Brokerage Business Standards
Over time, it has become increasingly easier to find a reliable company online that operates long-term, without issues, quickly processes withdrawals, and provides favorable trading conditions for its clients. There are plenty of articles, video reviews, and other information available that distinguish a genuine brokerage company from one that merely wants to appear as such. Unfortunately, not everyone looks into this information until they encounter their first setback in trading. We have decided to educate our clients on the standards of the brokerage business, knowledge of which will help you on your journey.
The Company Must Provide Accessible Information About Its Registration
A brokerage company can be registered anywhere — in an offshore zone (the most popular being St. Vincent and the Grenadines, Belize, Cyprus), in the Eurozone, Australia, or Russia. The differences lie in the taxation system and the political stability of the registrar. In any case, a registration certificate or a link to it should be easily accessible on the website. If there is no information about the registration, it’s likely that you are dealing with a shell company.
Income Generation Process
One of the most crucial criteria is aggressive marketing. It is impossible to guarantee profitability in any form of investment since there is no mechanism that ensures 100% returns. All investment activities, from real estate purchases to investments in financial pyramids, carry risks that are known in advance. Accordingly, you may earn a profit, or you may not — there are no guarantees.
Transparency in Profit Generation
Money generates money only as a result of some activity; income doesn’t come out of thin air. Some companies lure investments by convincing clients that they need to do nothing, and profits will simply be added to their accounts. A prime example is depositing money in a bank: you open an account, the bank uses your money and pays you a small percentage (which, from our perspective, isn’t entirely fair—a percentage of the profit would be much fairer). Before you start trading, we advise you to clearly understand the mechanism of profit generation.
Documentation
A broker is required to provide documents that describe its activities: a public offer (client agreement—a contract between the brokerage company and the client), a risk disclosure statement, and an Anti-Money Laundering (AML) policy explanation.