Forex Forums a form of Self-Regulation

While Forex trading itself is unregulated, Forex has a means of self-regulation for highly sophisticated investors, for those who are willing to do their homework. Work is required (in the form of time, reading, and understanding), and there is no vertical subordination, and no official authorities in this space. Admins monitor the discussion to make sure it’s focused on topic, but they don’t normally intervene in discussions (such as deleting posts they don’t like).

The forums do not provide any type of identification proofing, so there isn’t stopping anyone from spreading misinformation anonymously. For all the value they provide, and they do provide a unique critique service untouched by commercial interests, they seem to have an equally devastating counterbalance, the ‘rotten apple that spoils the bunch’.

The significance of the forums is they represent a powerful new force defining how information is exchanged among the investing public. Some investors may remember ‘investment clubs’ popular in the 80’s and 90’s. Now, investors can read forum posts without anyone ever knowing – comments, opinions, and some facts, are out there for all to see.

At the most recent TED conference, Gordon Brown quipped that:

"Foreign policy can never be the same again." The power of technology - such as blogs - meant that the world could no longer be run by "elites", Mr Brown said.

Policies must instead be formed by listening to the opinions of people "who are blogging and communicating with people around the world", he said .

This implicates a new user-driven de-centralized internet model will lead new paradigms, not the 20th century, centralized model. The current debate about regulation is all centered on a centralized government authorized regulator.

The problem with the centralized approach, with modern technology including the internet and modern government systems, a company can relocate its offices in a matter of hours in another legal jurisdiction. For example, after the NFA enacted rules affecting the way trades must be accounted for, such as the hedging rule and the FIFO rule , many Forex FCMs shifted their operations to London due to customer request . This was not to thumb the NFA for their rules, but in response to angry customer emails demanding they continue to allow hedging or they would simply move their accounts to London based firms who wouldn’t ban hedging anyway. It’s a conundrum of control, the more they squeeze the more customers will move overseas, or cease to exist (result is the same).

The internet has a downside – unsavory marketing groups can register ‘private’ domains which sell ‘sham’ products, competing with legitimate providers. For those who don’t know what to look for, the marketing sites can be deceptive and misleading. But since criminals usually don’t register with the police, there is little regulators can do.

In some cases, vigilante groups have sprung up with the sole purpose of having the scam sites shut down while providing a review service similar to consumer reports.