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When Finland talking about Finland, the first thing that comes to mind is its magical landscape – northern lights, frozen lakes, fairy-tale-like Lapland, and snow stretching as far as the eye can see, so much so that one can barely see where the land meets the sky. On top of the wonders of nature that this country has to offer, it never ceases to surprise visitors with its vibrant and unique culture, which combines what seems to be the best from both dreamy old Europe and steely, ancient Scandinavia. Tourists from all over the world are constantly attracted to the Finnish winter wonderland, famous saunas, local cuisine, vodka, and vibrant customs and traditions.
However, there is more to Finland than merely sightseeing. This country is known for one of the strongest, most stable national economies. The ability to sustain it has translated into some of the best social welfare, and extremely high quality of life for its citizens. It seems like it was not even particularly surprising when Finland was repeatedly named as the country with the happiest population. The strength of the local economy has made it possible for the Forex trading in Finland to flourish. Although the FX market there is not nearly as extensive as in the other countries, it does, nevertheless, offer a lot of opportunities to both traders and brokers alike. Below you will find a detailed overview of the Finnish Forex trading market, top brokers available there, main regulatory measures, and the process of getting into trading there.
Which brokers made it on our list?
We know all too well that choosing the right broker to start trading with is never an easy task. Both the beginners and experienced traders alike might find a variety of choices extremely overwhelming. Moreover, when the FX market, such as the Finnish one, is not yet strongly established, the process of finding the broker that best suits your needs might feel even more stressful. For the purpose of making this a bit easier for you, we have created a complete list of the top brokers in Finland, which contains the information about the opportunities that they have to offer for their traders and the measures that they utilize to ensure traders’ safety.
How the best Finnish brokers ensure your safety
The main regulatory body responsible for overseeing the FX market is the FIN-FSA Financial Supervisory Authority. It was originally created to help the country tackle the 2008 global financial crisis and was established as a result of merging two separate bodies – Financial Supervision Authority (FSA) and Insurance Supervision Authority (ISA). The main functions of FIN-FSA include ensuring customer protection and sustainable financial development, as well as overseeing transparency, accountability, and smooth functioning of banks, insurance agencies, capital markets, and, by definition, the Forex trading brokers in Finland.
One can say, with all confidence that the body is doing a marvelous job at performing its key functions – the notion that is also well-reflected in an overall state of the Finnish economy. It successfully strikes a perfect balance between applying enough regulation to maintain safety and transparency of the FX market, while not limiting its growth at the same time. Since the Finnish FX market is regarded as a developing one, as opposed to the Forex trading giants, such as the UK and Germany, it is in a scarce need of government support in its gradual development, and the FIN-FSA does exactly that. We are now going to explore the way in which this regulatory body oversees the efficiency of Forex trading in Finland.
What does it take to obtain a Forex license in Finland?
The process of obtaining a license for Forex trading brokers is fairly similar to that of the other European countries. There is a number of conditions that they need to meet, and, upon doing so, they become officially licensed by the FIN-FSA. Nevertheless, despite a relative straightforwardness of the overall procedure, there are not too many brokers who are both licensed and based exclusively in Finland – and there is a reason for this.
Most of the brokers operating within the EU do no confine themselves to a single country. By doing that they do not necessarily want to go through multiple licensing processes in each country where they wish to start operating. For that reason, the Markets in Financial Instruments Directive (MiFID) and the European Securities and Markets Authority (ESMA) came up with a code of conduct that allows Eurozone-based broker to obtain a license from any EU regulatory body, and proceed to offer its services within the region, hassle-free. The most popular regulatory bodies are often the liberal, yet reliable Cyprus-based CySEC, harsh and exclusive Germany-based BaFin, and the prestigious UK FCA. Although this might seem like a security concern, it is actually the furthest thing from that. The standards issued by MiFID and ESMA are, indeed, sufficient to ensure that Forex trading brokers in Finland, both domestic and international, are offering reliable and secure services to their clients.
Fund security features with top Finnish brokers
The first regulatory measure that we would like to address here, is the one that is very common across the EU regulatory bodies and is confined exclusively to Finland. This measure requires Forex trading brokers in Finland to keep their own operational funds separately from those of their clients. There are a number of reasons for that, although the main one is still the desire to ensure the maximum safety of traders and their funds. To put it simply, by making it compulsory for brokers to segregate their funds from their customers, the Finnish regulatory body ensures that those funds are both not lost in case the broker goes bankrupt, and, is not misused by the broker, intentionally or otherwise.
On top of that, the FIN-FSA takes customer protection seriously enough to go the extra mile to maintain it. By doing that, the Finnish regulatory body requires its licensed brokers to keep investor compensation fund (ICF) at all times. Such a condition is also commonly used across the Eurozone, and it has already proven itself as a great way to make sure that traders are not suffering great losses in the event of their broker going bankrupt. Nevertheless, the amount of compensation can vary and will rely heavily on a number of different factors. We do, therefore, recommend that you do your due research, as in the end it may really pay-off as a safety in case of an unfortunate turn of events.
