Association Of Futures Brokers And Dealers – Definition
The Association of Futures Brokers and Dealers was a professional organization that major London futures exchanges established to be able to offer regulatory supervision for dealers, brokers, including other practitioners in the industry. In other words, the organization was self-regulated, created to oversee the options and dealers in futures activities.
A Little More on What is the Association Of Futures Brokers And Dealers – AFBD
The AFBD was a self-regulating organization during its establishment in 1984. It was later absorbed into the Securities Association in 1991, forming the United Kingdom’s Securities and Futures Authority, also known as SFA.
The SFA had the obligation of developing and maintaining standard rules of capital requirements and fair practice for those firms active in the futures, options, and securities markets. The dealers and brokers of futures exchanges were required to adhere to these rules.
In 2001, Securities and Investment were renamed after the FSA launching. After its launching, FSA took over the SFA roles.
In 2010, the Securities and Futures Authority was abolished when the Exchequer’s Chancellor George Osborne announced its elimination. Its duties were then delegated to the newly founded Financial Conduct Authority (FCA) and other agencies, including the Bank of England.
Note that FCA is currently the one in charge of conducting regulation for more than 58,000 financial markets and financial services firms across the United Kingdom. It is also the prudential regulator covering more than 18,000 firms.
Prudential regulator is under the ownership of the Bank of England, and it develops rules that financial firms are required to adhere to. Some of the regulatory rules require financial firms to have enough risk controls and sufficient capital.
What is the Current Regulation of Futures Brokers and Dealers?
Today the majority of firms of the futures are regulated by the Financial Conduct Authority. The FCA agency gives warnings, for example, against particular brokers, who are seen to pose possible risks to investors.
FCA continues to maintain a Financial Services Register. The register permits consumers to make sure that dealers in specific futures have authorization from the agency to carry out their services.
In addition, FCA ensures that it maintains a helpline for verification. The helpline aids in verifying the authenticity of firms approaching consumers for services so that people don’t fall victim to a scam.
Generally, it is the duty of FCA to ensure that there is honesty, effectiveness, and fairness in the financial markets, to ensure that consumers access fair deals. It ensures that markets work effectively for both businesses and individuals, large and small, to benefit from the general economy.
Reference for “Association Of Futures Brokers And Dealers – AFBD”
Academics research on “Association Of Futures Brokers And Dealers – AFBD”
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Governing global finance: financial derivatives, liberal states, and transformative capacity, Coleman, W. D. (2003). Governing global finance: financial derivatives, liberal states, and transformative capacity. CAMBRIDGE STUDIES IN INTERNATIONAL RELATIONS, 86, 271-292.
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Regulation of futures trading in the United States and the United Kingdom, Anderson, R. W. (1986). Regulation of futures trading in the United States and the United Kingdom. Oxford Review of Economic Policy, 2(4), 41-57.