Most traders wonder about the licensing requirements in place before opening an account with a broker. This due diligence is an important prelude to any activity, as it ensures the safety of your investments whilst also safeguarding your funds from being abused. These two assurances are at the core of what FOREX watchdogs do. In what follows, we will present you with all the relevant information about the Cypriot FOREX regulatory body, the Cyprus Securities and Exchange Commission (CySEC). The organization is considered to be one of the better FOREX licenses out there, only second to the UK’s Financial Conduct Authority (FCA).
CySEC in Brief
The CySEC is the financial regulatory agency of Cyprus. As an EU member state, CySEC's financial regulations and operations comply with the European MiFID financial harmonization law.
According to several online sources, the CySEC has the following four main responsibilities:
To supervise and control the operation of the Cyprus Stock Exchange and the transactions carried out in the bourse, its listed companies, brokers and brokerage firms.
To supervise and control Licensed Investment Services Companies, Collective Investment funds, investment consultants and mutual fund management companies.
To grant operation licenses to investment firms, including investment consultants, brokerage firms and brokers.
To impose administrative sanctions and disciplinary penalties to brokers, brokerage firms, investment consultants, as well as to any other legal or natural person who falls under the provisions of the Stock Market legislation.
For FOREX companies specifically, the CySEC plays the dual role of upholding transparency and preventing scam brokers from robbing you. Given its excellent reputation, a rather significant number of FOREX brokers and binary options brokers from all around the world have obtained registration from CySEC. In fact, you will find more regulated FOREX brokers in Cyprus than any other jurisdiction.
How to Check If a Company Is Verified by the CySEC
Each Cyprus-based FOREX broker ought to be licensed by the CySEC. Details for this should be easily accessible on FOREX companies’ Websites, with each carrying a register number. In cases where a company claims it is licensed by the CySEC, you can easily verify this information by visiting the CySEC on the following URL: http://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/. If you find results, then the company’s claims of licensing are legitimate. Otherwise, the company in question is not licensed by the CySEC and should be avoided at all times.
General Broker Guidelines
Since its establishment in the early 2000s, the CySEC has distributed numerous guidelines and regulations on a whole range of trading activities. These include bonus circulars, new guidelines for cryptocurrencies such as bitcoin and directives for money laundering. Out of these, let’s touch on a couple of important examples to which a CySEC-regulated FOREX company must adhere:
A minimum of two individuals must be in charge of the administration of an investment firm, while also in the appropriate register.
Brokers with licenses must notify the CySEC before extending their services. Therefore, it is in the best interest of FOREX brokers to detail all the investment services they plan to offer at the outset.
In addition to the above, the CySEC can also set minimum capital requirements, bonus qualifications and leverage limits. Furthermore, brokers must meet regulations around indemnity insurance and ensure access to investor compensation funds.
Of course, if a broker fails to meet any of these requirements, their operation can be fined, and, in extreme cases, they can lose their license altogether.
Who is Arincen and What Are Our Services
Put simply, Arincen is a social networking platform that brings together traders and experts to exchange expertise and ideas. Collectively, we evaluate the best FOREX companies in the world while offering a comprehensive suite of services and tools, all in one place, either via a personal computer or a mobile app. Arincen offers a wide range of services, which include:
The latest in FOREX signals.
An online trading academy.
How to learn about FOREX.
An up-to-date economic calendar.
The platform is so rich that you can create your own private portfolio of traders and experts that you like and follow their recommendations and investment sentiments.
What’s more, thanks to Arincen, users can keep an eye on market-price developments, as well as the latest news. Users can also benefit from the network’s educational courses, to say nothing of the exciting Webinars – all done in a modern and fast-paced work environment. Get everything you need in one place. Arincen: We Meet to Simplify the Trading World.
Popular as it may be, the CySEC still has a long way to go before it starts enjoying the same high standing of the FCA in the UK. However, the CySEC remains a popular licensing body that continues to grow as a result of low barriers to entry and less stringent regulations.