SIBA Forex Brokers and Regulations for the Seychelles

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Seychelles is an East-African country that is slowly gaining popularity in the retail Forex trading market. Seychelles provides numerous incentives for new companies to set up a financial brokerage in the nation, and the regulation of Forex brokers, as well as other financial entities, is carried out by the Seychelles International Business Authority (SIBA). The existing regulatory framework covers a wide variety of industries that aims to bring transparency into the Seychelles economy by supervising firms through a set of guidelines formed according to global regulatory standards.

Seychelles is committed to advertising itself as an attractive investment opportunity for international businesses by promising an excellent business environment that offers lower operational costs and a fast and easy administrative procedure. The lower tax structure along with a compliant regulatory system allows small companies to enjoy better returns through lower overhead costs. Although Seychelles may provide amazing benefits from a business perspective, the same cannot be said for traders as the lower regulatory standards of SIBA may deter professional traders from opening a trading account through SIBA regulated brokers.

Regardless, the country has slowly started modifying its regulatory framework to ensure that its regulatory structure is capable of invigorating trust and confidence among global retail traders. Under the reformed Financial Services Act of 2013, the SIBA has been renamed as the Financial Services Authority (FSA) of Seychelles to take care of regulating all non-banking financial companies operating in the country. Under the new regulatory protocols, the Seychelles Government hopes to eradicate the common perception of Seychelles being a tax haven and concentrates more on protecting the consumer, rather than the company.

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The Job Of Finding SIBA Regulated Forex Brokers

The FSA of Seychelles started regulating companies in the non-banking financial sector after its foundation in 2013 and is therefore considered as a newcomer in the Forex trading industry. lthough Seychelles is trying hard to attract new brokers to set up their brokerage in the country, most mainstream brokers are usually apprehensive about the idea of establishing a company in the African continent.

A majority of Forex brokers tend to move to the European Union, The US, Australia, and several parts of Asia for cashing in on the popularity of retail trading in those regions. Therefore, it is indeed difficult to find SIBA Forex brokers, unlike its European or Asian counterparts. However, there are a few SIBA regulated brokers in the industry that provides a high-quality FX brokerage service for traders who are looking for a safe and secure trading environment.

On the other hand, it is also plausible for traders to experience a fair share of broker scams or shady broker practices due to the relatively lower standards of regulation. Ultimately, Seychelles regulated brokers will find it hard to compete against brokers that are located in the established financial capitals of the world, and traders will also prefer to deal with known entities rather than taking a risk with unknown regulatory agencies.

What Are The Benefits Of SIBA In Forex Trading?

Since SIBA FX brokers do not enjoy a significant presence in the retail trading community, they usually adopt numerous strategies to attract investors from all over the world. Lower operational costs and a comparatively lower amount of tax helps these brokers to offer excellent trading products at a fraction of the cost. Therefore, SIBA regulated Forex brokers may be able to provider lower spreads, lower commissions, and lower fees of trading.

SIBA brokers are also known to offer huge deposit bonuses and other incentives to traders while opening and maintaining a trading account, which can include freebies, discounts, and cash prizes. Brokers from Seychelles also provide excellent commissions for affiliates who are willing to work with the company in acquiring new traders, which further provides incentives for existing clients to refer new traders and earn more money in return. Therefore, retail traders might find it beneficial to invest their money into a SIBA regulated Forex broker and enjoy the current promotions on offer.

Should I Switch To A SIBA Broker For The Rewards Alone?

Switching to a broker in Seychelles is dependent on the risk-appetite of a trader, and whether he/she is comfortable with risking their trading capital with an unknown Forex broker. Even though Seychelles may have excellent brokers operating out of the nation, the country is also known for a multitude of broker scams and to some extent, financial fraud.

Therefore, a trader should carefully analyze his options and perform thorough research before opting to trade with a specific broker. Traders with a larger trading capital always tend to stick to high-quality regulated brokers, typically from the US or Europe, since these agencies provide investor compensation programs that help traders to recover their trading capital in the event of broker insolvency or liquidity. The SIBA FCA is not particularly forthcoming about its policies regarding broker compensation or broker insolvency procedures, which might put off large-scale retail traders and institutional investors from opening a trading account with Seychelles Forex brokers.

However, smaller retail traders can indeed split up their investments and deposit their trading capital in different brokerage accounts, including at SIBA Forex brokers. Of course, this will not only help traders to lower their risk but can also help traders to enjoy the immediate benefits offered by SIBA regulated brokers.

SIBA And Its Regulation Policies

SIBA has adopted the global standards of broker regulation while supervising individual firms in the Seychelles economy. Brokers are required to submit audit reports, financial statements, statement of accounts, and other documents that help the SIBA FCA to stay on top of broker activities. Although the banking structure of the Seychelles is not as established as its European counterparts, brokers are free to hold accounts at international banks for added security of funds. However, when it comes to anti-money laundering rules, the Seychelles authorities are known to be highly proactive in ensuring that all of the companies based out of the country follow strict rules to prevent money laundering.

Tax havens are infamously known for their indulgence in money laundering activities. Therefore, the Seychelles authorities are deemed to be highly responsive when it comes to inhibiting companies from being associated with money laundering. SIBA FX brokers do have excellent trading packages that can enable traders to enjoy good trading conditions; however, most of the brokers in the region are prone to scandals and financial irregularities that diminish the amount of trust and confidence among established traders. New traders might find the trading conditions to be highly beneficial, but in the long term, SIBA has to get its act together to be considered as a reliable and authentic regulator in the Forex trading industry.

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