1-1f. Forex companies’ “security” and “reliability”

There were no laws or regulations on trading when "Forex" became possible, and the barriers to entry were low, so there were Forex companies that engaged in unfair business practices that are now unthinkable, such as constant phone solicitation and refusal of withdrawal, high trading fee charges, and unauthorized trading with the client's assets, and there was a time when "Forex" was regarded as a social problem.

As a result, according to the "Financial Futures Trading Law (Gold Destination Law)" updated in December 2004 (enforced in July 2005), Forex firms are required to be registered as a financial futures trading business, and traders who do not have registration are prohibited from dealing in "Forex."

Furthermore, the Gold Destination Law was revised, and "Forex" was certified as "financial futures trading," the same as interest rate futures trading and stock index futures trading, and the "Financial Futures Dealers Association (Gold Futures Association)" was formed as a self-regulatory organization of Forex companies. Since then, the healthy growth of Forex and full protection of clients has been pursued via the establishment of precise laws linked to Forex.

However, it is impossible to say that a Forex company registered as a financial futures trading organization is 100 percent safe. There have been instances in the past where Forex companies that were registered as financial futures trading businesses and were in operation collapsed.

When deciding which Forex firm to create an account with, consider the quantity of "capital" that is believed to indicate the Forex company's size and physical strength, the "capital adequacy ratio," which is a financial soundness indicator, and so on. It's also a good idea to base your decision on such factors.

Furthermore, there are several indicators that are likely to be useful in determining the reliability and safety of Forex companies, such as the "number of accounts" and "margin deposited balance" that are common barometers of Forex companies, as well as whether affiliated companies, such as your company or parent company, are listed on stock exchanges. Furthermore, the level of "minimum trading unit," "spread (trading unit)," "swap point (swap interest rate)," and other directly linked to the result of trading varies depending on the Forex company (FX account), so choosing a Forex company with high overall satisfaction including them will be important.