Dubai has been one of the fastest growing financial and economic centers in the world over the last two decades and Forex trading has also seen a boom. While the United Arab Emirates is one of the world’s growing economies by itself, Dubai has definitely been the forerunner. UAE, of course, has its own regulatory bodies but Dubai as an international financial center seeks to provide a regulated financial environment of international standards under it, forming the Dubai Financial Services Authority. The DFSA regulated brokers will thus have to follow NFA guidelines and requirements, as well as the DFSA directive.
The DFSA Regulation
The Dubai Financial Services Authority was founded in 2004 as a central financial authority in the special zone of Dubai International Financial Center. It is interesting that the DFSA is divided and separate from the United Arab Emirates federal authority which regulates the rest of the country. DFSA registers authorizes and regulates the Forex brokers in Dubai, actively enforcing the laws and regulations on financial services conduct for companies working in or from Dubai. The agency was founded by and administers the Regulatory Law of 2004, which is also the constitution of the Authority and the regulatory framework for the financial services companies, including Forex brokers.
The Specific Rules Of DFSA
Without any doubt, Dubai is a huge financial center and home to many of the world’s richest traders and businessmen. Yet, Dubai is a center in an Islamic State of UAE where Sharia law is a reality and the laws of the Sharia when it comes to money are quite a bit different than those in Europe or America. That said, the city’s Dubai International Financial Center now allows for something that was not possible in the past, which is for foreign owned companies to operate within Dubai in their extremely forgiving financial climate, where taxes are low and opportunities abundant. This type of international approach now allows foreign investors to invest in Dubai with very little government interference.
What Does DFSA Do For Forex Brokers?
Like other regulatory agencies, DFSA makes sure that all Forex brokers and many other financial institutions that operate in Dubai work within a legal framework set by the state of UAE. While this legal framework is somewhat different than that you may expect in a European nation, the one thing they certainly share is the safety. The main reason for DFSA’s existence is to protect all the parties involved in financial transactions in Dubai from any type of fraud or dishonest trading practices. This means you as a trader will be protected against malicious brokers, while the broker will also have recourse if they believe a customer has found a way to defraud them.
Why Choose DFSA Regulated Brokers?
While this question comes up quite a bit, the answer is very simple. You want to trade with operators who are safe. DFSA only issues licenses to those brokers who comply with their strict regulations, but many other companies may attempt to enter the lucrative market of Dubai and basically steal the money from naïve investors. This is why the only way to trade with a degree of certainty with Dubai brokers is by finding those brokers who are regulated by this financial agency. This will ensure you are trading in a safe and accommodating environment and have recourse should there be any attempt at unfair play by the broker.
Fraud is ever present in the online Forex market, as it is a young market and today’s world is full of those trying to take advantage of naïve or less experienced people. This is why the Forex market has become a real target for all types of fraud artists. An easy way to find out if a broker carries a DFSA seal is by checking their website. If the seal is displayed there, in most cases, the site will actually be regulated by the agency. However, in some cases, very malicious individuals may actually display a seal on their site that does not exist. This has happened with both the DFSA and other regulatory bodies, whose seals were falsified by brokers whose only intention was to amass deposits and run off with the cash. The only real way to protect against this is to check every seal you see with the actual site. You can find a list of the seals that are actually given out by the body on their website and there is no shame in contacting the DFSA directly by email or telephone and checking with them personally if a broker is licensed by the body.
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Top DFSA Forex Brokers: Constantly Improving Their Services
Dubai, as one of the world’s biggest financial centers, is a Forex hotspot and there was an obvious need for legislation, authorization and more strict regulation of the brokers and market in general. Forex brokers in Dubai are thus controlled within a firm regulatory network headed by DFSA. Through exercising its powers and enforcing several high-quality laws, DFSA ensures transparency, financial stability of the industry, consistency of the market and the overall reliability of the DFSA regulated brokers. Dubai Financial Services Authority thus ensures top-quality services to the end customers with high liquidity, software quality and reliability, safety in banking and data privacy, as well as customer care standards. DFSA also gives direct input to the traders via its website and other available sources, promoting understanding of the regulation and the market in general, further maintaining confidence in the DIFC industry and itself as the top regulatory body. DFSA regulated brokers are bound to constantly improve and provide consistent service, which very much helps the Dubai market.