EXCHANGE BROKERS
Forex brokers play a very important role in the foreign exchange markets. However the extent to which services of forex brokers are utilized depends on the tradition and practice prevailing at a particular forex market center. In India as per FEDAI guidelines the A Ds are free to deal directly among themselves without going through brokers. The forex brokers are not allowed to deal on their own account all over the world and also in India.
Banks seeking to trade display their bid and offer rates on their respective pages of Reuters screen, but these prices are indicative only. On inquiry from brokers they quote firm prices on telephone. In this way, the brokers can locate the most competitive buying and selling prices, and these prices are immediately broadcast to a large number of banks by means of hotlines / loudspeakers in the banks dealing room / contacts many dealing banks through calling assistants employed by the broking firm.
If any bank wants to respond to these prices thus made available, this is done by counterparty bank by clinching the deal. Brokers do not disclose counterparty bank's name until the buying and selling banks have concluded the deal. Once the deal is struck the broker exchange the names of the bank who has bought and who has sold. The brokers charge commission for the services rendered. In India broker's commission bas been fixed by FEDAI.
Forex brokers play a very important role in the foreign exchange markets. However the extent to which services of forex brokers are utilized depends on the tradition and practice prevailing at a particular forex market center. In India as per FEDAI guidelines the A Ds are free to deal directly among themselves without going through brokers. The forex brokers are not allowed to deal on their own account all over the world and also in India.
Banks seeking to trade display their bid and offer rates on their respective pages of Reuters screen, but these prices are indicative only. On inquiry from brokers they quote firm prices on telephone. In this way, the brokers can locate the most competitive buying and selling prices, and these prices are immediately broadcast to a large number of banks by means of hotlines / loudspeakers in the banks dealing room / contacts many dealing banks through calling assistants employed by the broking firm.
If any bank wants to respond to these prices thus made available, this is done by counterparty bank by clinching the deal. Brokers do not disclose counterparty bank's name until the buying and selling banks have concluded the deal. Once the deal is struck the broker exchange the names of the bank who has bought and who has sold. The brokers charge commission for the services rendered. In India broker's commission bas been fixed by FEDAI.