• What is Dubai DFSA?
• Why trade with a DFSA-regulated broker?
• DFSA Brokers Requirements and Regulation
• DFSA Customer Support Service
• List of Regulated Forex Brokers
• Conclusion on DFSA

Introduction to DFSA

What is Dubai DFSA?

The Dubai Financial Services Authority (DFSA) is an independent financial regulatory agency established in conjunction with the creation of the Dubai International Financial Centre (DIFC) in Dubai, United Arab Emirates (Read our article about UAE Brokers). The DIFC, established in 2004, was designed to facilitate an environment where the economy and finance could flourish under its own civil and commercial laws, serving as a prominent business hub for the Middle East. Given the region's conservative approach to business and governance, there was a need to establish an area where Sharia laws could be adhered to while accommodating global firms and entrepreneurs seeking to establish an international business presence.

• This strategic move has proven to be highly successful, with the DIFC experiencing remarkable growth and contributing to Dubai's overall development across various sectors. It is important to note that the DIFC operates separately from the UAE's federal Securities and Commodities Authority, which oversees the regulation of the entire UAE economy. However, within the DIFC, the DFSA ensures the implementation of regulatory standards on an international level.
• The DFSA's regulatory framework mandates financial firms operating within the DIFC to obtain financial service authorization. This requirement applies to a range of entities, including banks, brokers, trading dealers, asset managers, wealth managers, corporate financiers, and insurance companies. Companies established within the DIFC are permitted to have foreign ownership and are subject to a civil, commercial, and regulatory environment like the legislation in the United Kingdom. The DFSA operates a regime similar to the Markets in Financial Instruments Directive (MiFID) and provides protective measures that enable market participants to engage in professional market activities or, if endorsed, conduct retail business or trading.

Why Trade with a DFSA-regulated Broker?

Dubai holds a significant position in the financial world, serving as a major financial centre and attracting wealthy traders, investors, and businessmen. As an Islamic State, Dubai operates under Sharia laws, which also apply to business models and money management. Although Sharia laws are known for their strict nature, Dubai has made progress by allowing certain advancements that were previously unavailable. The option of foreign ownership in Dubai provides companies with favourable conditions such as low taxes and extensive business opportunities while experiencing minimal government interference.

So, what does this mean for Forex Brokers? Dubai has welcomed international investors, offering them the chance to establish businesses and gain access to some of the world's most affluent investors. Consequently, numerous brokerages have either set up branches or strengthened their presence in the region. However, there have been instances where companies have chosen not to acquire the necessary regulatory status to become authorized brokers in Dubai, thereby creating a trading environment according to their own preferences. This approach carries significant risks as it exposes traders to potentially fraudulent or scam operations, which unfortunately still exist in the Middle East, including Dubai.

• The Dubai Financial Services Authority (DFSA) is a reputable financial regulatory authority that aims to protect investors and maintain market integrity. By choosing a DFSA-regulated broker, you can have confidence in the broker's adherence to stringent regulatory standards and their commitment to safeguarding client funds.
• DFSA-regulated brokers must comply with international standards and best practices in the financial industry. This includes robust risk management procedures, transparent pricing, fair trading practices, and adequate capitalization, which contribute to a more secure and reliable trading environment.
• DFSA-regulated brokers are subject to regular audits, inspections, and ongoing supervision by the DFSA. This oversight ensures that brokers operate in a transparent manner, with accurate reporting and disclosure of information to clients. As a result, you can make more informed trading decisions and have confidence in the integrity of the market.
• In the event of any disputes or conflicts between traders and DFSA-regulated brokers, the DFSA provides a platform for fair and impartial resolution. This can help protect your rights as an investor and provide a recourse mechanism in case of any issues that may arise during your trading journey.
• DFSA-regulated brokers are required to meet certain capital adequacy requirements to ensure their financial stability. This helps to mitigate the risk of broker insolvency and provides additional assurance that your funds are held with a financially sound institution.

