RECOMMENDED FOREX BROKERS
Do not invest more money than you can afford to lose.
The Cyprus Security and Exchange Commission (CySEC) issued several circulars on Wednesday, advising Cyprus Investment Firms (CIFs) who provide financial services in Germany and Spain to consult with their legal advisers in order to ensure compliance with new the regulatory measures introduced by Spanish and German regulators.
Under the MiFID regulations every CySEC- regulated investment company is entitled to offer cross-border services in all EU Member States. Therefore, the Cypriot financial watchdog has undertaken this measure in order to ensure that CIFs with operations in Germany and Spain comply with rules and standards applicable in those jurisdictions.
In particular, Germany’s Federal Financial Supervisory Authority (BaFin) announced earlier in May it forbids the offering of CFDs without providing negative balance protection to retail clients. BaFin intervened the financial markets for the first time in order to protect consumers from the unforeseeable risks associated with trading on margin, as the client’s loss is not limited to his or her investment amount, but to all the assets.
Meanwhile, the Spanish Comision Nacional del Mercado de Valores (CNMV), announced its plans to take steps towards high-risk investment products in March and introduced a requirement for forex and binary options brokers targeting Spanish investors to explicitly warn customers if they offer leverage levels higher than 1:10. Furthermore, the CNMV obliges brokers to obtain a written text or voice recording from the retail investor that proves that he or she is aware of the risks associated with the specific product.
Cyprus is the most popular European jurisdiction for forex and binary options brokers who seek regulation that would allow them to operate across the EU under the MiFID passporting rules. Besides, the Cypriot financial watchdog is less strict than UK’s FCA and obtaining a CySEC license is easier. Major forex brokers who have a Cyprus license include XM, FxPro, HYCM, Fibo Group, Windsor Brokers, FXTM, easyMarkets, EverFX, etc.