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Forex and CFD trading in the Netherlands is rather popular and as in most other EU countries – legal and well regulated.
The agency that controls the retail forex market and issues licenses to brokers is Autoriteit Financielle Markten (AFM) or the Netherlands Authority for the Financial Markets. Its responsibilities are very similar to that of the Securities and Exchange Commission (SEC) in the US and cover, among others, all financial products, including savings, investments, loans, insurance, and accounting.
The AFM is also responsible for the overall stability of the financial markets in the country, as well as the supervision of all market participants, who deal with savings, loans, investments, and insurance.
So basically AFM regulates everyone – from stock exchanges to retail forex and CFD brokers.
In addition, AFM is a member of the Committee of European Securities Regulators (CESR) and operates under the European Markets in Financial Instruments Directive (MiFID), which means that if a broker has an AFM license it will be able to provide services in all other EU countries, where forex trade is legal.
That same rule applies the other way around too – all brokers, regulated by other EU regulators such as the Cyprus Securities and Exchange Commission (CySEC) will be able to operate legally in the Netherlands after going through a formal passportization procedure.
In addition to the rules that are uniform throughout all EU countries under the MiFID Directive, AFM requires all licensed brokers to file regular reports, concerning their trading volumes, capital changes as well as the trading data of their clients.
Many of the other requirements Dutch brokers have to face are common throughout Europe. All licensed brokers must prove their financial stability by maintaining a minimum operational capital of 730 000 EUR. Bonuses and binary options are strictly banned. Client money must be kept in segregated bank accounts – this promotes transparency and proves that the broker would not be able to use your money for their own business purposes but also means that your funds will not be lost in case your broker becomes insolvent. Leverage restrictions are also an important element of the EU regulatory framework – according to those, brokers cannot offer leverage higher than 1:30 to retail clients. That is the ratio when it comes to trading forex majors, the least volatile asset. The maximum leverage for trading other assets is as follows:
- 1:20 for non-major currency pairs, gold, and major indices
- 1:10 for commodities other than gold and non-major equity indices
- 1:5 for individual equities
- 1:2 for cryptocurrencies
AFM falls under the political responsibility of the Dutch Ministry of Finance but operates as an autonomous administrative authority.
Brokers operating in the Netherlands accept payment with all standard credit or debit cards like VISA and MasterCard, bank wire, various e-wallets like Neteller and Skrill, as well as SOFORT – a real-time online banking payment service available to clients with bank accounts in the Netherlands, Germany, Austria and Belgium.
Forex news from the Netherlands
6 people arrested for stealing $27 mln crypto assets
In a joint operation with the Dutch police and Europol the UK law enforcement agencies have arrested 6 people in connection with
Dutch authorities ban binary options permanently
The Dutch Financial Markets Authority (AFM) announced that as of 19 April 2019 the CFD restrictions, adopted by the European Securities and