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The Cyprus Securities and Exchange Commission (CySEC) is the financial regulator of the Mediterranean island of Cyprus. Central to CySEC’s regulatory policies are segregated bank accounts for client funds, insurance coverage against broker negligence, a compensation scheme of up to €20,000 per account, and a strict capital adequacy ratio requirement to prevent brokers from defaulting because of client’s trades. 

To test these brokers, we verified our live account and reviewed their CySEC regulatory status and complaints history. Beyond confirming the platform choice, minimum deposit, and trading desk type, our test focused on trading conditions, the overall trading cost for clients, withdrawal fees and other fee structures, so traders understand all costs associated with using any specific broker. These are the best CySEC regulated brokers for 2021 according to our testing and our research.

Best CySEC Regulated Brokers 2021

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Broker
Overall Rating
Official Site
CySEC License
Min. Deposit
Max. Leverage
Beginner Friendly
EUR/USD - Standard Spread
Cost of Trading
EUR/USD - Raw Spread
Total CFDs
Currency Pairs
Platforms
Compare
FP Markets
4.28 /5
Read Review
Visit Broker >
Your capital is at risk
371/18
AUD 100
30:1
Excellent
0.10 pips
USD 7
0.10 pips
10084
60
IRESS
Pepperstone
4.61 /5
Read Review
Visit Broker >
Your capital is at risk
388/20
AUD 100
30:1
Excellent
0.69 pips
USD 6.90
0.09 pips
1019
60
Markets.com
4.49 /5
Read Review
Visit Broker >
Your capital is at risk
092/08
AUD 100
30:1
Excellent
0.70 pips
USD 7
0.60 pips
2235
67
eToro
3.69 /5
Read Review
Visit Broker >
67% of retail CFD accounts lose money
109/10
AUD 50
30:1
Standard
1.00 pips
USD 10
1.00 pips
2454
60
etoro
FXCM
4.24 /5
Read Review
Visit Broker >
Your capital is at risk
392/20
AUD 50
30:1
Standard
1.30 pips
USD 13
1.30 pips
306
45
NinjaTrader
TradeStation
easyMarkets
3.98 /5
Read Review
Visit Broker >
Your capital is at risk
079/07
AUD 200
30:1
Standard
2.00 pips
USD 20
0.70 pips
211
103
Capital.com
4.68 /5
Read Review
Visit Broker >
Your capital is at risk
319/17
AUD 20
30:1
Excellent
0.60 pips
USD 6
0.60 pips
4027
137
Capital.com
Tickmill
4.48 /5
Read Review
Visit Broker >
Your capital is at risk
278/15
AUD 100
500:1
Excellent
0.00 pips
USD 4
0.10 pips
91
62

How to compare CySEC regulated brokers

CySEC is a tier 2 financial regulatory agency from Europe. They are a modern and well-funded organization and often the first to make regulatory changes needed to protect would-be traders and maintain fairness in the CFD industry. Generally speaking, CySEC-regulated brokers can be considered safe. Still, some few CySEC-regulated brokers have a history of controversy, and the regulator has only taken limited action on behalf of clients and partners. But it is essential to look at the detail of each broker to find out what differentiates them from each other. When comparing CySEC regulated brokers consider:

Regulation: While your broker is CySEC regulated, your trading account may not be. It is increasingly common for CySEC regulated brokers to onboard clients onto a different license where trading conditions, like leverage, can be increased without the CySEC oversight. While this is not fundamentally bad, the trader should know their trading account is regulated and that CySEC will not enforce their regulations in overseas territories. If you value the regulatory oversight of CySEC, don’t trade that for adjusted trading conditions.

Platform choice: Traders have a wide range of industry platforms to choose from, each with pros and cons. When comparing brokers, always consider the platform options, as unique features or a wide variety of platforms could change your trading experience. 