DFSA Brokers Requirements and Regulation

Let's take a closer look at the requirements for companies to become authorized DFSA brokers and how the regulatory authority aims to enhance professionalism and efficiency in the trading environment. The DFSA possesses the power to govern the activities and conduct of market participants, with a specific focus on brokers. Initially, when the DFSA began regulating the market, the emphasis was on professional clients, which influenced the requirements and operating model of the authority. However, as the number of retail investors grew significantly over the years, the DFSA made substantial changes to adapt the regulations accordingly. These changes included a requirement for companies to have over $1 million in liquid assets, excluding the local currency (UAE Dirham). If a company caters to retail clients, additional endorsements are necessary to ensure clear and transparent offerings, fostering fair competition and imposing restrictions on marketing or misrepresentation of facts.

• Naturally, the high requirements were not warmly received by brokers, resulting in many operating without proper authorization. Recognizing the risks associated with retail offerings and the growing demand, the DFSA implemented new requirements and introduced additional measures and controls. Recently, the application fee has varied depending on the financial service, ranging from $15,000 to $17,000. The accreditation process now focuses on assessing the essential skills and professionalism of staff and top management. Moreover, strict compliance is enforced regarding brokers' money management. It is imperative for companies to strictly segregate clients' funds and provide risk disclosure statements under the supervision of the respective regulatory body.
• The DFSA's regulatory framework shares similarities with that of the United States, particularly with the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC). This close alignment with international jurisdictions allows the DFSA to cooperate effectively. Brokers can choose to follow regulatory guidelines adopted by the United Kingdom, the United States, or Cyprus. However, the DFSA maintains certain trading restrictions, such as offering SWAP free accounts for Islamic traders in adherence to Sharia laws and implementing higher minimum margin requirements (ranging between 2% and 5%), thereby reducing potential leverage. Furthermore, regulated brokers are obligated to provide regular reports on audits and performance, maintain transaction records, and ensure compliance with DFSA guidelines. Failure to comply may result in fines, penalties, or even dismissal.
• Consequently, the implemented regulations and requirements highlight the DFSA's commitment to improving its services and positioning Dubai and the Middle East in the global trading and financial markets. In 2017, the DFSA conducted a review focused on financial crimes to identify areas that required improvement. The review highlighted the need for better analysis and management of money laundering risks, the application of robust systems and controls for transaction monitoring, and the implementation of stricter policies and procedures for client interactions. Based on these findings, the DFSA initiated several actions and increased its focus on financial compliance in line with international standards. The regulator emphasizes the importance of implementing efficient processes, actively participating in development initiatives, fostering internal procedural enhancements, and continuously improving requirements and making amendments when necessary.
• Additionally, the updates reveal that Dubai authorities have entered into an agreement with the Monetary Authority of Singapore (MAS) to foster cooperation and develop an environment conducive to the sustainable growth of financial services through technology. This agreement aims to promote innovation and the application of fintech solutions on a global scale between the two markets. In simple terms, this cooperation mechanism will facilitate business interactions, and encourage the adoption of cutting-edge technologies like digital payments, blockchain, and flexible platforms. The general trend indicates that international regulatory authorities from respected markets and jurisdictions are increasingly engaging in cooperation and joint planning to enhance overall financial stability and integrity across markets. Such collaborations foster long-term relationships between parties, provide a solid foundation of protective tools and measures for investors and traders, and promise further improvements in services.

Read more about DFSA and MAS agreement: https://www.dfsa.ae/news/dfsa-and-monetary-authority-singapore-sign-fintech-agreement

DFSA Customer Support Service

The DFSA regulated brokers surely do have a procedure to resolve client disputes, yet investors can go further and submit a complaint. With all regulatory guidelines, if a trader or investor believes in unfair trading experience with the broker, or reach out the fraudulent activity, violation of the laws they can file a complaint directly to the DFSA. The trader should describe what has accrued, provide evidence of events, attach documents if applicable and include details of the situation or another, while DFSA will investigate the case further.

