Cysec Forex Brokers
Introduction to CySEC Regulation
Cyprus Securities and Exchange Commission is the financial regulatory authority in Cyprus. Since Cyprus have been a member of EU since 2004, CySEC follows Markets in Financial Instrument Directive or MiFID which is a standard for financial industry imposed by EU.
However, the rules and protocols of a CySEC broker is comparatively easy then other financial institutions. This is the first regulator who gave binary option the recognition of an investment service. Furthermore, it also facilitates the brokers who want to save money from tax with different aspects.But still it maintains a handsome set of protocols to preserve the rights & funds of investors with different rules. For example, if CySEC regulated brokers somehow become insolvent to run the trades, then all the retail broker’s fund is compensated by Investor Compensation Fund up to €20,000.
What does mean “for CySEC REGULATED Broker” for a retail Forex trader?
For a retail broker CySEC Regulated Broker means the following things:
- The broker has high capital & it remains under strict supervision of MiFID directive.
- Their investment is completely safe & for any kinds of problems a retailer will be compensated their money up to 20,000 euro.
- CySEC regulated brokers means a retailer doesn’t need to worry about the quality of trade, the guarantee of money and the research for a good broker.
The core mission of CySEC is the supervision of stock & financial market. And depending on this mission, CySEC possesses the following responsibilities:
- Monitor & supervise the activities and behavior of CySEC regulated brokers.
- Control & monitor the transaction processing of Cyprus stock market.
- Check & approve the operation licenses for financial agencies like brokers, investment firms etc.
- Give penalty to the brokers or investment firms who violates the rule of CySEC as well as the money making world of Cyprus.
- Ensure a manipulation free, safe & sound investment market for Cyprus.
How CySEC Regulation protects you
CySEC regulation includes the terms those are best to protect the investor’s interest. More precisely we can consider the following reasons for what you can become sure of your protection:
- First of all, all CySEC brokers need to submit their financial report with full audit to the authority. As a result, if any fraudulent or limitation is found, the broker will be disqualified from the regulation.
- The investors money is kept under segregated bank account where even the broker is not allowed to access any time. Therefore, there is no chance of using your money by the broker for other purpose.
- Besides, since your money are kept under segregated account, your broker can’t claim it as their asset. It means if somehow broker lose the regulation or somehow want to abuse your money, they have no way to do so.
- Furthermore, brokers need to submit regular financial activities to confirm the daily trade transparency. They are also remain under strict supervision and for any misbehave or dishonesty CySEC has the full right to cancel their license also.
Investor’s protection: The Compensation Scheme
Before applying for CySEC regulation, the broker must join Investment Compensation Fund Scheme. Under this scheme if a broker become bankrupt or violate any any obligation of the contract, a retail broker can claim a compensation up to 20,000 euro. So, choosing a CySEC broker means you are automatically gaining this compensation scheme.
Quick Tips for CySEC Regulated Brokers
In straight sentence, if you follow the directives of the authority, your application will be approved. But still, you can follow the guidelines / tips below:
- CySEC license cost is not very high, but the capital of the broker should be high. So to become regulated by this institution, try to have a handsome capital.
- Maintain regular financial statement even after getting approval from CySEC. Otherwise, anytime your membership can be taken from you.
- Try not to take part in unethical practice because for these kinds of issues you can be banned from the market permanently.
Verifying the Authenticity of CySEC Regulated Forex Brokers
To check whether your broker is CySEC regulated or not, please keep visiting the official website of CySEC. Here you’ll get the following info:
- CySEC published a list of their member here: https://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot . So, if you don’t find your broker in this list, it means it is not CySEC regulated.
- However, some sites who don’t have CySEC license also cheat their identity. In that case, CySEC regularly monitor this issue & publish notes about suspicious brokers so that you can be careful.
Finally, you also read blogs, news about investment market which can help you to identify the trend of authenticity.
CySEC Regulation & Forex Brokers in Cyprus
It is easier for the brokers to get CySEC membership. And that’s why there are enormous number of broker under this regulator. However, whatever the number of broker is, the rules are same for all. And there is no backdoor for fake attempt.
CySEC may not be a globally powerful regulatory body. But if you want to penetrate into the financial market of Cyprus, then the best medicine for you to choose a broker who has a CySEC license & regulation. Because if you follow this way, then you can ensure both manipulation free trading for you & the safety of your fund.
FAQ: Frequently Asked Questions
What is CySEC regulation?
CySEC or Cyprus Securities and Exchange Commission imposes a set of protocols for the brokers around the Cyprus FX market. According to this rules, all regulated brokers are monitored so that the market becomes free of unethical practices and the fund of retail traders becomes safe & sound.
How Is CySEC Beneficial to A Consumer?
It imposed compensation scheme to the broker for the consumers & always monitor for the fraudulent activities around the financial market of Europe those help consumer to trade those a safe corridor.
Does CySEC Provide Mediation or A Complaint Resolution Service?
They have a team who always researches the status of customers. So, if somehow customer is not satisfied or any rule violation occur, retailers can file their complains to the authority.
So, I have A Complaint against a CySEC Forex Broker, What Should I Do?
You can directly submit your complain to CySEC via phone, email or their website. But be aware that you complain is related to CySEC protocol. Otherwise, you may not get responses from them.
Why Are CySEC Regulated Brokers Popular?
First of all, Europe is the most popular in financial market. And then, CySEC is one of the most popular regulatory body in Europe. That’s why, in a nutshell everyone wants to know whether a broker is CySEC regulated or not initially. Furthermore, the directives & compensation scheme also makes it more popular & welcomed by retailers.
Are CySEC Regulated Brokers Reliable?
Although it is easier to get membership or CySEC that other regulator, still you can trust a CySEC broker. Because may be the rules are easy, but they are strictly maintained.