Pemaxx Review: 5 reasons to avoid this forex broker

Pemaxx Review: 5 reasons to avoid this forex broker



Pemaxx does not seem to be an up-and-running brokerage. This company does not seem to accept clients at the moment and does not allow you to access any sort of trading platform. No Terms and Conditions were provided, and we were barely able to learn anything about the trading conditions the broker offers. All in all, this seems like a fraudulent enterprise that is best avoided – trade with a legitimate broker instead.To get more news about pemaxx review, you can visit wikifx.com official website.

Pemaxx states that it is registered and regulated in Mauritius. The broker supposedly also has an office in Dubai. The FSC of Mauritius is far from the strictest financial regulator there is. Local brokers have to maintain a minimum capital of between €25 000 and €250 000 depending on the type of license they wish to obtain. Minimum capital requirements are much higher in stricter jurisdictions:
However, some sort of license is better than no license. The problem is that Pemaxx’s name and the license number they provided did not show up anywhere in the register of the FSC of Mauritius.

This means not only that we are dealing with an unregulated broker but also with an enterprise that was willing to lie about something as vital as its license.

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).