Trading costs: Every broker will charge for their services, but each will have different pricing models and costs. While ECN brokers will charge a smaller spread combined with a commission based on volume, market maker brokers will charge a wider spread. We compare brokers by looking at what 1 lot of EURUSD costs to trade and would encourage traders to do the same in comparing costs. 

MetaTrader 4 is still the industry standard, but many brokers offer MetaTrader 5 and their proprietary platforms. ECN/STP brokers will often support cTrader as it is built specifically for market execution and only allows for minimal broker interference.

Minimum Deposit: The minimum deposit could change by account type, with higher minimum deposits often linked to better conditions. Always consider the minimum deposit specific to the account type you may open. 

Deposit and Withdrawal Methods: Most brokers accept credit cards and bank transfer payment, and many accept online payments through Skrill and Neteller, and some will also accept Bitcoin. Always check the withdrawal fees before making a deposit. 


FP Markets – Best MetaTrader Execution

FP Markets is a leading CySEC-regulated CFD broker offering trading on both the MT4, MT5, and IRESS trading platforms.  In addition to providing super-fast execution speeds over a dedicated fibre-optic line, it offers versions of the platforms for alternate operating systems, including Mac OS and WebTrader.  Traders also have access to institutional-grade liquidity from multiple execution venues, with no price manipulation, no dealing desk intervention, and no requotes or rejections.

Trading conditions at FP Markets are generally excellent, with tighter than average spreads on two live accounts.  The commission-free Standard Account offers spreads starting at 1.0 pips on the EUR/USD and spreads as tight as 0 pips (EUR/USD) on its Raw Account in exchange for a commission of 6 USD (round turn) per lot. 

Pros
  • Well regulated
  • Tight spreads
  • Good range of accounts
  • Great customer support
Cons
  • Expensive withdrawals
AlertAccepts Australian Clients. Average spread EUR/USD 0.10 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & IRESS platforms supported. FP Markets is regulated by CySEC and ASIC.

Pepperstone – Best ECN CFD Broker

Pepperstone is a leading CySEC regulated ECN/STP broker offering trading on over 180 assets, including Forex, indices, shares, commodities, cryptocurrencies, and currency indices.  Pepperstone offers full support for the MT4, MT5, and cTrader platforms which provides high-speed execution and low latency trading.

Pepperstone’s trading conditions are among the most competitive in the industry.  /with two live accounts on offer, a Standard commission-free account with spreads averaging at 1.09 pips on the EUR/USD, and a Razor Account with spreads that average at 0.09 pips in exchange for a reasonable commission of 7 USD (round turn) per trade.  Pepperstone also provides award-winning customer service, available 24/7, and an excellent educational repository, making it a good choice for beginner traders. 

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts Australian Clients. Average spread EUR/USD 0.69 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA.

Markets.com – Most Tradable Instruments

Founded in 2010, Markets.com is a part of the Playtech Group, a global technology leader that is traded on the London Stock Exchange, and a constituent of the FTSE 250 index.  Regulated by CySEC, Markets.com, trading is offered on over 2,200 instruments, including 67 major, minor, and exotic FX pairs, stocks, over 41 major market indices, 27 commodities, six cryptocurrencies, 60 ETFs, and 4 government bonds.   Traders will also have access to 23 of Markets.com’s exclusive blends, which are stock baskets that give traders exposure to industry-leading companies, investors, and geopolitical events. 

Trading is offered on MT4, MT5, and the innovative Marketsx app, which is packed full of features and trading tools and is optimised for lightning-fast execution. It also has built-in advanced charting including trendlines, channels, pitchforks, Fibonacci Retracements, and more.   Lastly, Markets.com provides a wealth of support including sentiment tools, tutorials, and regular expert-led webinars. 

