The Cyprus Securities and Exchange Commission (CySEC) is the independent regulatory authority responsible for overseeing the financial markets in Cyprus, including the foreign exchange (forex) market. It was established in 2004 and is a member of the European Securities and Markets Authority (ESMA).
CySEC’s regulatory framework for forex brokers is based on the Markets in Financial Instruments Directive (MiFID II) and its implementing regulations. MiFID II is a European Union directive that aims to harmonize the regulation of financial markets across the bloc.
Some of the key features of CySEC’s forex regulation include:
Capital requirements: CySEC-regulated forex brokers must maintain a minimum operating capital of €730,000. This is to ensure that the broker has sufficient financial resources to meet its obligations to its clients.
Client segregation: Client funds must be segregated from the broker’s own funds. This means that client funds are not at risk if the broker becomes insolvent.
Negative balance protection: Retail clients (as defined by MiFID II) cannot lose more than their invested capital when trading CFDs or forex.
Leverage limits: The maximum leverage that CySEC-regulated forex brokers can offer to retail clients is 1:30 for major currency pairs and 1:20 for non-major currency pairs and commodities.
Disclosure requirements: CySEC-regulated forex brokers must provide their clients with a number of disclosure documents, including a client agreement, risk warning, and order execution policy.
Forextime Ltd is regulated by the Cyprus Securities and Exchange Commission under License number 185/12. number 185/12 and Legal Entity Identifier (LEI) number 549300AOBWCBUX8I1R48, operating in harmonisation with the Markets in Financial Instruments Directive (MiFID II).
FxPro Financial Services Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission (licence number 078/07), the supervisory and regulatory authority for investment service firms in Cyprus.
Trading Point of Financial Instruments Ltd is licensed by CySEC under license number 120/10.
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About the Author
Charles is an experienced retail trader who has been trading since 2013. He has a comprehensive knowledge of the issues that inexperienced traders encounter. Charles specializes in swing trading and day trading, with a strong focus on psychological and fundamental analysis.