Now that the UK is exiting the EU, Cyprus is becoming the most popular forex destination in Europe. We believe this is mainly due to the well-balanced financial regulation in this island country and the fact that it is a part of the European Union.
Forex brokers in Cyprus are referred to as Cypriot Investment Firms (CIFs) are required to meet a set of requirements and to adhere to certain rules, thus insuring the financial soundness and customer protection in the country. The governmental agency in charge of licensing and overseeing the activities of CIF is the Cyprus Securities and Exchange Commission (CySEC).
Advantages of doing business with a CySec regulated broker
Here are the main benefits of CySEC regulated brokers:
– Minimum Capital Requirement – CIFs must hold at least €730 000, which guarantees that the company is financially stable and has a serious long-term approach.
– Client Account Segregation – Whenever clients deposit money in their trading accounts, it is kept separate from the broker’s operating funds. Thus the clients’ money remains shielded in case of mishaps like a broker’s bankruptcy.
– Compensation Scheme – All brokers licensed in Cyprus are members of the Investor Compensation Fund, which may cover a maximum of 20,000 EUR per person in the event of broker insolvency.
– MiFID applies – Under the Markets in Financial Instruments Directive every CySEC-regulated investment company is entitled to offer its services to citizens of all EEA countries, without further hassle.
– Transaction reporting – Cypriot forex brokers are required to report their clients’ transactions on a regular basis. This requirement and other wide-ranging MiFID measures are designed to improve investor protection and promote market integrity and transparency.
The Leverage Cap & Negative Balance Protection
Speaking of MiFID and financial regulation on a European level, we have to mention another benefit of doing business with a CySEC-regulated broker, which is about to change. Until recently, there wasn’t a limitation on the maximum leverage provided by brokerages in Europe (except in Poland). Cypriot brokers were free to offer leverage of 1:500 or higher. As such high leverage can create immense levels of risk, which often prove to be devastating for unsophisticated clients, the European Securities and Markets Authority (ESMA) introduced a leverage cap of 1:30, which will take effect as of August 1, 2018.
That being said, the complete set of restrictions on the provision of contracts for differences (CFDs) to retail investors imposed by ESMA includes other measures, which protect the interests of traders. Most importantly, the EU regulator obliges all brokers to provide negative balance protection on a per account basis, which means that investors cannot lose more than they have deposited.
Below, you can find some of the best forex brokers, regulated in Cyprus.
EU brokers news
Last Friday the Cyprus-based CySEC, on the the world’s leading FX and CFDs regulators, issued a cautionary message acting as a warning
CySEC released an announcement in which it is clear that the regulator has fined one X Global Markets Ltd with €50 000
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CySEC, the renowned Cypriot regulator and FX license issuer, recently issued a warning against a list of brokers. These companies were offering
Earlier today CySEC issued warnings against investing in a list of brokers, particularly those that involve forex trading, as well as CFDs
CySEC announced an important piece of news that covers an extended European forex trading audience. According to the Cypriot watchdog, all Cypriot
Higher income customers will be able to trade major currency pairs with leverage as high as 1:50, while less affluent traders will
The European Commission fined Citigroup Inc., Royal Bank of Scotland Group Plc, JPMorgan Chase & Co., Barclays and MUFG Bank a total
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A successful operation of the low enforcement authorities in Austria, Germany, the Czech Republic and Bulgaria has led to the arrests of
The Cyprus Securities and Exchange Commission (‘CySEC’) added unregulated brokers World Trust Invest, Eurotrade Investments, and CoinOptions Trade to its warning list on
CySEC, the financial regulator in Cyprus, fined Instant Trading EU Ltd, owner of ForexMart, InstaForex and InvestCity, with 130 000 EUR for
The Cyprus Securities and Exchange Commission (CySEC) issued on Thursday two separate notices, warning about the license suspension of Atlas Capital Financial
The Cyprus Securities and Exchange Commission (CySEC) issued a notice on Thursday, warning that the license of forex and binary options broker