Forex.com CySEC Regulation 2024: Supervision, Investor Protections, and More

Forex.com is a leading forex and CFD broker that provides online trading services to traders and investors worldwide. It offers an extensive range of trading instruments, including Forex, indices, cryptocurrencies, stocks, gold, oil, commodities. The broker supports various trading platforms and tools such as MT4, MT5, ActivTrader, and Tradingview.

Forex.com is highly regarded for its regulation by multiple authoritative bodies, including the CySEC, CFTC, NFA, CIMA, FCA, FSA, MAS, ASIC, CIRO. This multi-regulatory oversight underscores its commitment to maintaining high safety and transparency standards.

In this article, we will explore Forex.com’s CySEC regulation, its importance, the investor protection scheme, and negative balance protection. Additionally, we will provide information on other brokers regulated by the CySEC. 

Does Forex.com Operate Under CySEC Regulation?

Yes, Forex.com operates under CySEC regulation. The CySEC license number of the broker is 400/21. This regulation ensures that the broker adheres to the high standards set by the CySEC, providing a layer of security and trust for its clients. Being CySEC-regulated means that Forex.com must follow strict guidelines to protect client funds, ensure transparency, and maintain the integrity of its operations.

What is CySEC?

CySEC regulation refers to the rules and oversight provided by the Cyprus Securities and Exchange Commission. Founded in 2001, CySEC operates under European regulatory frameworks like MiFID and MiFIR, ensuring a transparent and secure financial market. It supervises various financial services, including forex brokers, investment firms, and other financial institutions, with a specific focus on investor protection and market fairness.

Financial service providers under CySEC must hold a CySEC license, which ensures compliance with strict capital requirements and risk management standards. These firms are required to maintain segregated client accounts and provide detailed reporting to uphold transparency. CySEC enforces a maximum leverage limit of 1:30 for retail forex traders and offers negative balance protection to safeguard clients from losing more than their account balance.

As a government-operated body, CySEC aims to protect investors and ensure market stability. More information on its regulations and services can be found on its official website: www.cysec.gov.cy.

Why do we trust CySEC regulation?

CySEC regulation is trusted for several reasons, primarily due to its comprehensive approach to ensuring the safety of client funds, robust capital requirements, and rigorous reporting standards. Here’s why these aspects contribute to its trustworthiness:

1. Safety of Client Funds

• Segregated Accounts: By requiring forex brokers to keep client funds in segregated accounts, CySEC ensures that these funds are protected and kept separate from the broker’s operational funds. This minimizes the risk of clients losing their money if a broker faces financial difficulties.
• Secure Entities for Deposits: CySEC mandates that client funds be deposited with reputable institutions, such as central banks, credit institutions, or qualifying money market funds. These entities are generally considered to be safe and stable, further safeguarding client funds.

2. Initial Capital Requirements

• Minimum Capital: Requiring forex brokers to maintain an initial share capital of at least €200,000 ensures that they have a substantial financial buffer. This reduces the likelihood of brokers being undercapitalized and unable to meet their financial obligations.
• Operating Capital: The additional requirement of €750,000 in operating capital ensures that brokers have enough resources to cover their ongoing operational costs and financial commitments. This requirement helps prevent financial instability and promotes responsible business practices.

3. Reporting Requirements

• Transparency: CySEC’s reporting requirements, including transaction reports, audit reports, client funds reports, and anti-money laundering reports, enforce transparency and accountability. Regular reporting helps CySEC monitor brokers’ activities and ensure compliance with regulatory standards.
• Compliance Monitoring: By requiring detailed reports, CySEC can closely monitor brokers’ adherence to regulations, detect any irregularities, and take corrective actions if needed. This proactive oversight contributes to maintaining a fair and secure trading environment.

Additional Trust Factors:

• Regulatory Framework: CySEC’s regulations are aligned with EU directives and standards, ensuring that they meet high regulatory and operational standards that are recognized across Europe.
• Investor Protection Measures: The Investor Compensation Fund provides an additional layer of protection, offering compensation to clients if a broker fails.
• Enforcement and Penalties: CySEC has the authority to impose penalties and take enforcement actions against non-compliant firms, which reinforces its commitment to maintaining a secure financial environment.

How Can I Verify If My Broker is CySEC-regulated?

You can find a CySEC-regulated broker’s profile on the CIF Regulated Entities List on the CySEC website. To verify if your broker, such as Forex.com, is regulated by the CySEC follow these steps:

1. Get Broker Details

Start by finding the broker’s license number or name. This info is usually on the broker’s website. Having the right details is key for the next steps.

2. Visit the CySEC Website

Go to the CySEC Regulated Entities List. This is where you can verify if your broker is regulated.