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Fast and free withdrawals
Cons
  • High minimum deposit
AlertAccepts Australian Clients. Average spread EUR/USD 0.70 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, and Marketsx platforms supported. Markets.com is regulated by the FCA, CySEC, ASIC, and the BVI FSC.

eToro – Best Social Trading Platform

A market maker, eToro is a CySEC-regulated broker offering trading on multiple assets, including Forex, stocks, commodities, ETFs, indices, and over 96 cryptocurrency pairs – one of the largest sets in the industry.  eToro is popular for its unique crowd trading platform which allows clients to follow expert traders and market strategies.  The innovative trading platform is designed for both web browsers and mobile devices, making the trading experience smooth and simple. 

eToro offers one commission-free live account with floating spreads starting at 1.0 pips on the EUR/USD, which is in line with other market makers.  While eToro’s platform does not offer the sophistication and features available on the MT4/MT5 or cTrader, it makes both social trading and copy trading an easy process. 

Pros
  • Well regulated
  • Good for beginners
  • Innovative trading tools
Cons
  • Limited education
  • Wide spreads
AlertAccepts Australian Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. Only eToro proprietary trading platform supported. eToro is regulated by CySEC, FCA, and ASIC.

FXCM – Best Proprietary Platform

A CySEC-regulated broker, FXCM offers support for a wide range of platforms, including MT4 and Ninja Trader in addition to its award-winning proprietary platform, Trading Station.  The features of Trading Station are similar to MT4, including Expert Advisor integration, custom indicators, strategy optimisation, strategy backtesting, and advanced charting, but it requires less setup and is easier to use. 

FXCM offers commission-free trading and a simple account structure for retail traders.  The minimum deposit for a live account is 50 USD, and leverage is up to 30:1.  Spreads average at 1.3 pips on the EUR/USD, which is wider than other market maker brokers, but it allows all trading strategies, including hedging, scalping, and copy-trading. 

Pros
  • Well regulated
  • Great platform choice
  • Excellent education
  • Innovative trading tools
Cons
  • Limited demo account
AlertAccepts Australian Clients. Average spread EUR/USD 1.30 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & Ninja Trader platforms supported. FXCM is regulated by FCA, ASIC, and the FSCA.

easyMarkets – Best Risk Management Tools

A CySEC-regulated market maker broker with no dealing desk intervention, easyMarkets is one of the most innovative brokers in the industry.  easyMarkets was the first broker to introduce negative balance protection and guaranteed stop-loss. 

The easyMarkets trading platform provides unique, innovative, and advanced trading features that help traders reduce their losses. These features include easyTrade, which allows traders to set the maximum amount they are comfortable risking, dealCancellation, which allows traders to cancel unfavourable trades within one, three, or six hours after a trade is executed, and Freeze Rate, a unique tool allowing traders to freeze the prices they see. 

Pros
  • Well regulated
  • Wide range of assets
  • Innovative trading tools
Cons
  • Limited platform choice
  • Limited account options
AlertAccepts Australian Clients. Average spread EUR/USD 2.00 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & the proprietary easyMarkets platform are supported. easyMarkets is regulated by CySEC, ASIC, and the FSA in Seychelles.

Broker Regulation and Why it’s Important

There are few genuinely strong regulators in the world; the UK’s Financial Conduct Authority is one, the Australian Securities and Investments Commission is another, and most would agree that CySEC is also a member of this group. After a shaky start as a regular, in recent years CySEC has built a reputation for guaranteeing trader security and dealing harshly with bad brokers, especially since the tightening of ESMA restrictions across the EU. We will talk about those restrictions in more detail below, but first, let’s look at the current benefits of trading with a CySEC-regulated broker.