Public Awareness And Risk Disclosure
Another common practice of the regulatory bodies across Europe is making sure that the general public has free access to comprehensive and detailed information on every aspect of Forex trading. Similarly, the FIN-FSA ensured that its website provides a comprehensive guide to the licensed Forex trading brokers in Finland, an overview of the FX market and the breakdown of how it works, risks and opportunities of every type of trading, and, most importantly, the description of the possible scams and how to avoid them. Since the practice shows that it is the beginners who lack skills and knowledge of the market that are more likely to either get scammed or end up with huge losses, making information available to the public can definitely be regarded as a great preventive measure.
Moreover, the FIN-FSA is dedicated to preventing amateur traders from getting into the sessions in which they do not have a clear understanding of the financial risks involved. A good example of that would be the Contracts For Difference or CFDs. Although they are not entirely prohibited, the FIN-FSA does require Forex trading brokers in Finland to provide full disclosure of the risks involved in trading, so that the trader can make a clear and informed decision on whether or not they want to involve themselves in it.
Trading features and restrictions on them
Leverages are a subject of controversy when it comes to Forex trading, as they can both skyrocket one’s profits or result in devasting losses and debt that will have to be repaid to one’s respective broker. Such risky nature of its particular trading tool has made a lot of regulatory bodies across the world realized that in order to sustain the security of the traders, it is necessary to impose some sort of regulation upon the leverages. The ESMA was not an exception and the guidelines that are issued by this entity suggest that it would be best to keep the maximum leverage at 30:1.
Despite having clear guidelines presented by the ESMA, many counties chose to come up with their own caps on the leverages that their local brokers can provide. In Finland, the FIN-FSA allows for the maximum cap to be 50:1, which, by comparison, is definitely not as high as 500:1 that some of the countries have to offer, however, it is significantly more than the leverage cap offered by some of the other EU states. Since countries like Japan, have their maximum set at 5:1, thus, if you are a Finnish citizen with a certain degree of confidence in your skills and enthusiasm for leverages, we would recommend that you take advantage of the leverage regulations that Forex trading brokers in Finland have to offer.
A strict ban on bonuses
Bonuses and promotions that the broker provides can often be a deciding factor when the trader is looking for one to join. They are also a good way for the brokers to promote themselves and attract an extensive client base. There are two main kinds of bonuses that the brokers can provide – the welcome bonuses and the refill bonuses. The welcome bonuses are usually issued to the traders who have only just joined the new broker and are given out either upon the person signing up or upon making the first deposit. On the other hand, refill bonuses are a periodic gift that acts as a way of broker demonstrating appreciation to the returning traders, and those are gifted to the traders making consequent deposits.
It is, nevertheless, necessary to say that like other member states of the EU, Finland prohibits bonuses and promotions of any kind, as they are regarded as an aggressive marketing tool of something that can potentially become a risky investment. Traders who wish to join some of the best Finnish Forex brokers can still benefit from the relatively high leverages that they provide, however, if you are looking for the bonuses that will kickstart your trading experience, we suggest that you look elsewhere.
Is it too expensive to start trading Forex in Finland?
According to Finnish law, anyone above the legal age can get into Forex trading. The country is very careful in keeping immature traders from getting into something that can potentially result in a lifetime of debt. In spite of that, if you are of the right age and meet the requirements of the broker of your choice, the process of getting started will be fairly easy and straightforward. We do suggest that before diving deep into the Finnish FX market you do your research of what it encompasses and what are the risks involved. As previously mentioned, you will be able to find extensive information on that and much more on the official FIN-FSA website.
When it comes to the costs of starting to trade Forex, we can easily say that it is absolutely free. There will be no additional fees associated with joining a particular brokerage, and the only financial input that will be required from you is the deposit of the money that you wish to trade with. The deposit will vary depending on the Forex trading broker in Finland that you will end up choosing, and it can be anything between 5 USD and 500 USD. Once again, we highly recommend that you dedicate some time and effort to doing proper research on your local brokers and their individual requirements before choosing the one that suits you best.
Things we have learned about Finnish Forex brokers
As discussed above, there are a number of reasons why one should seriously consider joining a Forex trading broker in Finland. First of all, the country’s economy is the shining example of the success case, and thus, the opportunities it had to offer are plentiful. Secondly, the local regulatory body does a great job of finding a perfect balance between ensuring the security of the traders and the sustainable growth of the market. Finally, the leverage limitations here are much higher than those of the other EU countries, which would definitely come in handy to the more experienced and confident traders.
Overall, it is easy to recommend this country as both some of the best Forex platforms in Finland offer a plentiful of opportunities for profit. If you are a Finnish citizen – look no further and explore the opportunities that your country has to offer.
