Regulation (the "Legitimacy Test")

By far the most respected regulatory bodies are the US-based National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC). Most forex brokers, even if they are not based in the United States, are members of the NFA and registered Futures Commission Merchants (FCMs) with the CFTC. The UK based Financial Services Authority (FSA) is also a well respected regulating body, as is CySEC (Cyprus), ARIF (Switzerland), ASIC (Australia) and SFC (Hong Kong) among others. Just because a firm writes on their website that they are regulated however, does not make it so.