  • Segregated Funds: All trader funds are kept in a segregated trust account which the broker cannot access. This prevents the broker from using trader funds for operational purposes. It also ensures that in the case of broker bankruptcy, trader funds can be refunded.
  • Capital Adequacy: CySEC requires all regulated brokers to hold enough capital to meet the capital adequacy ratio requirement. This decreases the likelihood of broker failure in the event of significant losses.
  • Reports and Auditing: Because brokers are required to submit regular financial compliance reports to CySEC, it is very difficult for brokers to hide any wrongdoing. Similarly, because these brokers are also subject to independent audits and visits from CySEC investigators, any wrongdoing will be exposed.
  • Compensation Fund: All CySEC-regulated brokers are required to join the Investor Compensation Fund Scheme. Under this scheme, traders are liable for compensation up to 20,000 EUR in the case of broker bankruptcy.
  • Insurance Coverage: CySEC demands that all licenced brokers maintain insurance coverage of at least 1.5 million EUR for losses resulting from negligence.
  • Transparency: CySEC expects to have a complete overview of all products that a broker is planning to offer, and that these products are the same as the products provided to clients.

These protections are enshrined in regulatory law and brokers who are found to be in contravention are penalised and can even have their operating licence removed altogether.

A useful resource for traders, CySEC hosts an up-to-date list of brokers that are legally allowed to operate in their jurisdiction, if you are concerned that a broker may be operating illegally, check CySEC’s regulated entities list.

CySEC also publishes warnings on unregulated brokers operating illegally; many illegal brokers will often disguise themselves as regulated brokers, so it is crucial to check here if you are concerned.

All CySEC Brokers

This is our list of all CySEC regulated brokers we have reviewed. They are ordered by their overall rating, placing the best overall broker at the top of the list. 

