At a first glance, Esperio seems like a decent enough broker. The broker’s website looked good and provided comprehensive information about account types and trading conditions. Moreover, Esperio offers two great, highly functional trading platforms – MetaTrader 4 and MetaTrader 5. The broker’s legal documentation did not seem to contain any sort of shady clauses either.To get more news about esperio review, you can visit wikifx.com official website.
However, Esperio is far from squeaky clean. Despite all the good things we mentioned, we still cannot recommend this broker – at least at the present moment. The company behind the broker is an offshore one – which is far from a great starting point. Moreover, we stumbled upon a warning by a financial regulator that seems to believe that this broker is running some sort of a scam.
Esperio might turn out to be a decent enough offshore broker – or it might be an insolent scam that is well put together. We advise you to not take chances and choose a broker that has proven to be reliable instead.
The company behind Esperio, OFG Cap. Ltd, is registered in St. Vincent and the Grenadines. As we already stated, this is far from the best starting point. The financial regulator of this country only supervises the banking sector and does not monitor the activities of forex brokers at all. There are no laws and regulations in the sphere of forex trading, and brokers registered in St. Vincent and the Grenadines are not obligated to meet even the most basic of requirements. There are no transaction reporting requirements either – which means that money transferred to such offshore companies quickly becomes more or less untraceable. Because of these things, many scammers have chosen St. Vincent and the Grenadines as the base for their operations.
Not all brokers who are registered in St. Vincent and the Grenadines are scammers – some are perfectly legitimate brokers that are subdivisions of big, international brokerages. Such big companies usually want to avoid the stricter regulations that exist in Europe, Australia, and the US and offer more attractive conditions – but their offshore branches are just as reliable as the parent company itself. If a broker is not a part of such an international enterprise and is offshore by default, however, the likelihood of them running some sort of scam is big – so we would suggest that you are extremely careful with such companies.
What are the risks of dealing with unregulated brokers?
Anyone who deals with unregulated brokers like the one we are currently reviewing is taking a major risk with their money. These companies offer online trading services without any sort of a license and without any supervision on the part of the authorities – which makes them not only unreliable but dangerous for they are completely unaccountable for their actions. Most such entities are nothing but scammers who only seek to deceive their clients and swindle them out of their money. But even if such a company is not running a scam, it still cannot be trusted – for example, it could go under due to mismanagement, in which case its clients will lose their entire investment.
To avoid any such problems, turn to a legit and reliable broker that does everything by the book, and can provide you with significant assurances for the security of your funds.
Regulatory framework in the US
The US forex market is among the most heavily regulated ones. Brokers operating in the country should be members of the National Futures Association (NFA) and also be registered with the Commodity Futures Trading Commission (CFTC). They are required to meet a long list of requirements in order to make sure that these companies are transparent, well-capitalized and treat their clients fairly.
First of all, US brokers are subject to one of the highest capital requirements for financial services providers worldwide – they must maintain net capital of at least $20 million. Also, like all properly licensed brokers, those regulated in the US should keep clients’ funds segregated from their own operational funds to ensure that no commingling takes place.
Similarly to the situation in other countries, forex brokers in the USA face restrictions in terms of leverage – they are allowed to provide leverage up to 1:50 for majors and up to 1:20 for minor currencies. The leverage restrictions are introduced due to investor protection concerns.Another restriction US brokers are subjected to is the so-called FIFO (first in, first out) rule which prevents traders from going long and short on the same pair at the same time. Simply put, If you open more than one position on a currency pair, you must close the first before closing the second one.This also means that hedging is not allowed.
Finally, forex brokers legally operating in the States have to meet certain reporting requirements. In addition to the record-keeping and reporting guidelines introduced by the CFTC, they are required to provide their clients with access to certain transaction execution data (under the NFA’s rules on disclosure of transaction data).