You can find brokerages which also a licensed bank. Can it be beneficial for someone to work with this kind of brokerage?

There are many factors to be considered when choosing Forex brokerage firms. This happens due to the availability of different Forex brokers in the market who are willing to accept your registration. In the market, you will find stand alone Forex brokers and those which are also licensed banks. In the beginning, it was the role of the commercial banks to provide the foreign exchange services in the market. However, due to the development in the industry, now there are several Forex brokers which are not operating as banks. It is a good idea to deal with licensed banks as your Forex broker. There are many benefits of choosing Forex brokerage firms which are also operating as licensed bank. Below are some of the benefits to a Forex trader


As you know there is regulatory requirement for every Forex broker. Forex just like any other financial markets should be regulated to keep off fraudsters and illegal operators. Although this is a primary requirement for all Forex brokers, it is not surprising to find brokers operating in the market but not registered with any regulatory body. This puts the trader at bigger risks of losing his investments. Besides, there is no protection of the traders’ goals and interests. Choosing a Forex broker that is also a licensed bank lets you benefits from outstanding regulation. Banks are the best regulated financial institutions.

Low exposure to risk

This is a subsidiary benefit to the intensive regulations that licensed banks undergo through. When dealing with a well established licensed bank, there are minimal chances that your investment will be under greater risks. Although there are chances of involving in unethical, fraudulent and illegal activities, their chances are very minimal. This gives you the ultimate peace of mind needed whenever trading.

Accuracy and transparency

Forex brokers which are not licensed bank always partner with banks to provide the service to their clients. First, they keep funds with these banks. Such Forex brokers get trade quotes from the bank before relaying them to the trader. This creates allowance for broker to interfere with quotes. The Forex broker can thus decide to alter quotes to favour them. They can also hold the quotes until they get good grounds in the market. This subsequently lowers the profitability of the trader.

Low fees and commissions

Dealing with a Forex brokerage firm which is not a licensed bank often proves to be very expensive and less profitable. This is due to the high commissions and fees involved. Because you will be dealing with a third party, the fees and commission must be increased: you pay for the service of the broker and the bank that it uses. The commission and fees are increased: you are required to pay for the services of the bank and the broker. On the other hand, you will be dealing directly with the bank without the need of intermediary- the Forex broker.


It is a good idea to choose Forex broker which is also a licensed bank. There are many other benefits that a Forex trader will enjoy. Apart from what is discussed above, you will enjoy trading in the Forex market. If you want to reduce the level of risks involved marginally, this is the right decision to make. Lastly, a bank is very reliable and will provide every tool you need to realize your investment goals.

Author's Bio: 

There are various benefits of working with a brokerage that also an accredited bank. Look into the information of a brokerage that also a licensed bank with big liquidity on Dukascopy forex broker. Curious to participate in currency trading but still have doubts? Read forex scam for the truth about forex industry.