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UK Regulator Imposes New Rules on Introducing Brokers

The Financial Conduct Authority (FCA) has shown its watchdog's teeth to affiliates of Forex brokers – the first serious move in the sector since the UK regulator emerged in April 2013. For some time now, FCA-regulated Forex brokers have been sending their introducing brokers e-mails, informing them of tighter rules that come into effect in the new year. By the way, in case you are an affiliate of a UK broker, you'd better check your mail and follow the instructions so that you don't suffer any problems, including blocking. 

 
But you must already be curious about the conditions for IBs – in general terms, all IBs working with a given Forex company should be approved by the company. Vice versa, the traffic from the IB lacking permission will be blocked from the Forex broker and this IB will be in reality prevented from earning from the partnership.
 
For starters, the IB should clearly specify the products with which the Forex broker works – these are CFDs in the usual case.
 
The requirements for warnings about risks are mandatory now: “Your capital is at risk” sign should be present along with the promotional text.
 
(Here is one of my personal favorites.) IBs should not advertise bonuses as “free” but as “sign-up” or “welcome” ones. 
 
When referring to the regulation of Forex brokers, IBs will no longer be allowed to use phrases like “FCA-regulated”, as the abbreviation is forbidden. Instead, they can only use the phrase “authorised and regulated by the Financial Conduct Authority”.  
 
Continuing with the grammar exercise, the words “earn” and “invest” should not accompany “CFDs”, as the latter are no means of long-term investment. 
 
IBs should also use only marketing materials provided by the Affiliate services of the relevant Forex brokers. 
 
Overall, the rules are not that rigid but loom more as another red-tape move by the FCA. It's a bit strange that the watchdog did not publish any information on the move on its designated website but instead threw all of the weight of informing about the reforms on Forex brokers. This sort of contradicts to the transparency idea, which the regulator labeled as one of its main work pillars when it was born less than a year ago. 
TAGS: uk forex  uk forex market  fca  financial conduct authority  forex regulation  ib  introducing brokers  forex marketing  forex bonus  forex promotion  forex rules 

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