BSP stands for Bangko Sentral ng Pilipinas, which is the local regulatory body for Forex brokers in the country. The Philippines are known as a developing market for broker companies, and the BSP makes sure that the locally registered brokers abide by rules and regulations.
About BSP
BSP is the central bank of the Philippines. It was established in 2003. The BSP keeps floating exchange rates according to supply and demand. One of its major roles is to ensure good, fair, and transparent conditions in the market. The exchange rates are determined on the basis of specific market reforms aimed at stimulating competitiveness and growth through price stability. We can see that the regulator works on good principles and tries its best to maintain an honest market which will attract traders and investors from around the world.
Understanding BSP Forex Rules
BSP regulated Forex brokers have to follow a very strict set of rules. These rules cover everything, from who is allowed to trade, how much they can trade, and under which conditions foreign currency trades can take place. A problem with understanding these rules is that not all of them apply directly to Forex brokers and they were not created with Forex brokers in mind. Instead, BSP regulations are intended to monitor any and all FX (foreign exchange) activities and, subsequently, Forex brokers also fall under their scope. The situation here is similar to many other online activities, where a wider regulation is applied to somewhat novel concept, and the basic ideas are transferred to this new environment in the best way possible. One of the things BSP insists on with all FX transactions is KYC. KYC, which stands for Know-Your-Customer, understands that all those getting involved with Forex trading will need to confirm their identity. This is done to prevent money laundering practices, something that many smaller countries have to struggle with. What this means for traders registered with BSP regulated Forex brokers is that you can expect to be asked to provide relevant documents, proving you are who you claim to be prior to making any trades or, more often, before you are allowed to make a withdrawal. The KYC procedure can be a painstaking experience sometimes, so you should be fully prepared for it before you invest your money with a Philippines Forex broker.
Creating Transparent and Fair Environment
While BSP can try its best to make their brokers conduct their business in a fair and transparent manner, there will always be those trying to bypass the rules. This is particularly emphasized in countries where general enforcement of rules and laws isn’t at the highest level. However, BSP regulated brokers do have to submit regular reports and they are responsible to the regulator, which adds a layer of protection for the traders. There isn’t such a thing as an absolute safety when dealing with the Forex market, but a regulator that puts in a serious effort certainly helps.
The Future of Trading: Top Forex Brokers in Philippines
As we’ve already said, the Philippines seem to be a promising location for, first of all, Forex broker companies, but also for traders. The market seems to be past poor regulation and loose conduct. Many international Forex broker companies established their seats in the Philippines for natives and for all other traders who would like to get a taste of the Forex thrill in Asia. To find a top Forex broker in the Philippines, traders and newcomers should run the basic research and subject themselves to the same procedure as in any other country. First of all, it is important to find a Forex broker who complies with the law and the strict regulations imposed by the regulator. We would kindly suggest finding a BSP licensed Forex broker who meets the high standards of the industry. A licensed broker gives you security in the highly volatile and risky market. You need a trustworthy and reliable broker who offers you legal protection in the event of any irregularities. Once you’ve been able to locate such a broker, conduct further due diligence, finding out about their history, options they offer, customer support, and their general attitude towards clients. It is always better to spend extra few days researching the broker then putting your money in and having regrets later. A special concern, even with the best Forex brokers in Philippines, will be their KYC procedures. Check them out beforehand and make sure you are fine with them. Ask what types of documents they require during the verification process and check if you can provide such documents. Failing to pass identity verification can cause you a lot of headache and could even lead to your money being trapped, which is something you most certainly want to avoid.
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Experience the Thrill of Asian Forex Market
At the end of the day, Philippine Forex brokers regulated by BSP work in the same way as those operating in the western world. They offer more or less the same platforms, and they also rely on governmental, independent regulatory bodies that monitor the business conduct of the Forex companies. The Forex industry has gradually developed in the Asian countries which sometimes offer better conditions to the broker companies (e.g. lower taxes, less bureaucracy, and easier registration, etc.) and that is one of the reasons why many European and American Forex brokers take their companies offshore and enjoy the benefits. Extremely popular destinations, besides the Philippines, are also Malaysia, Indonesia, China, India, etc. That is a reason more to register with a Philippine brokerage firm, given that you can register with a domestic company but simultaneously have access to the entire Asian market. The BSP, as a government organization, is eager to track down all illegal actions related to the Forex industry, and they keep the Forex business as clean as they possibly can.