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Forex characteristics and Cysec

Michalaki, Pitsillidou Law Firm > English Articles  > Forex characteristics and Cysec

Forex characteristics and Cysec

Forex characteristics and Cysec

The foreign exchange market is a global decentralized market for the trading of currencies. This includes all aspects, of buying, selling and exchanging currencies at current or determined prices. The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multitude types of buyers and sellers around the clock. The foreign exchange market does not determine the relative values of different currencies, but sets the current market price of the value of one currency as demanded against another.

In a typical foreign exchange transaction, a party purchases some quantity of another currency. The modern foreign exchange market began forming during 1970s after three decades of government restrictions on foreign exchange transactions (the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states after World War II), when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of the following characteristics:

  1. its huge trading volume representing the largest asset class in the world leading to high liquidity
  2. its geographical dispersion
  3. its continuous operation: 24 hours a day except weekends
  4. the variety of factors that affect exchange rates
  5. the low margins of relative profit compared with other markets of fixed income and
  6. the use of leverage to enhance profit and loss margins and with respect to account size.

Because of Brexit adjuvants have set in order to protect the investors. Thus, in a European context there is an urgent to implement the updated European legislation, related the basic capital issues. For example, the new framework for investments services and the introduction of new investment tools.

In the recent years Cyprus Security Exchange Commission (CySEC) has enforced a regulatory framework to regulate Forex Companies. The existing framework and the fast procedures are attracting too many Forex companies who trust this framework.

 

For more information and guidance get in touch with our lawyers or email iMPK Global Business Law Firm – Cyprus Lawyers – Michalaki, Pitsillidou & Co. LLC, at info@impklawyers.com .Tel. +357 99345000 – Fax +357 25 660097.

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