Final words regarding the matter discussed here. These shall be proposed ethical standards for brokers.
1. Broker shall disclose publicly its beneficial owners. If a Broker is owned by physical person(s), it shall openly disclose its owner(s) name(s) and their citizenship. If a broker is owned by corporation(s), their name(s), registered address, and operating address shall be disclosed publicly.
2. Broker shall disclose both the registered address and operating address. If a broker uses virtual offices in another countries, but not actual operating addresses they shall be clearly defined as "virtual offices".
3. Broker shall disclose its liquidity providers and the type of relationship with them. For example: Liquidity provider "XYZ" according to contract/agreement No (certain number) from date (certain date).
4. If a broker executes trades on its behalf (acting as a market maker), it shall be clearly stated and the price relationship to the market prices duly explained. In such cases the broker shall state what is the maximum deviation from the market price allowed. In cases when a broker determines the execution price, all market conditions shall be regarded as normal as the broker is the only part on the execution.
5. Broker shall ensure data protection and inform the potential and current clients regarding the implemented safety level of data transmission and storage. Information about safety measures implemented for data protection shall be publicly available. The previous information shall contain a description of the theft prevention too.
6. Broker shall inform the client as soon as possible for any data theft and include short description of the reasons.
7. Broker shall ensure that ethical standards are followed by its employees and shall take measures to counter any breach of the same.
Most of us have read about the Belgian FSMA Regulation governing the distribution of certain derivative financial instruments (binary options, CFDs, etc.) (
http://www.fsma.be/en/Site/Repository/faq/faq_banning.aspx).
I am really glad to read that certain part of this discussion regarding Global Ethical Standards for Brokers has been confirmed by the FSMA Regulation!
Taking into account all the circumstances, I assume that only official regulators can enforce adherence to the standards discussed here.
Having said all of this, and referring to my initial post, I can say the following:
First: Global Ethical Standards for Brokers have to be adopted and fully integrated into regulatory requirements. This will prevent fake ethical verification.
Second: Procedures for Auditing against such Standards have to be implemented by the regulatory bodies of countries.
Third: Traders organizations similar or even the same as Forex Peace Army, should be unable and unauthorized to conduct audits. However, traders’ organizations might assist regulatory bodies. Hence, audits have to be made by the regulatory bodies, which subsequently to investigate and if needed to impose countermeasures for every unlawful actions.
Wish successful trading to everyone of you!