The financial regulatory environment is changing as Forex broker technology provider T4B outlines here. The company has recently developed two new innovative plugins for MT4 in which brokers operating in France and Japan can now implement addressing limited risk measures and reporting solutions.
In order to be compliant with new regulations, brokers need to implement a lot of adaptations, including the accommodation of new technologies. A lot of changes have been introduced by European regulators in order to mitigate risks of traders.
The new rules are mostly related to sales and marketing practices, like the introduction of Forex, Binary Options, and CFD advertising bans or prohibition of bonus programs offered by brokers.
However, some regulators also oblige brokers to incorporate changes in their operations. Among these measures, for example, the introduction of maximum leverage level, guaranteed negative balance protection or obligation to offer so-called limited risk accounts to investors.
For example, French regulator AMF now demands provision of limited risk accounts from all CFD brokers who want to operate in France.
This means that brokers should introduce special accounts, which require setting stop loss level before opening each position. Moreover, after opening the order, a trader shouldn’t have an opportunity to expand the level of initially set stop loss. However, the MetaTrader platform itself doesn’t have the capability to oblige investors to set SL for every trade, therefore brokers need to implement it whether with the help of own IT-department or outsource this task or even refuse to operate on the French market.
T4B kept an eye closely on recent regulations and developed a plugin that solves this problem. This plugin forbids opening orders without setting SL level and restricts its movement afterward. As a result, a trader determines his/her maximum possible loss when opens an order.
Therefore investors do not risk to lose more money than they deposited.
This is not the only solution developed by T4B in order to comply with regulatory requirements.
For example, some Forex regulators require very precise reporting from brokers. Among those is the Japanese Financial Services Agency (FSA). Instead of hiring additional employees responsible for drawing up these special reports, a broker can automate this process with the right technology. For this purpose, T4B developed a tool that generates daily reports for FSA with all the required trading information.
Likewise, as Forex is moving towards traders protection, Tools for Brokers designs solutions that help brokers to minimize risks of their investors even if it is not yet required by the corresponding regulator.
For example, a solution for implementing the dynamic marginal crediting system. This is a feature again not provided in the MT4 platform by default. Hence, a plugin that automatically decreases leverage with the growing volume of opened orders is a great finding for a modern broker.
Tools For Brokers is a one-stop Forex technology provider who knows the specifics of brokerage business and understands how to solve any business challenges a broker faces. Since 2009 T4B has helped more than 200 brokers to optimize processes, minimize risks and increase their revenues
For more information on Tools for Brokers click here.