Best Cyprus Forex brokers

Brief History of Forex Trading in Cyprus

Long before earning a reputation in the forex trading industry or joining the European Union, Cypress was a little-known Mediterranean island. The country was only famous for being a European tourist destination and for harboring several myriads of offshore bank accounts as well.

The low tax tariffs and rates imposed on businesses and joining the EU in 2004 turned Cyprus into a favorable economy to invest in, especially for British, Russian, and Eastern European investors. They sought to have the headquarters of their businesses set up in the country and yet continue doing business in their home country to avoid high taxation. In the year 1988, CySEC was initially established and then began issuing licenses to the first brokering firms to be established in the country.

Although the Fx Trade had already gained traction in Cyprus, it took quite several years for what gave the country its dominance in the industry to unfold. Many retail and electronic FX brokerage firms had adopted the all-round MetaTrader4 software platform which was developed by a Russian company Meta Quotes and which by then was operating in Cyprus.

Though in the early stages, resultant development was initially slow, the developer decided to take the platform to Cyprus as well. The laws and regulations on forex in Cyprus turned out to be cheaper with a fair regulatory framework that welcomed the new tech. CySEC was open to letting the new FX firms which came in with most of them being in their start-up stages. CySEC also allowed white labels of firms that were not yet under regulation to apply for licenses from them. What the regulator offered was quite similar to the European regulations and this opened the doors of Cyprus Forex market for clients in the rest of Europe, especially MiFID signatory nations. Consistency with MiFID rules enabled CySEC-regulated brokers to attain registration from the British regulator FCA.

The 10% corporation plus cheap rates for office rent lured several firms and now the regulator focused on retaining the brokers in their country and providing easier ways to control the trade just in case things went wrong which was negligible as compared to what measures regulators in other markets had to put in place.

Regulation of Forex Trading in Cyprus

The regulatory body for financial markets in Cyprus is the Cyprus Securities and Exchange Commission. CySEC regulations are aligned with the Markets Financial Instrument Directive (MiFID) of the European Union 2004. MiFID is a set of regulations intended to create a template of sorts for regulations governing financial markets in the 31 EU member states. Compliance with the MiFID framework has led many companies have sought to be under its regulation as it allows them to operate throughout the EU. A keen observer of the forex market may take notice of the fact that many forex companies and binary options brokers are regulated by CySEC.The majority of traders in the forex world consider CySEC regulation as a standard of quality that can ensure the safety of their investments.

As years went by, CySEC regulation has observed exponential growth with an increase in the number of registered brokers and improvement of their regulatory framework concerning particular services. As a result, many regulatory authorities in the EU are keenly observant to catch up with the Cyprus Securities Commission. Over the years, Cyprus has continued to be a top market for CySEC regulated Brokers who are attracted by its favorable regulations and taxes. Eventually, the Cyprus market was swarmed by scammers and fraudsters. It became harder to distinguish between genuine irregularities or malpractices by some brokers with financial fraud. The setup was letting off culprits too easily to the detriment of traders who fell victim to these scams. The regulator was protecting the brokers over the traders. Eventually, CySEC was forced to tighten its regulatory framework. In 2013 there was growing concern that CySEC regulations were too relaxed. The regulator in turn struck an iron hand on its operations and began severely fining companies involved in malpractices. In 2016 IronFx was heftily fined a sum of  €335,000 for administrative breaches which would have cost them a mere €5,000 Before 2013. On top of that the regulator has revoked its Cyprus Investment Firm (CIF) licenses from brokers involved in malpractices such as CommexFX in 2015 and Falcon Brokers. The regulations imposed by CySEC are relatively applicable throughout Europe and some of them include.

1. Brokers under CySEC need a minimum of €750,000 in operating capital which wasn’t the case in the past. This new rule specifying the operating capital is reinforced by the MiFID directive requiring the brokers to be able to hold their customer’s positions without easily being affected by the volatile market.
2. Brokers must regularly update financial statements which are submitted to CySEC for review. They are expected to submit annual audit reports from authorized independent third-party auditors.
3. CySEC brokers must keep traders’ capital in the top, tier-1 banks within Europe in segregated accounts. This avoids mixing up of the trading capital with the brokers operating capital ensuring that operations are conducted transparently.
4. Brokers must observe all new rules that CySEC and the MiFID may adapt as time goes by.
5. CySEC forex brokers must protect their traders from insolvency and bankruptcy by securing them under an Investor Compensation Fund(ICF) which offers compensation of up to €20,000 if a broker is rendered insolvent it enables the traders to secure a significant amount of their trading capital.

Features of Forex brokers in Cyprus

Naturally being a world leader in forex and financial markets one would expect that the brokers operating in Cyprus come up with special features to cater to the large numbers of traders relying on their products.

Trading Platform Features

Brokering firms in Cyprus are synonymous with online platforms which are available for PC, Mac, Web, and mobile apps. These run on all operating systems for computers and mobile smartphones. The brokers have personal account managers and multi-trader platforms as well. The MetaTrader4 comes with an in-built charting package used by most brokers in Cyprus and is also available across all the systems both online and for apps on smartphones. Another commonly used platform is SiriX web trader used by IronFX for social forex trading. Several brokers also have the Meta-trader 5 platform available for example FXTM.

Spreads and commissions

Some of brokers offer a variety of spreads and commissions for trades conducted on their platforms depending on the category of the account being used by the trader, the accounts are classified into Standard, Vip, Silver, Bronze, Gold, or Platinum. Spreads and commissions vary according to the currency pair the trader has chosen to transact.

Deposit methods

Traders using Cyprus brokers have several options available for depositing or withdrawing funds from their accounts.

1. Both credit and debit cards are accepted by most firms these include MasterCard, VISA, and Discover but the credit card method is restricted to independent traders.
2. Bank wire transfers.
3. Some brokers allow Chinese traders to can make deposits and withdrawals via UnionPay.
4. Electronic payment methods such as PayZa, UKash, and Neteller among others

For all the transactions conducted charges levied vary depending on the broker. However, there are certain limits imposed for the amounts that can be transacted depending on the account type.

Alternative To Local Cyprus Forex Brokers

Ordinarily, few traders dealing with Cyprus-based forex brokers would opt to go for other traders. This is mainly due to the extremely favorable conditions and market in the country. However, one could alternatively go for brokers based in the UK, Italy, Sweden, or even France. All reputable brokers based in countries that fall in the EU jurisdiction of MiFID are a good alternative to local Cyprus firms.

Popular Forex brokers in Cyprus

FOREXTIME (FXTM)

This broker has among the best execution records in the industry, the broker enables traders to carry out trades in a very short time. FXTM has among the highest leverage ratios in the business up to 1:1000 which enables traders to earn more than usual. FXTM unlike other brokers does not charge fees for deposits and provides instant withdrawals which saves time.

XM

The Cyprus-based broker has favorable conditions for trading in various instruments such as commodities, CDFs, and currency available on both MetaTrader 4 and 5 platforms. It has fast execution speeds of less than one second as well as nice bonuses and promotions. XM Forex broker is a franchise of Trading Point Holdings Ltd, which wholly owns Trading Point of Financial Instruments UK Ltd (XM UK, Australia, and Cyprus). XM guarantees compensation for all the traders on their platform of up to 50,000 pounds under the UK's Financial SErvices Compensation Scheme (FSCS) and Cyprus’ Investment Compensation Fund (ICF) as well which offers up to € 20,000.