Providing brokerage services at Forex
Who is a broker? In translation from English. is the mediator. In fact, the broker is a legal or physical person who acts as a conciliator to ICA by buyer and seller (e.g., Forex), the policyholder and the insurer (insurance broker), etc. The broker's remuneration is determined by the Commission (for Forex is part of spread and/or one-off Commission transactions by a trader when opening).
Broker and dealer
The broker in the securities market (CENTRAL BANK), including Forex, is a legal person, a sales representative, a professional participant of securities market, which has the right to conduct transactions with securities on behalf of the customer and at his expense, or on its own behalf and for the account of the client on the basis of certain contracts with a customer.
Introducing Broker receives client requests for conclusion of transactions on the Exchange, but does not account personally or take money directly for payment of margin or deposits.
Brokerage services are licensed. License for brokering activities until 2004, was issued by the Federal Commission for SECURITIES markets (FCSM), now it makes the federal financial markets service (FFMS).
Providing brokerage services to the buying or selling of SECURITIES (or other assets such as currencies or precious metals). The broker can give his client advice about a particular CB (currency). To do this, the analysis of the market situation, identifying trends in the asset and the subsequent preparation of the forecast. Forecasts are available for analytical or news sections of the site. Predictions are only the opinion of the analyst and did not guarantee 100% accuracy.
Unlike a broker, dealer, also a PR professional SECURITIES market participant commits the transactions with SECURITIES or other assets in its own name and at his own expense.
Dealers and market makers (marketmakers)
Dealer trade differs from the brokerage availability of additional commitments, which is implemented by public sale prices. The execution according to dealer prices in pre-specified time period required. Therefore, large dealers can become market makers.
According to the legislation of the RUSSIAN FEDERATION, the dealer can only be a legal person. The dealer is licensed by FCSM previously. There are licensed for operation with corporate and Government SECURITIES. To guarantee the execution of trades, the dealer must atten to sufficient equity capital, the minimum size set by the law. The dealer can simultaneously engage in brokering activities.
Having the obligations related to the listing of SECURITIES, the dealer generates additional liquidity in the market. In addition to public announcements, the dealer may report and other important conditions that are necessary to conclude a contract of sale (for example, volumes, duration of the declared prices, etc.). Market participants, knowing the conditions of execution of deals, evaluate them and, in the case of agreement, entered into with the dealer deal on its proposed terms. The dealer undertakes to perform the transaction. The Russian legislation on the CENTRAL BANK ensures that all conditions of the contract between the participant and the dealer were fully implemented.
On the stock market, the dealer usually has information about the issuer, which is not always available a wide range of players on the market. Therefore, the dealer is obliged to disclose this information, consulting for clients to purchase certain SECURITIES or other assets.
Responsibilities and profits dealer
Under the law, the dealer shall:
● Act on the basis of the interest of their clients.
● provide clients the best conditions of trade execution.
● to provide clients with the necessary information about the State of the market, issuers, prices, risks, etc.
● do not manipulate the price and deliberately distorted information provided.
● to make transactions in accordance with the instructions of the clients (in order of priority) in relation to the operations of the dealer, if you have a combination of the dealer and broker.
The dealer's profit may consist of:
1. spread (the difference between the purchase and sale).
2. various commissions.
3. payment for the provision of advice and information.
Brokerage services are needed to ensure that individuals could be trading participants in the financial markets. Very convenient trading remotely, over the Internet. All you have to do is learn the theory, sign up with a reliable Forex broker (dealer) Forex and start trading.
We recommend you familiarize yourself with trading conditions the following brokers: Forex4you, Alpari and InstaForex. Each of them provides its clients with analytics, news and free trading.
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