ITALIAN FOREX BROKERS: RULES AND REGULATIONS

Regulation of the forex market in Italy is carried out by the Italian National
Commission for Companies and the Stock Exchange, known in Italian
as Commissione Nazionale per le Societ e la Borsa or CONSOB.

CONSOB has for a long time, had a hard line stance against investments it sees as
extremely high risk investments. This explains some of the harsh actions taken
against binary options brokers. However, we are glad to report that the same
actions and stance has not been taken by CONSOB against forex brokers in Italy. But
is it all good news?
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Status of Forex Trading in Italy

In the European context, the forex brokerage business in Italy is not as developed as
other countries with a more established presence in this market such as Germany.
Italys contribution to the forex brokerage business has paled into insignificance
over the years. Most Italian traders use forex brokers registered in other
jurisdictions in Europe rather than locally based brokerages.
The reasons for this are not far-fetched and can be attributed directly to the
emergence of the Euro as the single currency in the European Union, pushing other
currencies into the annals of history. The Italian local currency (the Lira) used to be
a force to be reckoned with before the emergence of the Euro. This allowed for
better homegrown conditions to be developed in the forex market business in Italy.
But once the single currency came to be the sole legal tender at the turn of the
century, Italian forex brokerages now had to compete against other European
markets where conditions for doing business were a lot more favourable than in the
local Italian market.
The recent economic woes facing the Italian economy, which have necessitated
bailout packages from the European Central Bank, have also not helped the
situation. With better trade conditions in other countries of the EU, the incentive for
forex brokers to continue to operate in Italy has been eroded.
This is not to say that there are no forex brokerages in Italy. There are a few
companies who have decided to hack it out in the tough business environment in
Italy. These forex brokerage companies are either locally based companies, or
companies which are actually branches of other bigger offshore brokerages which
have set up base in Italy.
Classification of Forex Brokerages in Italy
As we have identified earlier, one of the classes of forex brokerages operating in the
Italian market is the class of brokers which can be described as being homegrown.

Some of these companies operate their own proprietary platforms, while the rest
are white-label brokerages which are a customized brand based on the offering and
packaging of foreign companies. One of the white label companies operating in Italy
is Onasis IBC. This company is a forex and CFD trading company which is a whitelabel product of Swedbank, a Latvian company.
The company has developed specific products for the Italian clientele it has and has
tailored its product offering for the benefit of participants in the Italian forex market.
The Italian Lira became obsolete when Euro notes and coins were circulated with
effect from 2002, after being implemented in the year 1999.
The Italian Forex Market has been controlled by the European Central Bank which
was created independent of political influences from member nations of the EU.

The direct quotation for the currency pair, that is, ITL/EUR is specified at about
0.0005165 by the Italian Forex Market, where the Italian Lira is the base currency
and the Euro is the quote currency.
The bidding price that is reflected through the direct quotation conveys that
0.0005165 amount of the quote currency, that is, Euro is required to but a single
unit of the Italian Lira, which is the base currency. The Italian Forex Market functions
mainly in order to convert the Italian Lira to Euro, or vice versa.

EUR/ITL is fixed at around 1,936.27 by the Italian Forex Market, which is in fact the
indirect quotation for expressing the Italian currency with the Euro. Here, the base
currency is the Euro and the quote currency is the Italian Lira. The indirect quotation
expresses that the sale of a single unit of the base currency will in fact require the
payment of 1,936.27 worth in the quote currency.

The Italian Forex Market has not been performing well as a consequence of the
European Central Bank fixing the interest rate at a flat 4 percent. Burdened with
with increased loan payments, the raised rates of interest have added to the woes
of the Italians who are also pressurized with increasing prices of oil and increased
taxes.