Best CySEC Regulated Forex Brokers 2019

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Pro Tip: Most of these brokers offer free demo accounts so you can test the brokers and their platforms with virtual money. Give it a try with some play money before using your own cash.
Note: Not all Forex brokers accept US clients. For your convenience we specified those that accept US Forex traders as clients.

FXTM

Regulated By:CySEC, FCA, FSC

Foundation Year:2011

Headquarters:FXTM Tower, 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus

Min Deposit:$10

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90% of retail CFD accounts lose money

90% of retail CFD accounts lose money

Plus500

Regulated By:ASIC, CySEC, FCA, FSB, ISA, MAS

Foundation Year:2008

Headquarters:Building 25, MATAM, Haifa, Israel

Min Deposit:$100

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76.4% of retail CFD accounts lose money

76.4% of retail CFD accounts lose money

eToro

Regulated By:ASIC, CySEC, FCA, MiFID

Foundation Year:2007

Headquarters:Kanika International Business Center 7th Floor, 4 Profiti Ilia Street Germasogeia, Limassol, Cyprus

Min Deposit:$200

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75% of retail CFD investors lose money

75% of retail CFD investors lose money

LiteForex

Regulated By:CySEC

Foundation Year:2005

Headquarters:124 Gladstonos Street, The Hawk Building, 4th Floor, 3032, Limassol, Cyprus

Min Deposit:$50

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Your capital is at risk

Your capital is at risk

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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Your capital is at risk

Your capital is at risk

CySEC Regulated Brokers Comparison Table

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BrokerRatingOfficial SiteRegulationsMin DepositMax LeverageTrading PlatformsFoundation YearPublicly TradedTrading Desk TypeCurrenciesCommoditiesIndicesStocksCryptoCommission on tradesFixed spreadsoffers promotionsOfficial Site
FXTM
Visit Broker>

90% of retail CFD accounts lose money

CySEC, FCA, FSC

$10

1:30

MT4, MT5

2011

ECN, STP

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90% of retail CFD accounts lose money

Plus500
Visit Broker>

76.4% of retail CFD accounts lose money

ASIC, CySEC, FCA, FSB, ISA, MAS

$100

1:30

Plus500

2008

No dealing desk

Visit Broker>

76.4% of retail CFD accounts lose money

eToro
Visit Broker>

75% of retail CFD investors lose money

ASIC, CySEC, FCA, MiFID

$200

1:30

cTrader, Currenex, eToro Platform, Keystone, Marketspulse, Mirror Trader, MT4, MT5, Tradologic, Zulutrade

2007

Market Maker, No dealing desk, STP

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75% of retail CFD investors lose money

LiteForex
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Your capital is at risk

CySEC

$50

1:500

MT5

2005

ECN

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Your capital is at risk

HotForex
Visit Broker>

Your capital is at risk

CySEC, DFSA, FCA, FSA, FSC, MiFID

$5

1:1000

MT4, MT5

2010

ECN, STP

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Your capital is at risk

Introduction to Forex Regulations

For many beginner traders who are new to online trading, the normal assumption is, if a broker is not regulated, then it is likely to be operating illegally. However, this is not the case for the forex market, as it is an OTC market with no specific regulations covering it. What you should be aware of is that most of the forex regulations that we often hear about only cover a specific jurisdiction and do not apply to the entire industry on a global scale. So if a forex broker is able to operate with no regulatory oversight, why bother regulating it? In fact proponents of the free market theory might argue that a market work most efficiently when it is not curtailed by any artificial regulations. While this might be true in theory, the reality is very much different.

Regulations unlike legislations are not written by the lawmakers but instead are crafted by bureaucrats based on their understanding of what the market needs in order to function smoothly. In other words, regulations are flexible and can change accordingly to circumstances unlike legislations which require amendments to the legislation before any changes can take effect.

over the last decade has become the major center for financial services providers to set up shop in Europe. Given the fact that Cyprus is also a member of the European Union (EU), under the MiFID (Markets in Financial Instruments Directive) rules, forex brokers are permitted to “passport” their authorization issued by CySEC and operate legally in other member states within the EU.

What is CySEC regulation?

The Cyprus Securities Exchange Commission or CySEC as it is often known, is the regulator for the financial industry in Cyprus. As a member state of the EU, it is required to abide by the regulatory framework as established under the Markets in Financial Instruments Directive. MiFID was passed by the European Parliament in 2008 in order to harmonize the regulations governing the financial services industry within the EU. It established the standards for financial services providers to follow. It is primarily focused on OTC transactions such as the forex industry.

