Accurately Locate Forex Exchanges Through International Licenses

Why Vietnamese Traders Need to Understand Forex Licenses Clearly

Currently, Vietnamese law does not have specific regulations regarding foreign exchange trading activities for individual investors, which means you are fully responsible for your trading decisions. However, this does not mean you should trade on any platform. In developed countries, Forex is an officially recognized financial investment activity, so they have established specialized regulatory agencies (FCA, ASIC, FINMA, NFA, CySEC…) to oversee and license brokerage platforms.

As an investor in Vietnam, knowing how to check forex platform licenses and identify reputable regulatory agencies is essential. This is one of the most important factors to protect your investment capital.

What Is a Forex License and How Does It Work

Financial market regulatory agencies operate across various fields—from banking, investment, insurance to other financial services. They are similar to banking and financial regulators in Vietnam but with a global scope.

The main purpose of these agencies is to minimize risks for investors through various measures: transparent information disclosure, advertising control, monitoring the financial health of trading platforms, systemic risk management, and preventing financial fraud activities. In serious cases, regulatory authorities have the right to revoke licenses or require platforms to cease operations if they do not meet the required standards.

Two Main Benefits of Having a Forex License for Traders

Verifying the Credibility of the Trading Platform

To obtain a license from top regulatory agencies, a Forex platform must pass rigorous assessments regarding: financial stability, operating capital, trading rules, and customer protection measures. Only when these requirements are met will the regulatory body issue a license and conduct periodic supervision. In reality, obtaining a license from a major regulatory agency is very costly, but in return, the platform gains investor trust.

Protecting Customer Funds

According to international management standards, the funds deposited by clients into a Forex platform must be managed through separate bank accounts, completely independent of the platform’s assets. This ensures that even if the Forex platform faces financial difficulties, your funds will not be used to cover their business losses.

The Trade-Off: Security Vs. Flexibility in Trading

An unavoidable issue is: the more stringent the regulation, the better protected the investor, but trading conditions also become more difficult. The most common issue is leverage limits—an important factor in Forex trading. To address this, most large Forex platforms hold multiple licenses from different agencies.

For example, Mitrade operates under two separate licenses: with an account managed by ASIC (Australian authority), offering a maximum leverage of 1:30; and an account under CIMA (Cayman Islands), which can provide leverage up to 1:200. This approach allows investors to choose the level of protection and flexibility that suits their needs.

Important Tips When Checking Forex Licenses

Be Cautious of Discrepant Markets

The US market has its own policies that discourage citizens from trading outside the country. Therefore, well-known US Forex platforms like IG.com or Interactive Brokers do not promote their services globally, even though they are licensed by agencies such as FINRA. Similarly, European platforms do not offer services to US citizens.

Beware of Fake Licenses

Currently, many scam Forex platforms create websites that mimic reputable brokers, even forging licenses from regulatory agencies. To protect yourself, you should verify directly from the official websites of regulatory authorities, check the website address, registration number, and other legal information.

Global Forex Regulatory Agencies Map

Regulatory agencies are categorized into three tiers: Tier I (Highest), Mid-Tier, and Offshore. Large, long-established Forex platforms usually hold at least one license from Tier I.

Notable Tier I Regulatory Agencies

• ASIC (Australian Securities and Investments Commission): Established in 1998, overseeing about 440 trading platforms. Max leverage 1:30. Investor protection up to 500,000 AUD.
• FCA (Financial Conduct Authority UK): Established in 1997, overseeing about 350 trading platforms. Max leverage 1:30. Investor protection up to 50,000 GBP.
• FINMA (Swiss Financial Market Supervisory Authority): Established in 2009, allows leverage up to 1:100. Investor protection up to 100,000 Swiss Francs.
• NFA (National Futures Association (USA)): Licenses only 8 Forex trading companies. Max leverage 1:50. Investor protection program specifically for US citizens.
• FSA (Financial Services Agency Japan): Max leverage 1:25, protection applies only to Japanese citizens.

Mid-Tier Regulatory Agencies

This group includes CySEC (Cyprus), CBRC (China), MAS (Singapore), and others. The supervision level remains relatively strict but with lower capital requirements than Tier I.

Offshore Regulatory Agencies

Licensing authorities in regions like Cayman, Belize, Vanuatu, or Bahamas have much simpler requirements (capital just a few tens of thousands USD, annual fees of 600-2500 USD). However, a platform with only an offshore license and no Tier I license is less guaranteed to be completely safe for investors.

How to Properly Check a Forex Platform’s License

When verifying any Forex platform’s license, you should:

1. Visit the official website of the regulatory agency directly (not through links from the platform’s website)
2. Use the agency’s search tool to look up the company name or registration number
3. Compare information: official company name, registration number, license type, issuance date
4. Verify the registered address to confirm validity
5. If the platform provides links for verification, check independently rather than just clicking according to the platform’s instructions

Criteria for Choosing a Reliable Forex Platform

A license is only part of the overall picture. A trustworthy Forex platform must meet the following requirements:

• Hold a Tier I license: FCA, ASIC, FINMA, or equivalent organizations are top priorities
• Long operational history: How long the platform has been active, its reputation
• Stable trading infrastructure: No system interruptions, comprehensive analysis tools
• Products matching your needs: Offering tools, currency pairs, and conditions suitable for your strategy
• Customer support services: Professional, timely support team

If a platform only has an offshore license without any Tier I license, you should be cautious. If it holds a Tier I license and also has offshore licenses, this allows you to choose the level of protection and trading flexibility that best suits you.

Conclusion

Knowing how to check a Forex platform’s license is not complicated but very important. It is the first step to protect your investment capital and avoid falling into scams. Save this article for easy reference when verifying any Forex platform before starting trading.