Best Forex Brokers in Turkey

Since Turkey is not an EU member, the only way these brokers operate legally is by using the Capital Markets Board. Despite being obliviously well-mannered and good-intentioned, the CMB is marred with chaotic measures of enactment, hence stirring up the waters. This saw several account changes for smallholders in January 2016, on some commodities and currency pairs, 50:1 leverage on some commodities, and some having a 25:1 drop. These measures were erected to protect novice traders who were vulnerable to huge losses.

A brief history of Forex Trading in Turkey

Today’s Forex trading system is a lynchpin to yesterday’s history of Turkish Forex trading globalization. Nonetheless, the road to this new era has been murky, tremulous, and filled with a couple of mistrials. Under these scenarios, one might preclude gigantic volatility in the Forex trading rates. Obsessively, it was a different case. Pre-emptive conclusions were correct for this modern financial architect. Settling on a smooth transition from an imperialistic money system to the issuance of a national financial module prevented Forex chaos in Turkey.

In this pre-Republic passage period, the FX rate period was referred to as a floating module but with prior cautions. Preventing inflation was far from achievable due to the lack of a body that could control the FX market. It was a common behavior for banks to value gold and there was a low global FX rate volatility. The reference currency for this period was Pound Sterling (which kept its position until 1950 to be replaced by the US dollar) with a rate of GBP 1 = lira 0.888.

Turkey's Forex industry is regulated by the CMBT, the Forex regulation agency, that comes up with objectives and by-laws to govern Forex traders. The main aim of this body is to ensure investors are protected against any malpractices and fraudulent dealings. Brokers must therefore adhere to these regulations or risk facing the long arm of the government. The CMBT is well structured and detailed mirroring the global rules of capital markets. Turkish authorities passed and enacted the Capital Market Law that ensures all the legal frameworks and operational protocols are supervised and financial firms regulated.

CMBT's main role is ensuring transparency of financial institutions and markets using a proactive system to achieve a strong balance between demand and supply in the market.

Through fairness and improving its competitive edge, CMBT is emulating a new era of the financial infrastructure that correlates with modern regulations, not leaving out the ones used by the EU MiFID entities.

Turkey commits to adhere to all MiFID directives and enact the money laundering rules. Thus Forex brokers in Turkey that are regulated by the CMBT are known to be among the best agencies that work with the client’s best interest without defrauding consumers. CMBT understands that there may be pitfalls in Forex markets and has come up with strategies of ensuring that investors have resourceful information regarding risks that arise from using leverage Forex markets that are highly volatile.

The president of CMBT has been quoted on record talking about the market risks and that about 12% of traders have tried investing in FX retail market. He's gone on to say that 88% of traders are at a high risk of experiencing losses because of high leverage that wipes out their trading capital by just a small difference in percentage change in pairs of currency prices. CMBT understands that there may be implications that come forth due to advertisements that lure trade amateurs into the world of foreign exchange trading in the pretense of instant wealth.

A varied influential figure in the government of Turkey is seeking reforms in trading rules relevant only to brokers regulated by the CMBT that offer trading and financial services to Turkish investors. Changes in advertisement rules in conjunction with tweaks in the existential trading conditions are deemed as actionable alternatives which aid in reducing trading risks for modern investments. CMBT has made it clear that for a Forex broker to operate in Turkey, they must be issued a license from CMBT, and any broker with no valid license is banned from providing Turkish citizens with such services.

Turkey is a newcomer in Forex regulation. However, since 2011, a new regulatory body was introduced and has been in play. At first, Forex brokers had permission to carry out their services without a license in Turkey until broker scams broke out. Before this Turkish Government, had no say regarding fraudulent practices by traders preceding the regulations. This led to the formation of a core premise upon which Turkey was able to adopt an organization to curb financial scams. This regulatory organization was efficient and strict. The country is now acclaimed globally as a country that turned around its misfortunes in FX into a treasure.

Regulation of the FX Market in Turkey

CMB (Capital Markets Board) currently released other announcements via their website. They stated the seven lucky companies that have the authorization of continuing FX operations using temporary licenses as well as stating obligated articles used in customer agreements. This was in the last two releases.

To avoid previous mishaps, the CMB offered viable options. It was clear that the earlier companies have stepped out in grabbing pioneer licenses and making good use of the market’s big gap. CMB had warned every foreign broker to stop their actions, and failure to do so would see them face criminal sanctions. In addition, CMB's announcements of FX regulation were disconcerting to clients (in every aspect of law and tax). Most of actors in the market are held back from sending money abroad and thus have to work with any foreign broker.

