Best BaFin Regulated Forex Brokers 2019

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HotForex

Regulated By:CySEC, DFSA, FCA, FSA, FSC, MiFID

Foundation Year:2010

Headquarters:Spyrou Kyprianou 50, Irida 3 Tower, 10th Floor, Larnaca 6057, Cyprus

Min Deposit:$5

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Orbex

Regulated By:CySEC, FCA

Foundation Year:2010

Headquarters:No. 6, 82nd Street, Ground Floor, 4153 Kato Polemidia, Limassol, Cyprus

Min Deposit:$500

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XM

Regulated By:ASIC, CySEC, FCA

Foundation Year:2009

Headquarters:12 Richard & Verengaria Street, Araouzos Castle Court, 3rd Floor, 3042 Limassol, Cyprus

Min Deposit:$5

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XTB

Regulated By:BaFin, CNMV in Spain, CySEC, FCA, IFSC

Foundation Year:2002

Headquarters:Level 34, One Canada Square, Canary Wharf, E14 5AA, London, United Kingdom

Min Deposit:$0

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AvaTrade

Regulated By:ASIC, BVI, CBI, FSA(JP)

Foundation Year:2006

Headquarters:Five Lamps Place, 77-80 Amiens Street, Dublin 1, DO1A742, Dublin, Ireland

Min Deposit:$100

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BaFin Regulated Brokers Comparison Table

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BrokerRatingOfficial SiteRegulationsMin DepositMax LeverageTrading PlatformsFoundation YearPublicly TradedTrading Desk TypeCurrenciesCommoditiesIndicesStocksCryptoCommission on tradesFixed spreadsoffers promotionsOfficial Site
HotForex
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CySEC, DFSA, FCA, FSA, FSC, MiFID

$5

1:1000

MT4, MT5

2010

ECN, STP

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Orbex
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CySEC, FCA

$500

1:500

MT4

2010

Dealing Desk, ECN, STP

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XM
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ASIC, CySEC, FCA

$5

1:888

MT4, MT5

2009

Market Maker

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XTB
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BaFin, CNMV in Spain, CySEC, FCA, IFSC

$0

1:200

MT4

2002

STP

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AvaTrade
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ASIC, BVI, CBI, FSA(JP)

$100

1:30

ActTrader, MT4, MT5, Proprietary, Zulutrade

2006

Dealing Desk, Market Maker

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Introduction to BaFin Regulation

BaFin which is short for Bundesanstalt für Finanzdienstleistungsaufsicht is the federal financial oversight authority in Germany. It regulates the banking, securities, investment funds and insurance sectors. It is arguably the largest regulator in Europe due to the fact that Frankfurt makes up a majority of the financial market in this region. In this article, we highlight how BaFin operates and its role in the financial sector in Germany.

The Federal Financial Supervisory Authority (BaFin) is an amalgamation of three major industry regulators that came together in 2002. The three regulators were The Federal Securities Supervisory Office, The Federal Insurance Supervisory office and The Federal Banking Supervisory Office. Initially, BaFin did not have extensive regulation regarding leverages forex and CFD trading as this was not a major sector. However due to the recent exponential growth of this forex and CFD trading, BaFin had to come up with a stringent set of rules to protect both the investor and the service provider. BaFin is an independent body as it operates through funding not from the federal government but from the business institutions which it regulates.

BaFin’s Responsibilities

BaFin’s major role is to ensure and maintain the integrity and transparency of the German financial sector. It is in charge of ensuring the constant solvency of banks and insurers such that they are capable of delivery of services to their clients and the government. It also is charged with the responsibility of maintaining investor confidence in the various financial markets by making sure that all players in this industry comply with the legislations set by BaFin. This means that BaFin must continuously crack the whip on rogue service providers in this sector.

How BaFin Regulation protects you

Consumer protection is among the major responsibilities of BaFin according to the Securities Trading Act (WpHG). One of the core pillars that exists within BaFin is the Consumer Advisory Council that is in charge of collecting and analysing information on the financial markets and ensuring the investors are not exposed to any form of foul play. The major risks that investors face while dealing in the financial markets sector include insider trading, price manipulation. BaFin has the power to initiate legal action in the event that investigations reveal any inconsistencies in the financial sector.

Guidelines for BaFin Regulated Brokers

There are some major guidelines outlined by BaFin that regulate brokers. One of these regulates is negative balance protection. Forex and CFD trading is often leveraged such that the investor is able to open a position that is worth more than the balance in their account. This means that spikes in prices (that often occur at a moment’s notice) can cause major profits or losses for the investor. Sometimes due to extreme volatility which causes ‘gapping’ in the markets, stop loss orders are no able to be executed thus exposing the investor to potentially negative losses. Negative balance protection means that the customer is assured that he/she will not lose any more money than the capital they initially invested.

Other regulation guidelines include the rights of BaFin to request financial/operational information from brokerages, conducting stress tests on brokerages, analysis of annual accounts and conducting of supervisory interviews from time to time.