Forex market regulation

Posted on October 20th, 2008 by admin, under Uncategorized.

As an investor explores forex regulatory issues, it becomes abundantly clear that international forex trading does not have a uniforin regulator.

Forex market regulation

Some argue that forex trading is totally unregulated, but that is a false assumption. For anyone to assume that a market could grow to the magni-tude of the foreign exchange market without rules would be preposterous. The Bank of international Settlements has estimated that the global net daily turnover in the cash foreign cuiiency exchange currently exceeds $950 billion per day. In a speech before the Financial Markets Conference of the Federal Rmrve Bank of Atlanta, in February 1997, Federal Reserve Chair-man Alan Greenspan said “… it is critically important to recognize that no market is ever truly unregulated. The self-interest of market participants generates private inarket regulation.” The “self-interest” of the participants in international foreign exchange trading has created a body of conventions and contract law that “regulate” forex trading.

The most uniform contract created is the customer agreement drafted by the International Swap Dealers Association (ISDA), which stands as the boilerplate for many of the customer agreements of this marketplace.