Submit the complaint about DFSA broker or company: https://www.dfsa.ae/Consumer/Complaints

DFSA also gives direct input to the traders through the official website and served sources, to promote understanding of the financial market and necessity of regulation, with an aim to maintain confidence in the DIFC industry. The permanent support of DFSA allows one to check on the latest regulatory news, understand the basics of investing, provides guidelines on how to avoid frauds, as well as gives advice in order to resolve complaints or disputes.

The traders can also contact authority directly to verify or consult on supervised firm, as well to receive an answer to an appeared question. The DFSA online form: https://www.dfsa.ae/Contact-us/Supervised-Firm

List of Regulated Forex Brokers

As the fraudulent activity of forex brokerages and investment firms in Dubai still remains at the high level, the potential investor should stay attentive to common scam signals like unfamiliar calls with incredible opportunities or complex investment as well as not trust in everything said. And of course to avoid by any mean unlicensed or unregulated brokers.

In order to check on the company or another, which is the necessary step, the DFSA online listing carefully appears the forex broker license details and information, which is available on the DFSA Public Register.

In general, DFSA oversees over 600 entities and authorized hundreds of brokers, while also is responsible to regulate financial and ancillary services, supervise and enforce anti-money laundering (AML) and counter-terrorist financing (CTF) requirements applicable in the DIFC.          

In order to choose on the best broker or to check the company, you should also read DFSA Brokers Reviews and get updated information from the engaged traders and other participants. For instance, our website designed to assist in market data includes hundreds and growing of Regulated Brokers Reviews along with Brokers to Avoid, and other useful data (Read Why you should avoid brokers from Vanuatu).

Conclusion on DFSA

As Dubai investors face some problems and fall victims of numerous frauds due to a possibility to enable brokerage firms without DFSA regulation, it is advised to choose only those firms that hold the necessary operation license and are authorized. Important to mention, the issues appeared only with non-regulated firms operating in Dubai.

As Dubai Financial Services Authority ensures highest quality services to the customers through its strict regulation and constant, very promising improvement, high liquidity proposal, software quality and reliability, safety data and banking, as well as customer care standards. At instance the protection by the applicable laws usually available only with the DFSA regulated brokers. Therefore, DFSA truly helps Dubai and Middle East markets to progress in the industry and make the necessary steps in order to facilitate strong position and a transparent possibility of the international offering towards investors and traders.

• What is Belize FSC?
• Why not trade with an FSC-registered broker?
• FSC registration requirements and its “regulation”
• Is there a way to submit a complaint to FSC?
• List of Belize FSC Brokers
• Conclusion on Belize FSC

Introduction to Belize FSC

What is Belize FSC?

The financial services sector of Belize, in particular, international Forex and trading services companies, is a relative newcomer within the financial industry, yet recently expanded Belize economy to a world-recognized hub. The growing demand led to the establishment of Belize FSC, the regulatory body responsible for overseeing and regulating the financial services industry in Belize.

• Belize as an English-speaking country in the heart of Central America obtained its independence in 1981 and since then approaches to diversify its portfolio through various opportunities to international investors and for instance included an attractive offering to firms operating financial services.
• So what makes Belize an attaractive hub for Forex Broker is the possibility, which is based on the offshore concept allows investors to engage in a variety of activities, obtain official status, run brokerage accounts, operate trading services, commission arrangements, and other commercial transactions with lower requirements and lower costs too.
• While developing and through its enlargement of potential, many online forex brokers used a Belizean IBC as a perfect opportunity to run international brokerage service and make authorized financial transactions. Therefore, through its growing demand Belize established independent local authority with the purpose to carry out financial regulation responsibilities including licensing of financial market participants and exchanges, and the supervision of their activities itself. The International Financial Service Commission or IFSC Belize started its operation in 1999 as a government agency to protect the reputation of Belize as an offshore financial center.
• The FSC was initially known as the International Financial Services Commission (IFSC) but underwent a name change to the Financial Services Commission in line with the passage of the Securities Industry Act, 2021.
• Even though, FSC being a self-regulatory body operates through a set of international rules and is in charge of licensing all international financial service providers through a set of requirements designed to ensure compliance. In addition, FSC is powered to impose administrative sanctions and disciplinary penalties for brokerage or investment firms that come under the relevant Belize financial acts, nevertheless, the conditions offered by FSC are far from this strict rules like top-tier authorities provide, therefore can not provide the same level of customer protection alike (Read more about the Core Functions of FSC)

Is FSC Broker Safe or Scam?

