Some Seriously Regulated Forex and CFDs Brokers

CySEC Regulated Forex Brokers

The Cyprus Securities and Exchange Commission, the non-governmental public finance watchdog, is responsible for supervising registered Forex brokers, financial service providers, financial advisers, investment services, as well as any other activity in the Republic of Cyprus. The organization was born in 2001, in accordance with section 5 of the Securities and Exchange Commission, then in 2004 its laws and regulations integrated into European financial laws “MiFID” allowing all its members to extend their commercial interests in all of Europe.

CySEC is managed by a board of directors composed of five members, appointed by the Council of Ministers on the proposal of the Minister of Finance. CySEC is considered a pioneer in establishing new and innovative regulatory policies for the development of financial markets.

CySEC was the first regulatory authority to advertise “binary options” as a legitimate financial tool, setting a good example for many other financial authorities to consider and recognize binary options brokers as viable. The organization is taking the necessary initiatives to regularly update its overall regulatory framework in order to protect customer assets in the safest and most reliable way possible, in this way, CySEC aims to build a global reputation and attract more investments.

CySEC Responsibilities

CySEC, as expected of any other regulator to ensure the security of funds and the peace of mind of their clients, is responsible for regulating the structure, functions, powers, organization of the Securities and Exchange Commission and relevant financial activities that fall under article 25 of the law, published in 2009. CySEC is also empowered by “the law on public offer and prospectus of 2005”, the law of 2005 on insider dealing and market manipulation (market abuse), the 2007 law on takeover bids, ”and“ 2007 law on transparency requirements (transferable securities admitted to trading on a regulated market ”). Therefore, CySEC supervises the following activities:

• It has the power to examine, grant, suspend or cancel the licenses granted.
• Examine the general state of operations of the Cyprus Stock Exchange and the transactions of other financial parties in Cyprus.
• Make sure agencies fully comply with the law.
• Conduct regular investigations to guarantee the role of domestic and foreign authorities in financial activities.
• Request from registered organizations the information required to verify the legality of their operations.
• Administer sanctions, take disciplinary measures or completely stop actions if they do not comply with the laws.
• CySEC should also work with other public regulatory authorities in Cyprus regarding the exchange of information.

CySEC Investor Compensation Fund (ICF)

The Investor Compensation Fund was founded within the framework of the CySEC organization to reimburse clients in the event of failure by ICF members to fulfill their obligations towards their clients. This program was set up to protect customers by reimbursing their assets if their claim is justified. The Investor Compensation Fund can be applied to all clients, Cypriot residents and foreigners who have received services from ICF members.

When the legitimacy of the client’s claim concerning the crime of an ICF member is proven beyond a reasonable doubt, the ICF is ready to pay up to 20,000 euros to cover losses. The amount of compensation applies to the entire claim regardless of the type of currency of the client, the number of accounts or the laws concerning the place of services. CySEC would request the member’s presence for further investigation within a short time (usually more than three days) which, in some cases, may be up to three months.

CySEC then launches the compensation process after having proven the negligence of the ICF member regarding the claims of its clients. An invitation (via at least three national newspapers) will be sent to insured customers to file their claims against the ICF member concerned. Applicants must include their name, address, telephone/fax number, e-mail, company code with ICF, name of ICF member, covered services (copy), account, statements/deposit and withdrawal documents, amount of claim, proof of claim and any other required information.

Then, the complaint is assessed by a qualified accountant and one or more lawyers who are knowledgeable about the legitimacy of the complaint. Applicants can complete the online application form on the CySEC website or simply submit a letter of complaint to the ICF offices with all the required information (as mentioned above).

The letter can be sent by post or delivered personally to this address: “Investor Compensation ICF for IF Clients, 27 Diagorou Str., 1097 Nicosia, Cyprus”. Complainants should carefully review the Investor Compensation Fund guidelines and directives to ensure that their claim is legitimate, otherwise, their claim will not be accepted or even after receiving the amount of compensation, they must return it to the ICF under review.

How to check a CySEC regulated Forex broker?

CySEC has listed all Forex brokerage companies on its website so that everyone can access and confirm their license and regulations if necessary. For this purpose, go to the page of Cypriot investment companies on the official CySEC site, a search box will appear. All you have to do is enter the name or license number of the Forex broker you are studying. As soon as you start typing the name, a list of companies with similar names may appear, you can scroll down to locate the exact company you are looking for. Once you have located the company in question, you can click on its name and be redirected to the appropriate page for more information. There is also an alphabetical list (A-Z) just below the search field which can be used to refine your search.