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Overall Rating
CySEC Licence
Regulators
Beginner Friendly
Platforms
Min. Deposit
Cost of Trading
Fees
No. of FX Pairs
Compare
Official Site
4.68 /5
Read Review
319/17
FCA Regulated Brokers
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
Excellent
Capital.com
AUD 20
USD 6
Fees Included in Spread
137
Visit Broker >
Your capital is at risk
4.61 /5
Read Review
388/20
FCA Regulated Brokers
ASIC Regulated Forex Brokers
CySEC Regulated Brokers
Dubai Financial Services Authority
Excellent
AUD 100
USD 6.90
From 7 USD / lot - Razor Account
60
Visit Broker >
Your capital is at risk
4.49 /5
Read Review
092/08
FCA Regulated Brokers
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
Financial Services Conduct Authority
Excellent
AUD 100
USD 7
Fees Included in Spread
67
Visit Broker >
Your capital is at risk
4.48 /5
Read Review
278/15
CySEC Regulated Brokers
FCA Regulated Brokers
Labuan Financial Services Authority
Financial Services Conduct Authority
The Seychelles Financial Services Authority
Excellent
AUD 100
USD 4
4 USD / lot - Pro Account
62
Visit Broker >
Your capital is at risk
4.48 /5
Read Review
347/17
ASIC Regulated Forex Brokers
Financial Services Conduct Authority
British Virgin Islands Financial Services Commission
Financial Services Agency
CySEC Regulated Brokers
Central Bank of Ireland
Excellent
Avatrade Social
AvaOptions
AUD 100
USD 9
Fees Included in Spread
55
Visit Broker >
Your capital is at risk
4.46 /5
Read Review
362/18
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
The Seychelles Financial Services Authority
Excellent
Zulu Trade
AUD 200
USD 8
7 USD / lot - Raw Spread Account
64
Visit Broker >
Your capital is at risk
4.33 /5
Read Review
185/12
CySEC Regulated Brokers
FCA Regulated Brokers
Financial Services Conduct Authority
Financial Services Commission
Excellent
AUD 10
USD 15
From 4 USD / ECN Accounts
62
Visit Broker >
Your capital is at risk
4.32 /5
Read Review
199/13
CySEC Regulated Brokers
Financial Services Commission
The Seychelles Financial Services Authority
Excellent
AUD 100
USD 15
5 USD / lot - RAW account
50
Visit Broker >
Your capital is at risk
4.29 /5
Read Review
078/07
FCA Regulated Brokers
CySEC Regulated Brokers
Financial Services Conduct Authority
Dubai Financial Services Authority
Securities Commission of the Bahamas
Excellent
FxProEdge
AUD 100
USD 14
9 USD / lot
70
Visit Broker >
Your capital is at risk
4.28 /5
Read Review
371/18
ASIC Regulated Forex Brokers
CySEC Regulated Brokers
Excellent
IRESS
AUD 100
USD 7
6 USD / lot - RAW Accounts
60
Visit Broker >
Your capital is at risk
4.25 /5
Read Review
120/10
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
FCA Regulated Brokers
International Financial Services Commission
Excellent
AUD 5
USD 16
7 USD / lot - XM Zero Account
57
Visit Broker >
Your capital is at risk
4.24 /5
Read Review
201/13
ASIC Regulated Forex Brokers
CySEC Regulated Brokers
FCA Regulated Brokers
Excellent
MT Supreme
AUD 100
USD 5
1.8 - 3 USD per lot
50
Visit Broker >
Your capital is at risk
4.24 /5
Read Review
392/20
FCA Regulated Brokers
ASIC Regulated Forex Brokers
Financial Services Conduct Authority
CySEC Regulated Brokers
Bermuda Monetary Authority
Standard
NinjaTrader
TradeStation
AUD 50
USD 13
None
45
Visit Broker >
Your capital is at risk
4.14 /5
Read Review
138/11
CySEC Regulated Brokers
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
The Seychelles Financial Services Authority
Standard
USD 1
USD 7.80
None
80
Visit Broker >
Your capital is at risk
4.10 /5
Read Review
322/17
ASIC Regulated Forex Brokers
CySEC Regulated Brokers
Financial Services Agency
Financial Services Commission
Standard
AUD 200
USD 10
6 USD / lot - GoPlus+
49
Visit Broker >
Your capital is at risk
4.09 /5
Read Review
250/14
FCA Regulated Brokers
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
Best Forex Brokers in Singapore
FMA Regulated Forex Brokers
