AuthorBy Jeffrey Cammack
Updated: February 24, 2021

The Cyprus Securities and Exchange Commission (CySEC) is the financial regulator of the Mediterranean island of Cyprus.  Cyprus has been a hub for the Forex industry for almost two decades and most European brokers base themselves here to take advantage of CySEC’s experience, the well-managed regulatory environment, and a large international population of account managers and customers support staff.

CySEC is also well-regarded amongst traders for the stringent standards they apply to brokers and the secure trading environment that CySEC-regulated brokers offer as a result. 

The best CySEC regulated Forex brokers for 2021

Last updated on 24 Feb 2021
Updated 24 Feb 2021
by Editorial Director Jeffrey Cammackby Jeffrey Cammack
Jeffrey Cammack
All Brokers Regulated
All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
Trusted
1
XM
Min. Deposit
USD 5
4.384.38
CySEC Licence
120/10
Min. Spread
0.60 pips
Platforms
Overall Rating
11110.54.38/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 1.60 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the IFSC.
2
Plus500
Min. Deposit
USD 100
4.094.09
CySEC Licence
250/14
Min. Spread
0 pips
Platforms
Overall Rating
11110.54.09/ 5
AlertAccepts Kenyan Clients. Plus500 does not publish their spreads, and thus a cost of trading can not be established. Max leverage 30:1. Islamic account available. Only Plus500 proprietary trading platform supported. Plus500 is regulated by FCA, CySEC, ASIC, and MAS.All information presented is verified as of the date of the review.Most retail CFD accounts lose money. Your capital is at risk.
3
HotForex
Min. Deposit
USD 5
4.494.49
CySEC Licence
183/12
Min. Spread
0 pips
Platforms
Overall Rating
11110.54.49/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 1 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.
4
Exness
Min. Deposit
USD 1
4.124.12
CySEC Licence
178/12
Min. Spread
0.10 pips
Platforms
Overall Rating
11110.54.12/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 0.70 pips on trading account with lowest minimum deposit. Max leverage 2000:1. Islamic account available. MT4 & MT5 platforms supported. Exness is regulated by CySEC, FCA, and the FSC.
5
IronFX
Min. Deposit
USD 50
4.194.19
CySEC Licence
25/10
Min. Spread
0 pips
Platforms
Overall Rating
11110.54.19/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 0.2 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. Only MT4 platform supported. IronFX is regulated by CySEC, FCA, ASIC, and the FSCA - FSP:45276.
6
FP Markets
Min. Deposit
USD 100
4.234.23
CySEC Licence
371/18
Min. Spread
0 pips
Platforms
Overall Rating
11110.54.23/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 0.1 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & IRESS platforms supported. FP Markets is regulated by CySEC and ASIC.
7
FxPro
Min. Deposit
USD 100
4.244.24
CySEC Licence
078/07
Min. Spread
0.60 pips
Platforms
Overall Rating
11110.54.24/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the DFSA
8
easyMarkets
Min. Deposit
USD 25
3.983.98
CySEC Licence
079/07
Min. Spread
0.90 pips
Platforms
Overall Rating
1110.503.98/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 1.80 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & the proprietary easyMarkets platform are supported. easyMarkets is regulated by CySEC, ASIC, and the FSA in Seychelles.
9
XTB
Min. Deposit
USD 5
4.144.14
CySEC Licence
169/12
Min. Spread
0.80 pips
Platforms
Overall Rating
11110.54.14/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 0.50 pips on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & xStation platforms supported. XTB Group is regulated by CySEC, FCA and the IFSC
10
FXTM
Min. Deposit
USD 10
4.374.37
CySEC Licence
185/12
Min. Spread
0.10 pips
Platforms
Overall Rating
11110.54.37/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. Max leverage Flexible. Islamic account available. MT4 & MT5 platforms supported. Leverage offered can vary depending on country of residence, and your trading knowledge and experience. FXTM is regulated by CySEC, FCA, FSCA, and the FSC.
11
Fibo Group
Min. Deposit
USD 5
4.004.00
CySEC Licence
118/10
Min. Spread
0.20 pips
Platforms
Overall Rating
11110.54.00/ 5
AlertAccepts Kenyan Clients. Average spread EUR/USD 0.60 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4, MT5 & cTrader platforms supported. FIBO Group is regulated by CySEC and BVI FSC.

    Broker Regulation and Why it’s Important

    Regulators are essential in all financial markets because they set the rules that guarantee a level playing field. They also enforce those rules by requiring members to submit regular reports and have independent audits, most good regulators will also have an investigations department and will conduct unannounced visits to regulated companies to ensure day-to-day operations are compliant. Regulators also have the power to impose penalties on members, including fines, sanctions and even revoking a company’s operating licence, thereby putting them out of business.

    What is interesting about the Forex market is that there is no legal requirement for brokers to be regulated. CFD Forex trading is an Over the Counter (OTC) derivatives market – this means that there is no central exchange and no overall regulator with oversight for the market.

    Having a wholly unregulated market is a bad idea and leads to massive consumer fraud, as happens on a smaller scale in regions with poorly regulated local Forex industries. Instead of having a single regulator, countries and regions regulate the brokers who reside in their territory. As each regulator has different abilities and priorities, Forex regulation is not uniform, and brokers must abide by different rules depending on which country/countries they are legally resident.

    What is CySEC?

    CySEC is the financial regulatory agency of Cyprus. It was founded in 2001 and when Cyprus joined the EU in 2004 CySEC became part of the pan-European MiFID (Markets in Financial Instruments Directive). MiFID is an EU law the harmonises regulation for financial services across the member states, allowing for financial firms registered in one state to essentially have a “passport” to operate in all the other EU states.