The list below shows the lucky seven Forex brokers:

1. Destek Securities
2. Anadolu Investment
3. Is investments
4. Gedik Securities
5. Integral Securities
6. Yapi Kredi investment
7. XTB Securities

Another major announcement by CMB was that of client agreements. CMB wanted clear AML and KYC procedures with clients as well as stating every technical detail that should be included within client agreements. Moreover, they needed all the information to be put in writing on how brokers make money:

1) Market Makers should clearly state their counterparts for every trade, and clients' earning is the company's loss and every client's loss is the company's profit.

2) White Labels: there are no procedures to run as White Labels but by CMB they should state that they’re taking orders as representatives, but fiscal technical responsibilities that arise from clients’ transactions are to be handled by themselves.

Currently, some Forex brokers have valid CMBT licenses to cater exact requirements of Turkish traders and investors. Though retail FX trade isn’t controlled by any means, Government officials believe that Forex Markets are designed precisely for large institutional investors and industries. Thus, there are higher chances that CMBT, together with inputs from the Turkish legislature, will curtail trading freedoms and adopt several various trading conditions which might restrict freedom that was offered to retail Forex trading. The brokers under CMBT ought to be considerate as this organization is creating a good working relationship with the clients. The rules include segregated accounts for clients, investor protection funds for clients, advertisements under ethical practice, and routine auditing. This will reduce the cases of scams that have hit the Forex trading industry.

Limitations and comparison to other countries/scams

In Turkey, Forex trading laws are stringent as compared to other countries. This is seen as an effort by the country to be included in the EU. Turkey’s authorities continue to uplift their efforts of ending scams on Forex trading.

The Turkish government has enlisted a set of rules on traders who use leverage. This law was enacted in line with the initially tailored law set to check on local currency speculation.

Turkeys’ Forex trading brokers are not allowed to open foreign accounts in other countries, unlike some countries like the U.S. Violating this law could lead to a hefty fine from the government.

The law forbids Turkish citizens from opening an account with any broker that is not under the CMBT (Capital Markets Board of Turkey). This is not the case with most countries in the EU.

Sources that understand Turkish law find this new law questionable. Nonetheless, that hasn’t deterred the Turkish government from the enactment of the law. In a recent talk show, Turkey's Finance Minister concluded that such a law barring citizens from having foreign accounts doesn’t exist. It is a fallacy, so to say. However, the government still follows up on any leverage speculations and puts the culprits to book. This has led to a drastic fallout in existing leverage for novice retail traders. In just two weeks, local subsidiaries were suspended by the body: Saxo Bank and XTB.

Popular Brokers in Turkey

Is it possible to find a reliable broker to deal with in Turkey? Yes. Look no further than the Top Broker's list of the best Turkish Forex brokers. The list is a manifestation of their own Forex trading research from the industry and feedback collected from their esteemed readers. Scores of brokerages possess CMB licenses and thus operate legally on the Turkish Forex trading scene. These are the top five.

1) Easy markets - It was founded in 2001 and has been active ever since. More than 300 markets can be traded. It's regulated by Cyprus Securities and Exchange Commission and Australian Securities and Investments Commission. Can be accessed through Web, MT4, and easyMarkets Trading App

2) Plus500 - This is a multi-asset trading platform. It was founded in 2008. There is no timeframe for demo accounts and is well regulated. Can be accessed through Plus500 platforms.

3) Cityindex - This is a well-established, beginner-friendly platform founded in 1983. It provides free webinars to clients to improve their knowledge of Forex. It's regulated by ASIC, FCA, and MAS. Can be accessed through Advantage Web, AT Pro, and MT4 platforms.

4) HotForex -  Formed in 2009, this brokerage offers a 100% Forex trading bonus to non-EU members. It has social trading features and is available in 25 languages. It is regulated by BaFin, CySEC, FCA, FSB, and FSC and can be accessed through MT4.

5) XM - Founded in 2009, this brokerage offers a deposit bonus of up to $5,000 following terms and conditions. It is very well regulated with 24-hour support. It is regulated by CySEC, and FCA, and can be accessed through iPhone/iPad MT4, Web Trader, Trader, Mobile Trader, and Droid Trader.

Conclusion

Forex trading requires prior knowledge before you throw your money into it. With the growth of many brokers, it is always good to do a background check on all of them. This can be done by reading feedback from people who have transacted with them.

Turkey is one of the countries that has implemented various stringent measures that have seen them turn around a once-broken FX market into a fortune. It is one of the most stable FX markets in the world with well-renowned top brokers. With strong regulatory agencies and well-defined laws concerning FX such as restrictions from holding foreign accounts, investors are cushioned from any fraudulent activities by brokers.