Forex Brokers
A foreign exchange broker is a financial intermediary who assists an investor in buying or selling foreign currency. Due to the large number of foreign currencies in the world and the volatile nature of the same, the buying and selling of foreign currencies is a very complicated business. A foreign exchange broker aids in the smooth working of the daily transactions executed in a foreign exchange trading platform.
Since forex markets have no central location or exchange, it is conducted on an as is basis. However due to the advent of the internet the ease with which a foreign exchange transactions can be executed has increased to a considerable extent. This has assisted the forex broker to provide online trading facilities to his clients and also to provide better and faster services. Also it has eliminated the need for a central location or exchange for forex trade.
In India a person or an entity can act as a forex broker only if he is authorized to do so by the authorities under the provisions of Foreign Exchange Management Act of India.
Thus only an Authorised Dealer can act as a forex broker. The main players in the Indian field are banks and financial institutions. But in the recent years a number of private forex brokers are also providing their services. Also there has been an increase in the number of non-banking financial institutions, hedge funds, private individuals and speculators.
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