    In terms of the Forex industry, this means that any Forex broker registered in Cyprus can market to, and accept business from, all EU citizens.

    As the Cyprus financial regulator, CySEC has many crucial obligations in the financial sector – most of them outside the Forex industry – these are:

    • To review applications for and provide operating licenses to supervised financial companies – and revoke these if necessary.
    • To supervise and regulate the operation of and all transactions on the Cyprus Stock Exchange
    • To carry out all necessary investigations in view of the exercise of its duties under the law as well as on behalf of other foreign competent Authorities.
    • To impose administrative and disciplinary sanctions provided by the law.
    • To issue regulatory Directives and Decisions.
    • To cooperate and exchange data and information with foreign supervisory authorities.

    How CySEC protects Forex traders

    Most Forex brokers in Europe are based in Cyprus and are subject to CySEC’s regulations, so it follows that many millions of Forex traders are directly impacted not only by CySEC’s rules but also by how well they enforce them. The most important regulatory benefits for customers of a CySEC-regulated broker are as follow:

    • Segregated Funds: All trader funds are kept in a segregated trust account which the broker cannot access. This prevents the broker from using trader funds for operational purposes. It also ensures that in the case of broker bankruptcy, trader funds can be returned.
    • Capital Adequacy: CySEC requires all regulated brokers to hold enough capital to meet the capital adequacy ratio requirement. This decreases the likelihood of broker failure in the event of significant losses.
    • Reports and Auditing: Because brokers are required to submit regular financial compliance reports to CySEC, it is very difficult for brokers to hide any wrongdoing. Similarly, because these brokers are also subject to independent audits and visits from CySEC investigators, any malfeasance will be exposed.
    • Compensation Fund: All CySEC-regulated brokers are required to join the Investor Compensation Fund Scheme. Under this scheme, traders are liable for compensation up to 20,000 EUR in the case of broker bankruptcy.
    • Insurance Coverage: CySEC demands that all licenced brokers maintain insurance coverage of at least 1.5 million EUR for losses resulting from negligence.
    • Transparency: CySEC expects to have a complete overview of all products that a broker is planning to offer, and that these products are the same as the products offered to clients.

    These protections are enshrined in regulatory law and brokers who are found to be in contravention are penalised and can even have their operating licence removed altogether.

    A useful resource for traders, CySEC hosts an up-to-date list of brokers that are legally allowed to operate in their jurisdiction, if you are concerned that a broker may be operating illegally, check CySEC’s regulated entities list.

    CySEC also publishes warnings on unregulated brokers operating illegally, many illegal brokers will often disguise themselves as regulated brokers so it is important to check here if you are concerned.

    CySEC and ESMA: Restrictions on Trading Conditions

    In March 2018, the European Securities Markets Authority (ESMA – a EU taskforce which examines EU-wide financial risk) announced new regulations on all CFD trading in the EU; these regulations were a directive at the supranational level – meaning that all EU members were required to abide by the regulations and enshrine them in domestic law.

    Cyprus, as an EU member state, must also abide by this new set of regulations and all CySEC-regulated brokers will have the following restrictions as a result:

    • Leverage Restriction: Maximum leverage of 30:1 on major currency pairs, 20:1 on all other pairs, 5:1 on equities, 2:1 on cryptocurrencies
    • Negative Balance Protection: All brokers must guarantee negative balance protection for all traders
    • No Bonus: All bonuses, promotions or any other type of trading incentive are banned
    • Margin Call: Brokers will be required to close a client’s open positions when the account equity reaches 50% of the required minimum margin by all open positions.
    • Risk Warning: All brokers will be required to display a standard risk warning showing what percentage of clients lose money with them.

    While traders and brokers were unhappy with the restriction on leverage, industry experts agree that the new ESMA regulations protect traders from making huge losses without critically damaging broker profits.

    CySEC vs FCA

    The Financial Conduct Authority is the United Kingdom’s financial regulator and is generally upheld as the best and strictest national regulatory authority in the world. Most good brokers will be regulated either by CySEC, the FCA or sometimes both.

    On paper, there is little difference between CySEC or FCA regulation – though the licencing fee for CySEC brokers is only 7,000 EUR, compared to 25,000 GBP for the FCA. Aside from that, both regulators require segregated accounts, membership of a compensation fund and have high capital adequacy standards. All brokers regulated by both authorities will have the same leverage restrictions and other constraints required by the ESMA regulation – though whether this continues to remain the case once the United Kingdom leaves the EU remains to be seen.

    The differences between the two regulators are mainly anecdotal, while the FCA is seen as unimpeachable when it comes to protecting consumers and being tough on brokers, many traders complain that CySEC is too broker-friendly and that it gives away operating licences too easily. CySEC also has a history of being easy on badly behaved brokers, with industry commentators noting that fines being levied by CySEC tended to be smaller than those handed out by other EU regulatory organizations.

    But since 2016, CySEC has made sweeping changes to both the registration and regulation processes of all registered entities. Changes include more transparency regarding existing listed entities, tougher fines and regular unannounced onsite visits from CySEC investigators to check compliance. This has led to a surge in broker suspensions and license revoking and CySEC is gradually losing its image as a light-touch regulator.

    Conclusion

    As the regulator with the most EU registered brokers, CySEC has a critical role in the Forex industry and millions of traders rely on their ability to ensure a fair trading environment.

    While in the past, this ability has been questioned, currently CySEC is seen as a leader in the Forex regulatory world and brokers with CySEC regulation should be considered safe and secure places for trading.

    Forex Risk Disclaimer

    Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

    Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

    Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

    Our Methodology

    Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

    With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

    In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.

    All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers

    Featured Brokers

    Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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