Standard
Plus500
AUD 200
USD 8
Fees Included in Spread
70
Visit Broker >
Your capital is at risk
4.08 /5
Read Review
259/14
CySEC Regulated Brokers
FCA Regulated Brokers
Dubai Financial Services Authority
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
Standard
USD 100
USD 12
8 USD / lot - Raw Account
70
Visit Broker >
Your capital is at risk
4.07 /5
Read Review
096/08
FCA Regulated Brokers
Financial Services Conduct Authority
CySEC Regulated Brokers
Standard
ETX
AUD 100
USD 6
Fees Included in Spread
62
Visit Broker >
Your capital is at risk
4.07 /5
Read Review
093/08
CySEC Regulated Brokers
Financial Services Authority – St. Vincent & the Grenadines
Excellent
USD 50
USD 10
10 USD / lot - ECN Account
56
Visit Broker >
Your capital is at risk
4.02 /5
Read Review
372/18
CySEC Regulated Brokers
Finansinspektionen
Financial Services Authority – St. Vincent & the Grenadines
Standard
USD 50
USD 11
Fees Included in Spread
32
Visit Broker >
Your capital is at risk
3.98 /5
Read Review
079/07
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
The Seychelles Financial Services Authority
Standard
AUD 200
USD 20
Fees Included in Spread
103
Visit Broker >
Your capital is at risk
3.84 /5
Read Review
121/10
CySEC Regulated Brokers
Standard
USD 0
USD 6
None
71
Visit Broker >
Your capital is at risk
3.83 /5
Read Review
155/11
CySEC Regulated Brokers
FCA Regulated Brokers
Dubai Financial Services Authority
Finansinspektionen
Labuan Financial Services Authority
Capital Markets Authority
Standard
USD 50
USD 14
3 USD / lot
66
Visit Broker >
Your capital is at risk
3.83 /5
Read Review
383/20
CySEC Regulated Brokers
The Seychelles Financial Services Authority
Standard
USD 50
USD 15
Fees Included in Spread
50
Visit Broker >
Your capital is at risk
3.74 /5
Read Review
25/10
CySEC Regulated Brokers
FCA Regulated Brokers
ASIC Regulated Forex Brokers
Financial Services Conduct Authority
Standard
USD 50
USD 11
From USD 13.5 / lot - Zero Accounts
83
Visit Broker >
Your capital is at risk
3.70 /5
Read Review
202/13
CySEC Regulated Brokers
ASIC Regulated Forex Brokers
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
Standard
Sirix
AUD 500
USD 40
Fees Included in Spread
48
Visit Broker >
Your capital is at risk
3.69 /5
Read Review
109/10
CySEC Regulated Brokers
FCA Regulated Brokers
ASIC Regulated Forex Brokers
Standard
etoro
AUD 50
USD 10
Fees Included in Spread
60
Visit Broker >
67% of retail CFD accounts lose money
3.64 /5
Read Review
268/15
CySEC Regulated Brokers
Financial Services Commission
Standard
Sirix
USD 500
USD 24
Fees Included in Spread
63
Visit Broker >
Your capital is at risk
3.60 /5
Read Review
127/10
CySEC Regulated Brokers
Standard
USD 100
USD 20
50
Visit Broker >
Your capital is at risk
3.53 /5
Read Review
209/13
CySEC Regulated Brokers
Vanuatu
Standard
USD 10
USD 20
0,007% / Trade - Zero Account
33
Visit Broker >
Your capital is at risk
3.49 /5
Read Review
261/14
CySEC Regulated Brokers
Financial Services Conduct Authority
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
Vanuatu
Poor
USD 100
USD 15
10 USD / lot - ECN Account
43
Visit Broker >
Your capital is at risk
3.49 /5
Read Review
344/17
CySEC Regulated Brokers
Vanuatu
Standard
WebTrader
USD 500
USD 16
Fees Included in Spread
41
Visit Broker >
Your capital is at risk
3.42 /5
Read Review
227/14
CySEC Regulated Brokers
FCA Regulated Brokers
Financial Services Conduct Authority
Standard
Sirix
USD 100
USD 19
Fees Included in Spread
55
Visit Broker >
Your capital is at risk
3.32 /5
Read Review
266/15
CySEC Regulated Brokers
British Virgin Islands Financial Services Commission
Standard
USD 1
USD 30
Commission is 0.03% - 0.07%
110
Visit Broker >
Your capital is at risk
3.13 /5
Read Review
247/14
CySEC Regulated Brokers
Finansinspektionen
Bundesanstalt für Finanzdienstleistungsaufsicht
Poor
IQ option
USD 10
USD 7
Fees Included in Spread
25
Visit Broker >
Your capital is at risk

