What does financial compliance mean for traders?

In recent years, regulatory agencies have developed detailed guidance to ensure that financial institutions will intensify compliance initiatives. As a result, there are more laws, directives and regulations than ever designed to protect traders and make financial markets sustainable. Financial institutions and trading brokers need to comply with such legal frameworks to guarantee a secure environment. Fortunately, most of them apply financial compliance with religious devotion. 


Regulators worldwide constantly monitor the markets and try to spot new types of risks to update their instructions accordingly. Apart from financial watchdogs and regulated entities, there is also a third party in the compliance scene: traders and their personal responsibility.


How can traders make a worthwhile contribution and protect themselves from undesired effects?

"Safety rules are your best trading tools”

Picture this: you’re on a mission to purchase the super-duper gadget of your dreams, but it’s a little on the pricey side. However, you’re in luck! You find a random online store where it’s being sold at a much lower price, so you buy it.


When it arrives, you rush to unwrap it, but you quickly realise it’s a bogus, knock-off version of the gadget you originally wanted to buy. So you go to ask for your money back, but you can’t get through to anyone from the online store. In fact, you can’t get through to the website at all, which seems to be down forever.

What does financial compliance mean for traders?

Sadly, the same sometimes happens with brokers. There are many out there which promise you the world in top trading conditions, but they are missing one crucial thing: regulation


A regulatory body monitors brokers to ensure that they do not manipulate the market. In the event that they do, the regulatory body will endeavour to catch them and impose consequences.


Trading with a regulated broker – i.e., one that is licensed to operate in a particular or various jurisdictions – ensures transparency and protection of traders’ interests. Moreover, as trading has a lot to do with risk management, opting for a regulated broker ensures a high level of risk mitigation


Regulated brokers hold segregated accounts, and they do not mix their funds with their traders’. So, for instance, in the unlikely event that a broker goes bankrupt, clients’ funds cannot be used to repay the creditors.


Another aspect of safe trading is that someone trading with a regulated broker can resort to the regulation watchdog and get the assistance they need to resolve the issue in case of an unsettled dispute.


Regulation ensures that brokers abide by the set rules and standards. Aside from the safety of funds and transparency, a regulated broker also abstains from any financial malpractices. 


As such, the trader’s personal responsibility lies in the fact that they should only choose licensed and regulated brokers to protect themselves and their trades.


Is my broker regulated?


In case you missed it, Eurotrader ticks all the boxes as it is licensed and regulated in several jurisdictions. With our experience and support, we enable everyone, including you, to trade fairly, responsibly and confidently.

Disclaimer: Eurotrader doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. We advise any readers of this content to seek their own advice.

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Working Hours: 09:00 – 17:30 GMT+1