If a Forex Broker wants to operate legally inside European Union and attract EU traders, he must obtain an EU License to offer financial services such as Forex and CFD Trading Services from an EU state member.
This type of License is provided by a government department responsible for financial institutions’ regulation (such as banks, brokerage firms, etc) called the Securities Commission.
Although many offshore forex brokers do offer forex and CFD Trading services to EU traders, this is an illegal practice.
Serious CFD Brokerage firms like Plus500 do posses a valid EU License by a Securities Commission Member State.
The most common Licensing Jurisdiction for EU Forex Brokers is Cyprus and a significant number of Forex Brokers has obtained a License from CySEC.
CySec Forex Brokers (Update 2021)
1.) EToro – Innovating Social Trading Broker
EToro Review
- Regulated broker (CySec, FCA, ASIC)
- Best broker for Social trading
- USA friendly only for Cryptocurrency Trading
- 50+ forex pairs, 950+ CFD Stocks
- EU, UK and Australian Traders Accepted
EToro is a leading trading platform founded in 2007.
Licensed and Regulated in various jurisdictions (such as Cyprus, UK, USA and Australia), they’re quite popular because they have a leading copy trading platform where a trader can copy the orders of other traders.
Why EToro is no1 in Our Ranking List?
- Because EToro is pioneer in Social Trading. In their custom made easy to use platform you can copy proven successful traders.
- Because in EToro you can buy real shares (Be the owner of the underlying asset), creating a long term portfolio under your name.
- Because in EToro you can trade CFD instruments (Forex, Shares, Commodities, Cryptos) with leverage.
- Because EToro is a fully regulated broker offering the higher level of security
2.) Admiral Markets: MT4 & MT5 Trading Platform
Admiral Markets
- Regulated by CySEC, FCA and ASIC
- MT4 & MT5 Trading Platform
- Scalping, Hedging and Expert Advisors
- 40 Forex Trading Currencies
- Over 3350 Stock CFD to trade (Trade.MT5)
Admiral Markets is a leading online trading service provider, offering Forex and CFD Trading on indices, metals, energies, stocks, bonds and cryptocurrencies.
Why Trade in Admiral Markets?
- Because it has MT4 & MT5 Platform
- 7500 Trading Instruments Available
- Hedging, Scalping and Expert Advisors Accepted
- Huge Educational Material
- Start with a minimum Deposit 100€
3.) Plus500: A Popular CFD Trading Broker
Plus500 Trusted Review
- A popular CFD Broker in Europe, UK and Australia
- 2100+ popular CFD instruments
- Mobile, web or tablet trading
- Paypal Deposits & Withdrawls
- State of the Art Reliable Company
Plus500 is a reputable CFD Trading platform with regulated in many Jurisdictions, including CySec.
Although Plus500 doesn’t provide trading services to clients based on Canada and the USA, it is a very popular trading platform with thousands of traders in European Union.
Plus500 is available to EU and European traders can trade 2100+ CFD instruments including popular stocks, forex, indices, commodities, and cryptocurrencies.
Why Plus500?
- Because Plus500 offers a high number of CFD trading instruments
- Because Plus500 is a secure trading broker, regulated in popular jurisdictions
- Because thousands of traders before you, have already selected Plus500
IQ Option
IQ Option is a CySec Regulated Forex Brokers that accepts EU Traders.
IQ Option offers a variety of CFD trading instruments including Forex Pairs, Commodities, Shares, Cryptocurrencies, EFT’s, Indices
Why IQ Option?
- Because IQ Option is a fully CySec Regulated
- Because IQ Option is a Safe Trading Environment
- Because IQ Option is a great Plus500 alternative, even though it offers a lower amount of available CFD Trading Instruments.
MiFID II Directive and Forex Brokers (Read Carefully)
Every Brokerage Firm that offers trading services to EU Clients (Germany, Spain, France, Italy, Greece etc), has to follow MiFID II Directive.
This directive should be followed by all EU Licensed Forex Brokers, (CySec Licensed or elsewhere in Europe).
Forex and CFD Trading Brokers under the MiFID Directive have to follow extensive requirements such as:
- They cannot offer deposit bonuses: At the old ages of Forex Brokerage, Brokers were offering bonuses (1st Deposit Bonus, Reload Bonus, no deposit bonus) and other promotions. Now this is not allowed for EU Forex Brokers, UK Forex Brokers, Australian Forex Brokers. Only unregulated (offshore-based) forex brokers can offer such promotions to new and existing traders.
- They are obligated to provide Risk Disclosure: Every EU Forex Broker should provide a risk disclosure, such as: “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. ..XXX..% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.” It is broker obligation to inform traders about…
- They must classify traders into 2 profiles: Professional Traders vs Retail Traders. Professional Traders’ eligibility should follow some criteria. A higher leverage level (to all instruments) is offered to Professional Traders.
- They face leverage limitations: Retail traders in EU forex Brokers enjoy low leverage levels. In Forex Pairs, they enjoy 1:30, in shares 1:5 and in cryptocurrencies 1:2. On the other hand, offshore brokers offer by far higher leverage levels, (up 1:3000 in some cases). The same happens when trading to crypto brokers, they offer bitcoin trading for 1:100 leverage, or even 1:200 leverage.
- They have to follow stronger standards regarding communication, such as keeping archive of all electronic client communication, keep records of phone calls etc.
- They have to follow strict KYC processes: They ask KYC Verification before a trader deposits money to their account. This means that a trader should send them a Government ID Card and a Utility Bill (proof of address). Of course, there are traders that want to avoid KYC Verification, for them up to today there are some solutions.
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