In fact, we can say Brokers that are only FSC Belize regulated are safe enough, there is high risk to fall into Scams. Belize serves as a tax haven with strong privacy laws, while these laws legally protect the confidentiality of organization information, preventing disclosure to governmental agencies or other influential countries worldwide. The stringent privacy regulations, coupled with a zero tax regime for foreign income, create an appealing business environment conducive to enhancing profitability and maximizing financial outcomes for companies operating in the region, therefore there are so many Forex Brokers based in Belize.

• FSC promotes its role in identifying and addressing broker scams and unethical practices by companies making false claims. However, there are many concerns regarding the overall effectiveness of these efforts, since they are rather promoting than effective, and in fact many Scammers are operating through Belize
• While the FSC have some limitations in its sharpness or regulation, it still offers certain advantages compared to brokers operating without zero regulation. To enhance trader protection, the FSC publishes public warnings, notices, press releases, and other relevant information on its online platform, so is good at list to check those alerts too.
• The effectiveness of penalties imposed by the FSC in deterring fraudulent activities among FSC Forex brokers has been a subject of concern. The imposed penalties may not be sufficiently stringent to discourage such irregularities, leading to a perception that some brokers may escape significant consequences for their actions. See our list of offshore and Unregulated Broker to Avoid, or Read more about Why Trade with FCA UK Brokers which shows that protective measures taken by the UK regulations which are quite serious and sharp compared to very low provided by FSC.

Why not trade with an FSC-registered broker?

Due to the low setup requirements and limited transparency associated with Belize FSC, along with the perception that regulated companies may face less severe penalties for irregularities and lack features like fund segregation, negative balance protection, or compensation in case of insolvency, it is difficult to confidently assert the safety of FSC brokers. Although, there still can be found companies that offer high-quality trading services through their Belize entity

• Belize is a gorgeous tourist destination, while also tax heaven with a zero tax structure that established its own regulation for financial investment and Forex firms licensing due to high demand and necessity of regulation. Ever since Belize became a known offshore zone and Forex hub, as a destination, attracted thousands of brokerages seeking an opportunity to be legitimate firms, yet to skip complicated and costly establish procedures.
• Therefore, the development of a perfect business environment attracted numerous enthusiasts and made Belize an investor-friendly economy that enables business growth, however, those firms and individuals that are seeking an opportunity to enable easy fraud process were allured to Belize as well. Definitely, it’s a very profitable chance to open a brokerage firm in a destination that saves establishment costs and allows enjoying almost unlimited profits, yet from the perspective of the trader or a client it is necessary to choose Brokerage or Company that is reliable, and unfortunatelly Belize alone can not gurantee this demand

FSC Registration Requirements

So getting back to the point, why an offshore broker or investment firm is not a recommended option to any trader, let us look closely what are the requirements to become a licensed FSC company, also compared to top-tier Regulations like CFTC in US imposes:

• Setting up a Forex brokerage in Belize is known for its relatively low costs, making it an attractive option for brokers with limited initial capital. The minimum capital requirements are typically lower than the industry standard, and the regulatory system is often characterized as less stringent. This leniency allows brokers to operate with greater freedom in many financial markets, so can lead to petential frauds too
• First of all the firm should maintain its minimum operating capital depending on the service from $10,000 to $100,000, then pay an international financial service provider fee of $1,000 only! The annual license fee varies on various kinds of financial services that also include Forex, trading securities, derivatives, and financial instruments, while a fee is either $2,500, $5,000, or $25,000.
• Yet, if compared to reputable regulatory supervision, these rates are extremely low, while the costs of setting up are considered to be one of the lowest worldwide. Meaning, the company is not able to operate or guarantee the safest trading environment with such a lack of capital, which even more, brings uncertainty to brokers' performance.
• Moreover, there is no strict requirement for a company to segregate clients' funds from the company ones, a meaning broker can use a trader’s investment for their own purposes, like heavy advertising for example. The broker is not either shall establish a physical branch or office in a destination, while the directors and management would be only slightly checked in terms of their proficiency.
• In regards to audit and control of how the Forex broker or company operates, the FSC does not implement comprehensive reporting demand, so the company can easily hide its true nature of performance.
• Although FSC makes its best to regulate and restrict firms by imposing fines, most FSC brokers get out of unlikely situations quite easily, as fewer standards allow them to enjoy almost free operation in financial markets.

