BFSC stands for the Bulgarian Financial Supervision Commission which is in charge of the Bulgarian Forex market. Bulgaria is an EU member state, and it automatically has to comply with the MiFD directive (Markets in Financial Instruments Directive). This means that Bulgaria works in line with the highest EU standards and according to the best practices defined for the financial market. This comes as a relief to all those who were somewhat skeptic about the Bulgarian and other minor and less-known markets, given that all EU countries have to abide by the same legislation.
BFSC in a Nutshell
The BFSC was established in 2003 and reports to the Bulgarian National Assembly. The Commission was formed to regulate and supervise the capital market, insurance, pension insurance, and health insurance market. Fairness, transparency, customer protection, and market stability are the goals of BFSC. They supervise the financial situation and the accuracy of information provided by the companies and if they comply with the defined regulations. The BFSC regularly sanctions deceitful brokers and informs and warns the public about them. Those are usually scammer Forex brokers who violate the law by indulging in manipulation, malpractice, deception, etc.
The Appeal of Trading in Bulgaria
Opening a regional Forex office in Bulgaria could benefit every international broker company. There are a few advantages that only Bulgaria can offer. First of all, as a part of the EU, the broker would be automatically allowed to trade in any EU member state. We know that the same goes for other EU states as well, but Bulgaria has lower taxes with a corporate tax rate of only 10%. The licensing costs are also not too high, and Bulgaria has a work force ready which works for significantly lower wages than people in many other EU states. International brokers can save up a lot of money in the long run when they open offices in developing countries. Bulgaria is a great example, where overall costs stay low and quite modest. Bulgaria welcomes international Forex brokers with open arms and even has an agency called Forexjobs.bg which assists Forex and binary options companies in establishing offices in the country. They recruit employees, arrange training, provide legal assistance, etc. All this indicates Bulgaria really counts on the Forex market in terms of reducing the unemployment rate in the country, and advancing the economy in general.
Casual Approach to Enforcing Rules
Although BFSC stands for everything mentioned above, it seems that many of their rules exist on paper only. Bulgarian Forex brokers have often been accused of not maintaining the best practices and taking advantage of the BFSC’s rather light-touch approach when it comes to actually enforcing their own rules. BFSC regulated brokers already get to enjoy many of the country’s benefits, like the fixed 10% income tax and the fact the average wage in the country is really low. Those brokers who set up offices in the country, as already mentioned, can expect to significantly cut their costs and thus increase their bottom line. However, what truly attracts Forex brokers to Bulgaria is the flexibility of the regulatory body. BFSC regulated brokers will not easily lose their licenses and the Commission will usually only go after the biggest offenders. Others will be left alone, provided they don’t go too far outside of the legal framework.
Forex Market as a Help for Struggling Economy
While it is fair to say that BFSC regulated brokers are not kept on a short leash, it is not the situation where the regulator simply turns a blind eye to everything. Bulgarian Forex brokers are simply given a bit more maneuvering space, if you will, which isn’t something you like to hear as a trader, but it may be necessary for the country. Bulgaria is trying to utilize the newly created Forex popularity and boost the country’s overall economy. New brokerage firms mean new jobs and more people getting involved with trading could also mean the influx of significant new capital. While Bulgaria may require its brokers to only observe the very minimum requirements set in the MiFID directive, this doesn’t mean that traders are left completely without protection. It simply means that BFSC is trying to balance between staying competitive and attracting new companies, while at the same time making sure truly shady companies are kept away.
Honest Forex Brokers
Finding the Best Forex Brokers in Bulgaria
While everything mentioned in this article may not be a confidence booster for those looking to get involved with Forex in Bulgaria, the fact is there are some decent brokerage companies there. Top Forex brokers in Bulgaria will treat you just as well as any international or EU regulated broker, simply because they want to keep you as a client. It is important to understand that licensing is not the end-all, be-all in the Forex market. While BFSC regulated brokers usually offer better conditions than the unregulated ones, serious Forex brokers, regardless of their licensing, will always make sure to provide you with the best spreads, a lot of information, and easy access to your funds. The best Bulgarian Forex brokers are no different in this regard. You will be well taken care of and given opportunities to make money trading. If, however, things do go south for whatever reason, and you feel like you are being cheated or treated unfairly, you can always lodge your complaint with BFSC.