints resolved by the commission, the real question is whether this commission will be effective. They have no legal measure to perform, no national or international government or non government organization to support its efforts and no physical ability to act cop like. So why should brokers join the Financial Commission? Well, it’s a question of business opportunities. As part of their membership agreement, brokers have to honor the commission’s decision. If they refuse to honor the decision, they can be removed from the commission’s membership. As a member of the commission commented, the ball is now in the hands of the traders. If they join the organization and put their trust in it, we’ll all profit. The power of consumers is not hidden from the eyes of the brokers; they know this is one fight they can’t win. It’s up to the traders now to put their faith in the commission.
The Financial Commission – Step by Step
Once a trader makes a complaint there is a three step process. First comes the investigation phase in which the committee will look into the allegations. After that comes the determination phase in which the committee will evaluate the evidence and determine if the broker is at fault or not. If the broker is found to be at fault then the process moves into the settlement phase of the resolution process. Non-compliance with a determination or request of the Commission or the Committee can result in the client broker to be expelled from membership, thereby losing market confidence. At this time there are 6 member brokers. Alpari, AForex, FXOpen, FXFair, Lionstone Financial Services, and MFX Broker. These companies represent the top international retail Forex and CFD brokers.
In an effort to bridge the gaps between the international regulatory communities, the Commission is based in Hong Kong but will operate across borders and outside the limitations of traditional financial regulation. As the Financial Commission grows and more brokers join they will grow stronger together. Membership in the Commission is seen as a way to boost trader confidence in individual brokers and Forex trading in general. According to ForexMagnates.com’s Michael Greenberg, the “Financial Commission will bring a fresh direction to resolving trader broker disputes“. We believe him, and will be joining the efforts to publicize the commission. This might really be the beginning of an optimistic era for all Forex traders out there; I truly believe brokers and traders should join the commission without second thoughts. Cheers for a better trading world!