A small island in the Mediterranean Sea, Cyprus is well known for its picturesque locations, vibrant culture, centuries-long history, and a fascinating mixture of various customs and traditions. What many do not know, is that this particular island-nation is regarded as one of Europe’s most prominent financial hubs. By definition, this translates into the rapid growth of the Cypriot FX market, which is attracting thousands upon thousands of traders and brokers from all over the world. It is, however, necessary, to note that Cyprus has not always been recognized as the world’s leading FX destinations. Until recently, lack of proper regulations and government involvement has forced the FX market in Cyprus away from the long-awaited spotlight.
One might be wondering how did Cyprus go about transforming from the largely unregulated, blurred, and, often dangerous nature of FX trading, to being among one of the most promising and safest markets in the world. As it was the case with many other countries of the world, the success story of this country relied heavily upon the efficiency of the regulatory and improvement measures put forward by the local lawmakers. Read our guide below to find out more about the nature of such regulations, the opportunities that the Cyprus FX market can offer, and an overview of the best brokers there.
The rapid growth of the Cyprus Forex market has inevitably led to the influx of a variety of brokers. While many of them are, indeed, legitimate, someone with little to none experience in Forex trading might find it quite stressful when faced with a necessity to navigate among the large amounts of various brokers available. Below, we provided a complete list of the best brokers currently available in Cyprus, and a brief overview of their main features, which, we hope, you will find useful.
CySEC, IFSC, ASIC
100 currency units
CIMA, FCA, NFA
As mentioned above, Cyprus has not always been the Forex market safe haven, To the contrary, lack of proper regulations and the local government largely overlooking this particular segment of the national economy has led to Cyprus, at some point, to be one of the most dangerous places for those who were seeking to get deep into trading Forex. Financial scams were occurring on daily basis, and those who suffered great losses had no place to seek justice or compensation. Nevertheless, Cyprus lawmakers have managed to turn the situation over and make local markets into one of the few, if not the utmost efficiently and successfully regulated. What this refers to is not necessary the strictest or the most all-encompassing measures. What Cyprus managed to achieve is striking the perfect balance between ensuring the transparency and accountability of the Forex market, all while not compromising its future development and growth by unnecessary regulations.
Cyprus Securities and Exchange Commissions (CySEC) is a body that has long become synonymous with the trading safe haven for brokers from all over the world. Established in 2001, this independent public supervisory authority is responsible for overseeing a whole variety of operations and entities, ranging from brokers, investment fund management, investment consultancies, regulated markets to the Cyprus Stock Exchange, and the bodies associated with it. But what makes it so attractive for both local and foreign brokers?
Originally, CySEC provided one of the most relaxed regulatory measures of Forex trading across the world. Despite being seemingly less harsh, those measures have, nonetheless, succeeded in ensuring customer protection and safety of transactions and funds associated with Forex trading. What that meant was that Cyprus was among the pioneer countries that found a perfect balance between having enough regulatory measures in place to ensure the transparency and accountability of the Forex market, but not too many to actually prevent it from growing as a segment of the national economy.
On top of that, as soon as Cyprus was accepted as a member of the European Union (EU) in 2004, the CySEC has quickly begun reintroducing its regulatory measures in compliance with the Markets in Finacial Instruments Directive (MiFID). This development ultimately translated into the CySEC being widely recognized as a legitimate and reliable regulatory body, that has nevertheless managed to retain its more relaxed nature, which, in turn, was now attracting both the Cypriot brokers and those operating in the EU Zone.
We will now provide you with a short overview of the regulatory measures that illustrate that despite being perceived as a largely relaxed regulatory body, CySEC does not cease to continue its functions in a highly efficient and comprehensive manner.
This is a fairly common requirement and you are bound to come across virtually any regulatory and license-issuing body across the world. The purpose of such a regulatory requirement is to ensure that the broker is never operating a step away from being completely out of money. Such a condition would hardly be secure for either the broker, or the traders that it caters to, and, since the FX market is already quite unstable, and, more often than not, subject to volatility and various fluctuations, enforcing the minimum operating capital rule is a good way of providing some security for when things take an unpredicted turn. In Cyprus, the minimum operating capital has been increased from 75 000 EUR to 100 000 EUR, and brokers should be maintaining it at all times, or face the consequences.
Another common regulatory practice that can also be witnessed in the operations of the CySEC is the constant reporting and auditing of the FX market. This particular measure consists of several important components, such as having brokers provide timely and detailed audits, which covers virtually every aspect of their daily operations. On top of that, the CySEC is working closely with every actor involved in the Forex market, to create a full picture of what are the current shortcomings and how to correct them effectively. For that reason also, the CySEC has created a comprehensive system for reporting faulty brokers and ensuring that they are penalized justly. The CySEC refers to this system as “whistleblowing” and claims that it allows everyone to submit their reports without hesitation and hassle-free. Finally, the CySEC is always looking for ways to enhance the Cyprus Forex market, which is why it often conducts its own research and issues reports with recommendations for further improvements.
