CySec Regulated Forex Brokers, are forex brokers with a physical presence in Cyprus and their operations are fully regulated by the Cyprus Securities and Exchange Commission(CySec).
CySEC Regulated Forex Brokers List
MAS, JFSA, DIFC
What is CySEC regulation?
The Cyprus Securities Exchange Commission or CySec, is the sole regulator for the financial industry in the island of Cyprus. As Cyprus is a member of the European Union, CySec abides to the rules and regulations set by Markets in Financial Instruments Directive(MiFID). MiFID was established back in 2008 by the European parliament, in order to harmonize the regulations governing the financial services industry within the countries of the Eurozone. It established the standards for financial services providers to follow. It is primarily focused on over the counter transactions such as the forex trading and other leveraged products. It is interesting to note that, CySEC managed to become the first major regulatory body in Europe to recognize and regulate binary options as a financial instrument.
What does CySec Regulation mean for traders and investors
So what does trading with a CySeC regulated forex broker means for investors and traders?
The majority of regulated forex brokers in the world, fall under the jurisdiction of CySEC. The regulations imposed by CySEC have a strong impact on investors worldwide, as forex brokers under the oversight of CySEC are required to operate in a fully compliant way with transparency.
CySec enforces the following rules and safeguards that protect traders and investors:
- All investor monies are kept in segregated accounts which the broker is not permitted to access. Put simply, the broker is not allowed to use client money for its own operational needs.
- Forex Brokers under CySEC are required to maintain sufficient capital in order to meet the capital adequacy ratio requirement. This is ensures that the broker has sufficient capital to fulfill its contractual obligations at any given time.
- CySEC regulated brokers are required to submit on a regular basis, their financial statements so that the regulatory agency can monitor if they comply with all requirements.
- Forex Brokers under CySec need to join the Investor Compensation Fund Scheme to get their operational license. The purpose of this fund is to protect investors in the event that brokergoes bankrupt and is unable to fulfill its contractual obligations. Under this protection scheme, an investor’s investment is protected up to the maximum amount of 20,000 euros.