Forex Regulation and the BRICS
FOREX REGULATION
The
forex market is one of the most decentralized complex systems in global
economy with no central clearing house. In a bid to regulate the market
and prevent chaos, there are several organizations and bodies- both
governmental and independent that have been established throughout the
world to play a supervisory role.
These
regulatory bodies are responsible for ensuring that the conduct of
stock exchange firms is both ethical and fair. They also police them to
ensure that they comply with all the rules and regulations that promote
an open and competitive foreign exchange market.
Individual
forex regulators have jurisdiction in the countries or regions within
which they are based, but are also known to cooperate with one another
to pursue or arrest fraudulent activities that are committed in more
than one geographical location by the same perpetrators.
These
regulators play a big role in global economies by ensuring that all
players in the forex exchange industry are transparent in their business
operations, and meet the set financial standards such as; keeping
sufficient funds by stock exchange brokers so as to shield traders
against being swindled.
An example of
such a body is the Financial Conduct Authority that is based in the UK
and regulates, among other roles, companies registered under the Forex
Capital Markets LLC and FXCM Asia Limited.
THE BRICS
The
BRICS is an acronym that was coined to refer to the world’s top five
emerging economic giants. The nations have established a $100 billion
development bank with an aim of developing their economies, as well as
seeking to boost confidence among financial institutions so as to
attract more of them into the individual countries. This is set to pose a
great challenge to the International Monetary Fund (IMF).
The countries forming this block are listed below:
- Brazil- As the biggest economy in South America, it is one country whose global economic significance cannot be overlooked. It is a major exporter of energy as well as agricultural products in the world market. Also, driving this countries’ economic surge forward is its vibrant manufacturing and tourism sector that is expected to continue growing.
- Russia- It is a major exporter of oil commodities and has made giant strides in establishing a free market system. In the past decade, the GDP of Russia increased significantly; making it among the world’s top ten economies today.
- India- India’s economy is mainly driven by the billion dollar manufacturing sector and the services industries in recent time. The huge work force in India is highly educated, making it an attractive market for investors.
- China- This is the manufacturing capital of the world. It is the largest BRICS member not only by GDP but also by population. This has made it an attractive destination for western multinationals seeking highly skilled, cheap and large labor force.
- South Africa- Africa’s biggest economy is also poised to be a major global economic powerhouse in the coming decades. With vibrant mining, agricultural and tourism industries; it is a major player in global trade.
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