As you can probably tell already, the CySEC takes the protection of brokers’ clients very seriously. Since brokers are always running on a high risk of getting bankrupt, the CySEC has a number of rules in place to ensure that if that unfortunate event occurs, the traders will not find themselves in a state of complete devastation. For that reason, this regulatory body has two main measures in place. The first one is the fact that brokers should be keeping their funds in a bank account separate from the one where the trader’s funds are kept. This measure, although seemingly bureaucratic at first sight, does actually contribute greatly to the safety of the trader’s financial property. The second measure is that of investor compensation fund (ICF), which exists for the sole purpose of making sure that every trader is compensated with 20 000 EUR in case the broker goes bankrupt. Both of the measures stated above can also be considered as a common regulation across various regulating bodies of the FX market.
Conflict of interest is often inevitable in almost every sphere of our lives, let alone the sphere related to finances and profits. However, its inevitability and frequency do not make it acceptable when it comes to the Forex market. With the growth of reported cases of brokers creating themselves favorable conditions for profit at an expense of its traders, the CySEC has made it its mission to ensure that no such cases will ever occur. Hence why. the reports and strict control of the broker’s operations that the regulatory body requires to be reflected in the audits that it receives.
To put it shortly – not too many. CySEC prohibits bonus offerings and forces Cyprus brokers to put the main emphasis on other, more significant, terms and conditions of trading. Nevertheless, for the purpose of helping you make an informed decision about the broker of your choice, we will provide you with an overview of the kinds of bonuses that brokers elsewhere might have.
Although, without a doubt, extremely important – countries Forex market regulatory bodies and licensing process is rarely the single most prominent deciding factor for traders who are looking for a broker to join. The FX trading is, without a doubt, a risky enterprise and unsurprisingly, what people are usually looking for are certain features that will help them elevate their overall trading experience and increase chances for lucrative profits. Often, it is the bonuses and promotions offered by the local brokers that act as such boosting features. Below, we will provide you with a brief description of the most common bonuses and promotions that brokers usually offer to their traders. It is, however, necessary to keep in mind that all of the features described below have their own advantages and disadvantages, and the potential Forex trader considers their own trading needs before choosing what works best for them.
Broadly speaking, the bonuses that we are about to explore can be divided into two main categories – welcome and refill bonuses.
Welcome bonuses are provided to the traders who are first joining a specific broker, and they usually act as a token of gratitude. They, too. can be divided into two main categories. The first one is the first deposit bonus, which, as evident from the name, is granted to the trader immediately after the first deposit has been made. Similarly, the no-deposit bonus is also provided to newly joining traders, however, unlike the previous one, it is usually gifted upon the registration and does not require any deposit to be made. Both types of welcoming bonuses are a great way of elevating one’s overall trading session or provide some sort of financial safety in case the session goes unexpectedly wrong. Welcoming bonuses are not exclusively available to the beginners only, as experienced traders are often looking for alternative brokers to cooperate with, and, more often then not, welcome bonuses act as a single most important deciding factor in making that choice.
Refill or redeposit bonuses are usually used as another tool of marketing that Forex brokers are particularly fond of. Unlike welcome ones, refill bonuses are given to those traders who are coming back and making subsequent deposits after the initial one. Their aim, is, therefore, the formation of a lasting partnership with the existing traders, rather than the attraction of the new ones. While those bonuses can too act as a booster of trading- produced a profit, there are a couple of things you should know about before getting too excited. You will not be gifted that complimentary money every time that you make a deposit – they are usually announced in advance and will be given out every now and then. On top of that, the bonuses may increase depending on how large your next deposit is – but this amount is not infinite and often has a limit.
According to the Cypriot law, you have to be 18 or older to start trading Forex, thus, anyone who falls under this requirement can start doing that hassle-free. When it comes to the costs of getting into FX trading in Cyprus – there are none. What this means is that there are no fees for registering with a broker, with whom, consequently, you will start trading. The financial input that you will definitely be looking at though is the deposit that you will need to start actual trading. That too can vary, and in some cases, it could be as little as 1 USD. Nevertheless, most licensed FX brokers in Cyprus have their own minimum requirements for the initial deposit, and it can be anything between 15 USD to 250 USD. Those minimum requirements should also be taken into consideration when looking for the Cyprus FX broker that best suits your interests.
As mentioned above, Cyprus has made a long journey from being the perfect environment where scammers could flourish to becoming one of the safest – and most attractive FX trading destinations in the world. Although its regulatory measures are regarded as less strict in comparison to the other regulatory bodies, they are nonetheless treated as trustworthy and efficient in ensuring the safety and transparency of the Forex market. The latter is constantly evolving and expanding, and the Cypriot regulatory body has already made it its mission to both facilitate this growth and enhance its security measures simultaneously. Such a combination makes it very easy to recommend trading with Cypriot brokers, especially if you are looking for a vibrant market with a lot of potential for lucrative profits.