HCMC Forex Brokers & Regulations in Greece

Greece has been in the news over the past decade for to its economic turmoil and subsequent bailout efforts from the EU. Greece is not entirely familiar in the Forex trading industry for setting up a brokerage, but the country is known to produce some of the most reputed and industry-leading Forex brokerages in the entire world. Forex brokers in Greece are regulated by the HCMC, which is the primary regulator for the securities market and OTC products. Forex and CFD trading have taken a huge hit in the country due to the several measures and policies introduced by the Government to satisfy the conditions put forward by the EU.

The Hellenic Capital Market Commission (HCMC) is one among the different regulatory authorities in the Greek capital markets. Apart from regulating the different companies and individuals that are an integral part of the Greek stock exchanges, HCMC regulated brokers are also allowed to offer Forex and other CFD products, subject to the terms and conditions issued by the HCMC and the Greek authorities. Regardless of the impact of the financial crisis on the Greek economy, HCMC Forex brokers in Greece are largely unaffected due to the niche sector that comprises of institutional and retail FX investors. Being a part of the EU, Forex brokers under the MiFID derivative can provide their services to EU Forex traders, and Forex brokers in Greece can also cater to international clients through the European Economic Area (EEA) agreement.

Therefore, most international Forex brokers offering their services to Greek FX traders are relatively safe against the market volatility, which should provide safety for most traders in the EU. HCMC has introduced several capital control rules for financial companies as part of the banking reforms introduced by the Greek Parliament. HDMC regulated brokers are required to choose a Greek bank as the custodian of all funds, including the broker’s operating capital as well as client funds. New capital control measures restrict brokers or financial firms from accessing their funds freely, which should, in theory, limit the amount of freedom available to traders and brokers. On the contrary, most Forex brokers in Greece have been able to meet their obligations without making any significant compromises, which is indeed considered to be excellent news from an investor’s perspective.

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Regulatory Compliance For HCMC Forex Brokers As A Result Of Financial Crisis

HCMC is one of the oldest financial regulatory organizations in the world that was formed as early as 1927. Regardless of the economic turmoil that affects Greece in the present era, Greece had an illustrious history in the global markets. Greece was once considered to be the most advanced civilization in the world, and the introduction of the HCMC in the early part of the 20th century was seen as a modern initiative by the global economy.

Although the HCMC has an extensive history, there wasn’t any serious regulatory framework that could help the Greek Government to impose restrictions on the way financial companies operate in the country. It wasn’t until 2000 that the HCMC started introducing various laws and policies to ensure that HCMC regulated brokers and other corporate firms started following a standard code of conduct for protecting the integrity of the markets. The HCMC introduced newer reforms over the years until the instability of the global financial markets and the subsequent economic meltdown of 2008 induced a significant financial crisis in Greece in 2010.

It is believed that the 2010 Greek financial crisis is the largest economic downturns in recent past, which has created a significant ripple in the European economy as well as the global financial markets. Several industry experts and large organizations claimed the inefficiency of the Central Bank of Greece and other regulatory organizations to be a major downfall that aided the decline of the Greek economy. Nevertheless, the future of HCMC Forex brokers looks bright in light of the recent reformatory guidelines and the intervention of the EU on the performance and oversight of financial companies operating in the Greek financial system.

What Is The Role Of HCMC On Regulating Forex Brokers In Greece?

HCMC is an independent self-regulatory organization that uses the funds raised through membership fees, penalties, and other levies for its operational expenses. HCMC does not use state funds for any part of its operations, which reduces the burden on the Government for maintaining the regulatory agency in the market.

Being a self-sustaining regulatory organization, the HCMC has complete authority over the regulated members for supervising companies according to the HCMC regulatory guidelines and the legal framework as issued by the relevant authorities. HCMC regulated brokers and companies contain firms from a broad range of financial sectors, which include portfolio management companies, real estate investment companies, portfolio management firms, mutual fund management companies, investment companies, hedge funds, stock brokers, and other participants of the Athens Stock Exchange. Every company listed on the Athens stock exchange comes directly under the supervision of the HCMC and are accountable to the HCMC for their conduct in the market.

The HCMC was instrumental in stemming a total collapse in the Athens stock exchange by banning the concept of short selling of shares during the financial meltdown of 2010, and the rule was upheld for 60 days before the commission restored market order. Several proactive measures by the HCMC had helped the Greek economy to hold its stead to weather out financial volatility. Nevertheless, as an independent agency responsible for supervision of non-banking financial firms in Greece, HCMC was certainly not singled out as an organization that was responsible for the economic crash, which should provide solace for Forex traders and investors trading with HCMC regulated Forex brokers. HCMC has imposed fines and penalties on companies for non-compliance with rules and regulations imposed on its member firms; however, industry experts and several member firms claim the HCMC to possess a regulatory framework that lacks clarity in its structure.

The lack of uniformity in rules has certainly hindered the ability of companies to receive a clear-cut idea about the existing guidelines issued by the HCMC on financial companies, which should be rectified by the HCMC if it plans to make a significant impact on the retail FX trading market.

Are Greek FX Traders Free To Choose Overseas Forex Brokers?

Overseas brokers are banned from offering their services to Forex traders from Greece; unless such brokers originate from the EU and are regulated by a MiFID approved regulatory organization. Greece does not allow any broker to offer online access to its citizens either through affiliates or introducing brokers, a rule which is designed to eliminate broker scams emanating from countries with a lower regulatory regime. Regardless, Greek investors are free to choose any international Forex broker regulated by HCMC through its branch office, or through any allied regulatory agencies in Europe under the MiFID derivative.

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