Regulated forex broker | US regulation difference

[5starsmarket]

Care should be taken to verify each ownership, status, and location of each Forex trading firm, website, or app before signing-up for a trading account. There are many websites claiming low brokerage charges and high leverage (allowing more trading exposure with less capital), some as high as 1000:1. However, almost all such sites are hosted and operated from outside the US and may not be necessarily approved by the concerned authority in the host country. Even those authorized locally may not necessarily have regulations that apply to US residents. Regulations may slightly vary from country to country in terms of offered leverage, required deposits, reporting requirements, and investor protections.
The National Futures Association (NFA) is the “premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets” (including Forex). The scope of NFA activities is as follows:
• After due diligence, provide necessary licenses to eligible Forex brokers to conduct Forex trading business.
• Enforce required adherence to necessary capital requirements.
• Combat fraud.
• Enforce detailed record keeping and reporting requirements regarding all transactions and related business activities.

[BubbleGum]

Regulated brokers are those who are registered with the financial regulatory body of their country (for example the FCA in the UK) and who must comply with the rules set down by that body. Unregulated brokers, on the other hand, do not have to comply with any rules but can behave in any manner they see fit.

[mlawson71]

True. Unregulated brokers are a big problem for the industry, they are often involved in scams. It's always recommended to avoid such entities.