Trading in Holland with AFM Forex Brokers

Holland is an integral part of Netherlands, a country situated in Western Europe, and home to one of the most developed economies in the EU. There is a widespread misconception among the global population that refers to both Holland and Netherlands as the same country. However, one should only consider Holland as a part of Netherlands, and it is subject to the legislative laws and guidelines imposed by the Netherlands Government on all states and constituencies. The Dutch parliament is responsible for all of the administrative and legal aspects of the country as a whole. Netherlands is considered as one of the founding members of the European Union in its previous guises and is an active participant of the EU that contributes towards the overall development and sustained integrity of the European economy. All EU rules governing the standard code of conduct for businesses apply for firms operating in Netherlands, and the Dutch authorities work in tandem with several EU bodies for ensuring a safe and stable economy for both businesses as well as consumers.

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AFM Forex Brokers In Netherlands

afm-logoForex brokers in Holland (including the companies in Netherlands) are directly regulated by the AFM, (The Netherlands Authority for the Financial Markets), which is an independent regulatory organization that has been responsible for regulating and supervising financial entities in the Netherlands since March 2002. The AFM took over the duties of regulating financial firms from the Securities Board of the Netherlands to include more financial products ranging from investments, insurance, loans, payment systems, accounting, and even savings. Therefore, AFM is responsible for all banking as well as non-banking financial companies that operate in Holland, and the agency reports directly to the Ministry of Finance for regulatory supervision and guidelines. All financial markets, including Forex, commodities, stock exchanges, CFDs, futures, options, and other OTC products come under the direct supervision of the AFM. AFM regulated brokers should work according to the guidelines prescribed by the AFM under the Ministry of Finance framework, which requires regulated companies to promote transparency in the market and ensure stability in the markets. It is the duty of AFM regulated brokers to make it easy for investors to access the market without any barriers, but in doing so, businesses should not indulge in any fraudulent activities that may affect the smooth operations of the financial markets. AFM Forex brokers are required to induce confidence among traders while dealing with the highly volatile and immensely risky FX markets. Trust is a key factor for all Forex traders, as the industry is riddled with numerous broker scams and financial malpractices that have affected a majority of investors in the market. As a part of the EU and its regulatory structure, Forex brokers in Holland are regulated by the minimum regulatory guidelines imposed by the Committee of European Securities Regulators and the MiFID derivatives, which are supplemented with additional regulatory protocols enforced by the AFM. The AFM also works with several international regulatory organizations from across the world and is a prime member of the International Organization of Securities Commissions (IOSC). The IOSC brings together more than 80 different regulatory bodies from around the world to work on creating a standard organizational platform for financial companies. The AFM routinely updates its regulatory structure and the operational framework to include recommendations, updates, and regulatory procedures so as to bring the country’s regulatory guidelines in line with modern standards of supervision. Traders in Netherlands can be assured of the high quality of services while dealing with AFM regulated Forex brokers, which is indeed the top priority for every trader looking to invest in the FX markets.

Is AFM Responsible For Monetary Policies In Netherlands?

AFM is an autonomous agency that regulates firms according to the derivatives issued by the Ministry of Finance. The AFM has many responsibilities, which include authorizing and licensing financial institutions, including banks, but the AFM does not get involved with any monetary policies or make banking decisions on behalf of the Government. The AFM splits its responsibilities with the De Nederlandsche Bank (The Central Bank of Netherland), which is the prudential regulatory organization of the country that takes care of monetary policies and fiscal measures required for maintaining the stability of the Dutch economy. The AFM enjoys considerable authority and autonomy over its regulated members for ensuring transparency in the way financial companies do business in Netherlands. All European companies are required to adhere to the regulatory requirements, but the AFM has been granted complete autonomy by the Ministry of Finance to withdraw licenses, impose penalties, initiate criminal proceedings, sidetrack errant members, issue public warnings, award sanctions against members for unethical activities, and even cancel registrations. Due to the stringent regulatory supervision and close monitoring of the activities of all AFM Forex brokers, almost all regulated entities in Holland emulate safe conduct for continued support from the AFM.

How Does AFM Regulated Brokers Satisfy The Agency’s Regulatory Conditions?

AFM has a detailed regulatory structure that clearly establishes the ground rules for operating in the Dutch financial markets. Forex brokers in Netherlands are only allowed to offer their products and services to Dutch traders if they have an AFM license or a permit under the EU derivatives. All foreign brokers without a valid EU license will be barred from catering to Dutch investors, which essentially stipulates every company to receive a valid AFM license before commencing their operations in the country. As part of the AFM license requirements, AFM regulated brokers should submit periodic financial statements and audit reports to the AFM, which allows the organization to monitor the financial activities of a regulated member to ensure that the company does not indulge in any fraudulent activities. The AFM is also very strict on the matter of operating capital, as brokers should hold their operating capital in separate accounts, well away from their clients’ funds. Apart from keeping client money in segregated accounts, AFM Forex brokers should also inform the organization about the changes in issued capital, if the overall operating volume of the company changes by more than 1% within the span of three months. The stringent operating guidelines certainly serve as a huge incentive for traders, both in Holland as well as across the EU, as they can enjoy better security and improved trading conditions without every distressing about the potential of any financial scams or broker irregularities. AFM has an excellent online registry that allows traders to search for regulated companies and verify the authenticity of information before choosing their services. AFM also issues public notices, warnings, and newsletters about the financial industry, which is a great resource for staying abreast of the latest scams and financial misconducts. Consumers may also approach to the AFM for complaints, problem resolution, arbitration, or if everything else fails, seek help from the court. AFM also provides avenues for notifying the AFM with regards to the conduct of an organization, and the whistleblower program can be used to great effect to ensure that the AFM is provided timely information on all derelictions perpetrated by regulated members.