It has been a long time coming, however if some gambling charities get their way, Forex related trading sites are going to be subject to the same laws and regulations as gambling sites, however whether they get their way is open to much debate.
The main problem with such sites especially in places such as the UK is that as long as they hold a trading license in any EU member state they are legally allowed to offer their services to all other member states, often subject to the laws surrounding financial services.
However, gambling charities are insisting that when you trade Forex on a Forex Broker platform you are not performing a trade in the full sense of the word you are instead gambling.
There is some merit in what they are saying however, for you do put at risk the stake you place on such trades, and run the risk of losing it if you predict the way two currencies will move against each other, over any given time period the wrong way, and when you buy and sell currencies you are at least going to get something back if the value of one drops against the other as opposed to potentially nothing back!
How Forex Trading Works
In complete layman’s terms, when you choose to sign up to a Forex Broker platform you are faced with initially paring up to different currencies such as trading US Dollars with GBP, and then deciding which way the value of those currencies will move over a selected period of time.
The Forex Broker will offer you a pay-out, often referred as a percentage of your trades value that will be paid out to you on top of your trades value if you predict the movement on those currencies correctly, however if the trade doesn’t end up the way you predicted you lose your investment on that trade.
What Regulatory Changes Will Forex Brokers Have to Make?
If they day ever does come when Forex Broker have to operate as gambling sites then there will be a raft of changes that they are going to have to implement to ensure that they comply with currency gambling laws, in place in many different countries of the world.
The very first that that they will have to address is having in place a way for their clients to self impose a range of limit settings on their account when they log into a trading platform, such as setting deposit limits and maximum loss limits too.
However, apart from that, as long as Forex Brokers do make it clear that their customers do run the risk of losing their funds, and also have in place some very robust responsible gaming polices, such as giving their customers the option to take a break from trading or even self exclude themselves from such sites, then maybe it is a good thing, and will help traders reduce the risks they always put their trading funds at when using such a service.