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Forex Brokers in Belize (FSC)

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The foreign exchange market has undergone a steep evolution in the last decade, mainly due to changes in the regulatory landscape across Europe, the UK and Australia. These jurisdictions were the primary forex trading hubs through which most retail traders conducted their business. However, regulation changes have redefined how forex brokers in these countries can do business.

The trading environment in these areas is now more restrictive, as traders have to start with far more capital to trade than they used to. This is now working in two ways in favour of forex brokers in Belize and other offshore locations. Firstly, there has been a lot of decentralisation of the forex brokerage business. Many firms in Europe and the UK, who have seen a decline in their client numbers as the new requirements price out their clients, are now opening offices in offshore locations to take the business to the clients under more favourable conditions. This has created competition and strengthened the standardisation of practices by brokers who previously operated loosely unchallenged. Regulators have been forced to up their act and step up the protective mechanisms for clients who are now registering offshore trading accounts in numbers. Secondly, it is good news for traders unable to afford Europe's stiff margin requirements. Not only can they have access to great trading conditions, but they can also operate trading accounts under improved regulatory environments.

When it comes to forex brokers in Belize, this article will help you answer these questions:

  • What will trade with a Belize forex broker mean for me?
  • What do I expect to encounter in terms of trading conditions?
  • How will my money be kept safe and secure?
  • Is Belize forex trading regulated, and if so, how does regulation affect me?

Here is what you can expect to encounter when trading with a forex broker in Belize.

Structure of Forex Regulation in Belize

All forex brokers in Belize are regulated entities. The Belize International Financial Services Commission (IFSC) is responsible for the authorisation and licensing of companies wishing to engage in forex brokerage activity in Belize. The organisation regulates the forex market via the Computer Wagering Licence Act provisions. This law makes it unlawful for any company to offer forex brokerage services in Belize without registration and authorisation by the IFSC.

To this end, the IFSC has drawn up the conditions for licensing forex brokers, which are contained in its FX Standard Conditions document. These align with the Financial Services Commission Act from which the IFSC draws its powers of regulation and enforcement.

To become an authorised and regulated forex broker in Belize, an intending service provider must pass through three stages:

  1. Company incorporation and opening of a dedicated bank account to run the business and fund the paid-up capital.
  2. Applying for an IFSC licence and forwarding all documentation required.
  3. Perform all post-licensing mandates required to keep the forex brokerage in good standing with the regulators.

Forex Brokers in Belize: What Traders Stand to Gain

Forex brokers in Belize are offshore forex brokers. Compared with forex brokers in Seychelles, the capital requirements for a forex broker in Belize are more stringent. The regulatory process has been quite organised for longer, and the IFSC has functioned as a solid regulator. This has improved the standing of forex brokers in Belize over their peers.

Here is what forex traders stand to gain when they trade with forex brokers in Belize.

  • The IFSC licence requires forex brokers in Belize to hold cash or qualified securities approved by the IFSC, which are far more than customer debit items. The IFSC routinely screens these brokers to ensure they maintain this requirement. This ensures that defaults in payments of withdrawals to customers do not happen.
  • Customer funds must be segregated.
  • The forex brokers in Belize must maintain physical control or possession of excess or fully paid margin assets carried for customers.
  • Brokers cannot encourage excessive trading on customer accounts to increase their spread income. The principles of fair dealing must be followed.

The regulator strictly prohibits improper use of customers' funds. This point is part of the terms of reference for brokers receiving their IFSC licences. This point puts a great deal of responsibility on the brokers to ensure that no wrongdoing on clients' funds occurs.

Forex brokers in Belize are required to segment their clients on a risk-assessment basis when onboarding them so that risk-averse customers are not permitted to trade instruments whose volatility will put them at unnecessary risk.

Brokers are required to report any complaints filed by customers to the IFSC and must make attempts to address such complaints promptly.

Regulation of Forex Brokers in Belize

The requirements for a company to be granted a licence to operate as a forex broker in Belize are as follows:

  • The company must be incorporated in Belize as an International Business Company (IBC). This will require the payment of the relevant fees, appointing shareholders and directors, etc. The incorporation request must be accompanied by government-issued IDs, bank statements, an updated CV and documents showing proof of residence. The process involves due diligence checks on the company's shareholders and its directors.
  • Documents to accompany an IFSC license application are police clearance certificates, bank reference letters, professional references from a lawyer or accountant and a business plan which also should indicate the target market of the forex brokerage business will be.

Documents must all be notarised by a Belizean public notary and must be presented in the English Language. Some documents must be apostilled. Other requirements that must be fulfilled for the IFSC application to be successful are as follows:

  • The shareholders and directors must have no criminal records.
  • There must be a paid-up charter capital of $500,000.
  • Annual fee payments of $25,000.
  • The forex brokerage must possess a physical office in Belize.
  • One of the directors must be a resident of Belize.
  • Reporting requirements must be fulfilled. Such reporting requirements include the provision of monthly statements to the customers.

The process ensures that only those of good character will ever own or operate a company that will serve as a forex broker in Belize. It also ensures that the company is liquid enough to fulfil all customer withdrawal requests when they arise. It also ensures that the forex brokerage is known and traceable and that those who operate the company are real people who can be reached. This also allows the regulators to carry out proper oversight and puts them in a position to conduct physical visitations and enforcement activity if necessary.

What Can You Expect in Terms of Trading Conditions with a Forex Broker in Belize?

The forex brokers in Belize provide the following trading conditions:

A) Trading Software

The MetaTrader4 trading platform is the most common trading platform deployed. The MT4 allows its users to trade with forex robots, custom indicators, and other MT4-compliant plug-ins such as Autochartist and Trading Central. Do not forget that one of the hallmarks of the Belizean jurisdiction is the relatively cheaper cost of setup of brokerage operations. The MT4 is relatively cheap to set up, and the brokers do not need to spend so much money in creating an in-house proprietary application.

B) Margin Requirements

Margin requirements for FX and CFD trading are very generous. It is not uncommon to see forex brokers offering leverage of up to 1:3000%. The generous leverage means traders do not need to come up with the excruciating margin requirements that are obtainable in the UK, Australia and Europe.

C) Commissions & Spreads

As required by the regulators, the segmentation of traders has prompted these brokers to offer several account types to match the risk assessments of traders being onboarded. Cent accounts, raw spread accounts and swap-free accounts are offered, as are crypto-only accounts.

D) Account Types

Several forex brokers in Belize offer standard accounts and raw spread accounts. Consult each Belize forex broker listed here to determine their account types.

E) Account Funding

Traders will have access to a wide range of funding options. E-wallets are the predominant method in terms of number, but traders can also fund accounts with cryptos, bank wires and local currency funding methods. The use of credit/debit cards is supported in selected countries.

F) Local Currency Options (Selected Countries)

Some forex brokers in Belize now offer local currency options for traders in selected countries. This removes the problem of trying to get foreign exchange, especially if the country in question is subject to foreign currency restrictions by the central government.

Conclusion

Forex regulation in Belize is one of the more advanced among offshore forex jurisdictions. This provides added levels of safety and security of funds for traders wishing to trade with forex brokers in Belize. You can scroll through the list of these brokers and check each individually to determine which is best for you.