In comparison to trusted authorities in the EU, the US, or other jurisdictions, the regulated broker catered and demanded detailed commitment in regards to trader protection, while FSC companies still operate in an environment sufficiently to fraudulent activities.

Complaints and Trading Scams

While the main duties of the FSC about the provision of effective services and registration of international companies, and accepting complaints from foreign traders there are many limitations in place, and the complaint process is not so organized like FCA in UK via Ombudesmall Provides (See How to CompLain in FCA website). The trader should first contact his service provider and try to resolve an issue through the company, yet in case you are not satisfied with the handling result move further and contact the authority. The transfer of the complaint to FSC should include detailed data with information on the company complaining, as well as evidence documentation.

Submit a complaint by filling out the form on the website www.belizefsc.org.bz/complaints

Based on the findings, FSC may impose a statement to the company with a requirement for compensation. However, the FSC is not responsible for further compensation, therefore quite often the dishonest brokers disappeared or didn’t take stated action, as the authority can do nothing about it. This means, the trader will remain on his own to resolve the issue further and can only submit a case to the court for appeal.

List of Belize Forex Brokers:

About 50 Belize Forex Brokers were reviewed by us, in fact, most of them appeared in the list of Brokers to avoid as the implemented safety measures do not allow us to trust them. Thus we do not recommend trading with them and advise you to consider only those that hold additional licenses or are regulated by trusted jurisdictions. (Check Scope Markets)

• As for the Belize Trading Brokers we do not advise trading with solely Belize Regulated Brokers, as risks are very high. We strongly recommend conducting thorough research before engaging with any broker. It is crucial to carefully assess the broker's regulatory status, review their authorization claims, stay updated on relevant news, and consider the reputation of the broker by reading reviews and verifying their legitimate documentation.
• However, currently, there are international brokers that do hold multiple licenses, including FSC one, and are regulated by other respected jurisdictions, which allows them to deliver good environment for trading and offer services internationally. Therefore, is better to choose a broker and forex trading provider among existing testimonials and consider only those that are regulated. Check out our recent articles about FCA, or other serious authorities to see the difference between the implemented regulations. Sign in only with trustworthy brokers, such as FP Markets, HFM, or recommended brokers by the link.  

Besides, FSC provides by itself a list of licensed service providers are regularly update it through an official website and available for verification at all times. Check the list of licensed service providers on FSC website, see note from FSC below:

“Investors and other users are warned not to deal with any entity whose name does not appear on the list for the service or business in question. It should also be noted that under the laws of Belize, a separate license is required for each kind of service or activity.”

Conclusion on FSC Regulation

Forex trading witnessed thousands of scams and numerous malpractices that were taken by unethical brokers, while in fact the majority of them were indeed located in an offshore zone and known heavens with zero taxes. The most dishonest ones always seek the easiest way to establish an alleged legal firm, through a license that does not implement strict regulation or reporting.

• The fraudulent activities are carried out in a most sophisticated way and it’s been hard to detect where the offering coming from. Therefore, traders should always be aware of these firms that corrupted the image of Forex trading and trust only well-regulated brokers incorporated and heavily regulated by known authorities like the UK’s FCA, Australian ASIC, and similar.
• Considering the fact that FSC has not implemented the strictest standardization that may guarantee the trustable provision of Forex or trading service delivery, we do not recommend choosing among FSC companies. Although, a newly implemented increase of the capital requirement definitely assists in a further decrease of new suspicious brokerages establish and those firms that seeking an easy solution to skip regulation.