When Cyprus joined the EU in 2004, this meant that CySEC fell under the MiFID rules. This gave firms regulated under CySEC access to the financial markets within the EU.  While Cyprus was previously known internationally as a tax haven, as a result of the MiFID, the financial regulatory framework in Cyprus since then changed significantly to much higher standard on par with other major financial centers around the world. In fact, CySEC became the first major regulatory body in Europe with recognize and regulate binary options as a financial instrument.

CySEC’s Responsibilities

The main responsibilities of CySEC are as follows:

  • Supervision and control of the Cyprus Stock Market
  • Monitor transactions carried on the Cyprus Stock Market
  • Monitor the conduct of listed companies and financial services providers
  • Grant operation license to investment firms, consultants and brokers
  • Monitor investment services companies, investments funds and related services
  • Apply penalties or administrative sanctions for non compliance of regulatory requirements

How CySEC Regulation protects you

So how do CySEC regulations protect you as an investor? Since the majority of Europe’s regulated forex brokers fall under the jurisdiction of CySEC, the regulations imposed by CySEC have a strong impact on investor’s protection. It implies that forex brokers under the oversight of CySEC are required to operate with transparency and in a fair manner. Specifically as an investor trading with a CySEC regulated forex broker, you will benefit in the following manner:

  • All your monies are kept in a segregated trust account which the broker is not permitted to access. This helps to prevent any abuse of your money by the broker. In other words, the broker is not allowed to use your money for its own operational needs. Another benefit of having your money separated from the broker’s own funds is that the fact that creditors of the broker cannot file a claim on this money as it is not part of the broker’s asset.
  • Regulated brokers under CySEC are required to maintain sufficient capital to meet the capital adequacy ratio requirement. This is ensure that the broker have sufficient capital at all times to fulfill the contractual obligations arising out of the transactions of their clients.
  • CySEC regulated brokers are required to submit regular financial statements to CySEC in order for the regulatory agency to monitor their compliances of the regulatory requirements. In this way, brokers will not be able to hide anything that is not in the interest of the investors.
  • As part of the regulatory requirement, CySEC’s regulated brokers are required to submit an independently audited financial report to CySEC.
  • Before any forex broker can be issued a licensed by CySEC, the broker is required to join the Investor Compensation Fund Scheme. The purpose of this fund is to protect investor should the broker becomes bankrupt and is unable to fulfill its contractual obligations. Under this scheme, an investor can file for compensation up to a maximum amount of 20,000 euros.
  • Brokers are constantly kept on their toes to ensure they operate fairly as they run the risk of having sanctions and penalties imposed on them. In the worse case scenario, the offending broker might even lose its operational license.

Guidelines for CySEC Regulated Brokers

Before a forex broker can be issued a Cyprus Investment Firm (CIF) by CySEC, it must first be able to meet certain guidelines. Some of these guidelines include:

  • Having more than one individual involved in the administration of the forex brokerage.
  • Under its CySEC license application, the broker must list all the services and products which they plan to offer.
  • Must have an initial share capital of at least 200,000 euros if they handle their clients’ funds.
  • Must have an insurance coverage of at one million euros for individual loss and a total coverage of 1.5 million euros annually for losses resulting from inactions or negligence.
  • CySEC Forex brokers should maintain at least €750,000 in operating capital.

Verifying the Authenticity Of CySEC Regulated Forex Brokers

In order to help investors and traders verify the authenticity of a CySEC regulated broker, CySEC has published a list of regulated brokers on its website which investors can refer to check the authenticity of a broker’s CIF license number. The link to this list is: http://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/

In addition, CySEC also regularly issue warnings on its website to warn investors of any unregulated broker claiming to be regulated by CySEC. This list is updated regularly and can be viewed at the following link:  http://www.cysec.gov.cy/en-GB/public-info/warnings/cysec/

Conclusion

Although an unregulated forex broker does not necessarily mean that the broker is in any way inferior to a CySEC regulated broker, we have to bear in mind that CySEC’s main objective is to protect the interest of investors. It has no other vested interests except to maintain the reputation of Cyprus as an international major financial center. Furthermore, we should also remember that even regulated brokers can sometimes break the rules. The difference between the unregulated broker and a regulated broker is that for the latter, you have an independent body that will hold the broker accountable for its infractions. So ask yourself this, why should you accept any less from a broker when you obviously have a better choice in term of a CySEC regulated forex broker?

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