Broker Regulation and Why it’s Important

Regulators are essential in all financial markets because they set the rules that guarantee a level playing field. They also enforce those rules by requiring members to submit regular reports and have independent audits. Most good regulators will also have an investigations department and will conduct unannounced visits to regulated companies to ensure day-to-day operations are compliant. Regulators also have the power to impose penalties on members, including fines, sanctions, and even revoking a company’s operating licence, thereby putting them out of business.

What is interesting about the Forex market is that there is no legal requirement for brokers to be regulated. CFD Forex trading is an Over the Counter (OTC) derivatives market – this means that there is no central exchange and no overall regulator with oversight for the market.

Having a wholly unregulated market is a bad idea and leads to massive consumer fraud, as happens on a smaller scale in regions with poorly regulated local Forex industries. Instead of having a single regulator, countries and regions regulate the brokers who reside in their territory. As each regulator has different abilities and priorities, Forex regulation is not uniform, and brokers must abide by different rules depending on which country/countries they are legally resident.

What is CySEC?

CySEC is the financial regulatory agency of Cyprus. It was founded in 2001 and when Cyprus joined the EU in 2004 CySEC became part of the pan-European MiFID (Markets in Financial Instruments Directive). MiFID is an EU law the harmonises regulation for financial services across the member states, allowing for financial firms registered in one state to essentially have a “passport” to operate in all the other EU states.

In terms of the Forex industry, this means that any Forex broker registered in Cyprus can market to, and accept business from, all EU citizens.

As the Cyprus financial regulator, CySEC has many crucial obligations in the financial sector – most of them outside the Forex industry – these are:

  • To review applications for and provide operating licenses to supervised financial companies – and revoke these if necessary.
  • To supervise and regulate the operation of and all transactions on the Cyprus Stock Exchange
  • To carry out all necessary investigations in view of the exercise of its duties under the law as well as on behalf of other foreign competent Authorities.
  • To impose administrative and disciplinary sanctions provided by the law.
  • To issue regulatory Directives and Decisions.
  • To cooperate and exchange data and information with foreign supervisory authorities.

CySEC and ESMA: Restrictions on Trading Conditions

In March 2018, the European Securities Markets Authority (ESMA – an EU taskforce which examines EU-wide financial risk) announced new regulations on all CFD trading in the EU; these regulations were a directive at the supranational level – meaning that all EU members were required to abide by the regulations and enshrine them in domestic law.

Cyprus, as an EU member state, must also abide by this new set of regulations and all CySEC-regulated brokers will have the following restrictions as a result:

  • Leverage Restriction: Maximum leverage of 30:1 on major currency pairs, 20:1 on all other pairs, 5:1 on equities, 2:1 on cryptocurrencies
  • Negative Balance Protection: All brokers must guarantee negative balance protection for all traders
  • No Bonus: All bonuses, promotions or any other type of trading incentive are banned
  • Margin Call: Brokers will be required to close a client’s open positions when the account equity reaches 50% of the required minimum margin by all open positions.
  • Risk Warning: All brokers will be required to display a standard risk warning showing what percentage of clients lose money with them.

While many traders and brokers were unhappy with the restriction on leverage, many people in the Forex industry agree that the new ESMA regulations protect traders from making huge losses without critically damaging broker profits.

CySEC vs FCA

The Financial Conduct Authority is the United Kingdom’s financial regulator and is generally upheld as the best and strictest national regulatory authority in the world. Most good brokers will be regulated either by CySEC, the FCA or sometimes both.

On paper, there is little difference between CySEC or FCA regulation – though the licencing fee for CySEC brokers is only 7,000 EUR, compared to 25,000 GBP for the FCA. Aside from that, both regulators require segregated accounts, membership of a compensation fund and have high capital adequacy standards. All brokers regulated by both authorities will have the same leverage restrictions and other constraints required by the ESMA regulation – though whether this continues to remain the case once the United Kingdom leaves the EU remains to be seen.

The differences between the two regulators are mainly anecdotal, while the FCA is seen as unimpeachable when it comes to protecting consumers and being tough on brokers, many traders complain that CySEC is too broker-friendly and that it gives away operating licences too easily. CySEC also has a history of being easy on badly behaved brokers, with industry commentators noting that fines being levied by CySEC tended to be smaller than those handed out by other EU regulatory organisations.

But since 2016, CySEC has made sweeping changes to both the registration and regulation processes of all registered entities. Changes include more transparency regarding existing listed entities, harsher fines and regular unannounced onsite visits from CySEC investigators to check compliance. This has led to a surge in broker suspensions and license revoking, and CySEC is gradually losing its image as a light-touch regulator.

Conclusion

As the regulator with the most EU registered brokers, CySEC has a critical role in the Forex industry, and millions of traders rely on their ability to ensure a fair trading environment.

While in the past, this ability has been questioned, currently CySEC is seen as a leader in the Forex regulatory world and brokers with CySEC regulation should be considered safe and secure places for trading.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

Our Methodology

Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.

All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers

References

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