Best MiFID Regulated Forex Brokers 2020
The brokers below represent the best MiFID regulated brokers
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75% of retail CFD investors lose money
ASIC, CySEC, FCA, MiFID
cTrader, Currenex, eToro Platform, Keystone, Marketspulse, Mirror Trader, MT4, MT5, Tradologic, Zulutrade
Market Maker, No dealing desk, STP
75% of retail CFD investors lose money
76.4% of retail CFD accounts lose money
ASIC, CySEC, FCA, FSB, ISA, MAS
No dealing desk
76.4% of retail CFD accounts lose money
Here’s a list of the Best MiFID regulated brokers:
eToro is an online trading platform that was founded in 2007 by the Assia siblings and their friend David Ring in Tel Aviv, Israel. Formerly known as RetailFX, eToro is the pioneering online broker for social trading. Their Openbook social trading platform in fact changed the nature of the way beginner online traders can trade the financial markets. It made the markets accessible to everyone, no matter what their level of experience by creating a user-friendly environment and allowing traders to copy the trades of other traders’ strategies automatically.
Plus500 is a leading CFD trading platform with support for stocks, indices, cryptocurrencies, and Forex. This commission-free brokerage charges very low spread-rates and offers fast trades on a great platform. Plus500 supports complex trades, includes negative balance protection, and makes trading an educational and hopefully profitable venture.
You can start with a free demo account to test the platform and any trading strategy. Real money accounts offer leverage of up to 1:30. This broker is based in Israel and regulated by the Financial Conduct Authority (FCA) in the UK.
Markets in Financial Instruments Directive (MiFID) Regulation
The Markets in Financial Instruments Directive (known as MiFID), is a form of legislation governing the financial markets in the European Economic area – which includes all 28 EU member states plus Iceland, Norway and Liechtenstein. It was put in place to create competition among investors, regulate investment services, and protect the consumers involved. The directive was brought into the European Parliament and Council in 2004, but only replaced the Investment Services Directive (ISD) in 2007. Once introduced, the law brought investment services and activities under a single market in order to increase competitiveness, reduce prices, expand choices for investors, and increase efficiency. That being said, the MiFID is a very important aspect in the EU’s regulation of financial markets.
The MiFID Responsibilities & MiFID II Responsibilities
The primary objective of the MiFID is to improve and control the regulatory regime for investment services with in the EU and its economic area. Thus, it has many obligations and responsibilities put in place to achieve their goals and maintain the status of an important and appreciated piece of legislation in the financial sector.
The MiFID is responsible for governing the operation of financial instruments by banks and investment firms, as well as traditional stock exchanges and alternative trading venues. Basically, the MiFID has legislation over almost all tradeable financial products in the European Economic Area.
The tasks involved with governing these financial bodies require the MiFID to:
- Create harmonization across jurisdictions
- Protect the consumers (investors)
- Increase efficiency and proficiency among the markets
- Improve financial transparency within companies
Although these are the MiFID’s responsibilities, some argue that they failed in achieving their goals. Due to the financial crisis of 2008, it became evident that a more complete and in depth regulatory framework was needed to further protect the investors, and address the development of new trading platforms and methods.
So, in June 2014, the European Commission adopted new and revised legislation called MiFID 2 and MiFIR. The MiFID 2 will improve upon the responsibilities laid out by the first legislation such as:
- Safeguarding that regulated platforms are performing organised trading.
- Introducing new rules on algorithmic and high frequency trading.
- Improving the transparency and mitigating issues in the financial markets
- Enhancing the protection of investors and improving the rules and conditions of conducting business in the trading and payment of financial instruments
The legislation of MiFID 2 is said to be implemented in January 2018.
How the MiFID Regulation protects you
The most important aspect of MiFID regulation is the protection of investors in a financial services market. It was implemented to provide security and comfort with the trading of financial entities. The MiFID strives to provide this level of comfort through transparency in the markets, and a wealth of knowledge and communication regarding financial markets and entities. Businesses must comply with the rules and regulations set out by the MiFID, including how the business itself is conducted. By implementing these conditions, it provides protection and security for the investor. Some areas of protection include:
- Improvement of administrative and organisational requirements for firms.
- Implementation of business rules that cover firms’ relationships with all categories of clients (less experienced, knowledgeable, and sophisticated investors)
- Introduction of new authorities at both the national and European level.
With the implementation of these measures the MiFID hopes to mitigate conflicts of interest between clients and the industry by putting investors interest of high importance.
Furthermore, the MiFID has continued efforts to improve:
- The attention paid to product design.
- More informative information about investments.
- Better treatment of the clients and their complaints.
- Improved assessment of the clients needs.
- A more efficient framework.
- Greater protection of investors’ assets.
It’s safe to say the MiFID is taking adequate action in the implementation of measures to improve and protect the security of investors and consumers.
Guidelines for Mifid Regulated Brokers:
In order to hold the status of a regulated MiFID Forex Broker, the firm must meet the following requirements:
- MiFID Forex brokers must be licensed, regulated, and authorized in the country where the registered office resides.
- MiFID forex brokers are required to place their clients into 1 of 3 categories, “eligible counterparties”, “professional clients” and “retail clients”. This is to better serve the clients and give them the protection they need.
- MiFID forex brokers are required to handle their clients in an organized and thorough way by collecting their information when accepting a client’s orders.
- MiFID forex brokers are required to be fully transparent with their pre-trade and post-trade information by providing data on price levels regarding the buy and sell side, the best bids and offers, as well as the price, volume and time of all trades.
- MiFID forex brokers must guarantee a fast and smooth execution with the best possible execution or settlement of an order.
These rules and regulations are put in place to enhance the trader experience and protect the investors interests through transparent and trustworthy markets.
Q: What is MiFID II regulation?
A: The Markets in Financial Instruments Directive (known as MiFID), is a form of legislation governing the financial markets in the European Economic area. It is the foundation of the EU’s regulation of financial markets, and it was put in place to create competition among investors, regulate investment services, and protect the consumers involved.
Q: How does MiFID work?
A: MiFID is put into practice through its rules, regulations, and guidelines imposed on financial brokers. It requires all EU members to share an understanding and following of the strong regulatory framework that protects investors.
Q: Which countries does MiFID apply to?
A: It applies to all 28 EU member states plus Iceland, Norway and Liechtenstein.
Q: Who enforces MiFID?
A: The MiFID was approved and implemented through the council of the European Union and the European Parliament respectively. The European Parliament sets out a comprehensive framework for the legislation.
Q: Who does MiFID II affect?
A: The MiFID is said to have a dramatic impact on the way the derivatives and securities are being regulated. It will therefore impact the investment management industry.
If you trade with any EU regulated broker you will find you are protected by MiFID directive too. It’s important to know your rights as a trader.