3. Conduct the Search

Enter the license number or broker name into the search bar. This will bring up the broker’s profile on the CySEC website, showing important details about their regulatory status.

4. Check Authorization

Make sure the broker is authorized to offer specific services:

• Look for “9 – Financial contracts for differences” under Investment Services.
• Check for “Foreign exchange services connected to investment services” under Ancillary Services. This confirms they can legally offer forex and CFD trading.

5. Match Firm Details

Finally, ensure that the information on the CySEC website matches what you see on the broker’s site. Check the website, email, and other contact info. If anything doesn’t match, it could mean the broker isn’t authorized, and you should stay away to protect your money

CySEC-Regulated Forex Brokers: Who Else Is on the List?

Forex.com is well known CySEC-regulated forex broker. However, other CySEC-regulated forex and CFD brokers can serve as alternatives to Forex.com. These alternatives include:

These brokers operate under CySEC regulation. According to CySEC rules, they offer leverage up to 30:1 and provide investor protection and negative balance protection for retail traders. To learn more about CySEC-regulated forex brokers, you can read our content on the best CySEC-regulated forex brokers.

What Other Regulations Does Forex.com Have?

FCA:

Forex.com is regulated by the Financial Conduct Authority (FCA) in the UK . The FCA, established in 2013, is responsible for regulating financial markets and firms in the United Kingdom.

The FCA requires Forex.com to adhere to strict guidelines for financial conduct, including maintaining adequate capital, safeguarding client funds, and ensuring transparency in its operations. This includes keeping client money separate from company funds and providing regular financial reports. FCA regulation helps ensure that Forex.com operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.

ASIC (Australian Securities and Investments Commission):

Forex.com is regulated by ASIC. Founded in July 1998, the Australian Securities & Investments Commission (ASIC) is Australia’s national corporate regulator, overseeing corporations, markets, and financial services in accordance with the Australian Securities and Investments Commission Act 2001. Being based in Australia, ASIC regulation ensures that the broker complies with Australian laws on financial services, including responsible conduct, risk management, and financial reporting. Client money is kept in segregated accounts, and there is an emphasis on risk disclosure and trader protection.

CFTC:

Forex.com is regulated by the Commodity Futures Trading Commission (CFTC) for its operations involving U.S. clients. The CFTC, established in 1974, is an independent U.S. government agency that regulates the futures and options markets.

The CFTC requires Forex.com to adhere to strict standards for financial conduct, including maintaining sufficient capital, segregating client funds from company assets, and ensuring transparency in trading practices. The CFTC’s oversight helps protect U.S. investors by ensuring that brokers like Forex.com operate with integrity and comply with regulatory requirements.

NFA:

Forex.com is also regulated by the National Futures Association (NFA) for its operations involving U.S. clients. The NFA, established in 1982, is a self-regulatory organization that oversees the U.S. futures and derivatives markets.

The NFA requires Forex.com to comply with rigorous standards for financial stability, transparency, and client protection. This includes maintaining adequate capital, segregating client funds from company assets, and adhering to strict reporting and operational standards. NFA regulation ensures that Forex.com operates fairly and transparently, providing a secure trading environment for clients in the U.S.

CIMA:

Forex.com is regulated by the Cayman Islands Monetary Authority (CIMA) under license number 144. CIMA, established in 1997, is the financial services regulator in the Cayman Islands, overseeing banks, insurance companies, and investment firms.

CIMA requires Forex.com to adhere to strict regulations for financial stability and transparency. This includes maintaining adequate capital, protecting client funds by keeping them separate from the company’s assets, and providing regular financial reports. CIMA’s oversight ensures that Forex.com operates securely and reliably, offering a trustworthy trading environment for clients in the Cayman Islands and beyond.

CIRO:

Forex.com is regulated by the Canadian Investment Regulatory Organization (CIRO). CIRO, formed in 2023 through the merger of IIROC (Investment Industry Regulatory Organization of Canada) and the MFDA (Mutual Fund Dealers Association), oversees all investment dealers and trading activity in Canada.

CIRO requires Forex.com to meet strict standards for financial stability, transparency, and investor protection. This includes maintaining sufficient capital, safeguarding client funds by segregating them from company assets, and adhering to regular reporting and compliance checks. CIRO’s regulation ensures that Forex.com operates securely and responsibly, providing a trusted trading environment for Canadian clients.

Mas

Forex.com is regulated by the Monetary Authority of Singapore (MAS). MAS, founded in 1970, is the government body responsible for overseeing financial institutions in Singapore, ensuring financial stability and investor protection.

Under MAS regulation, Forex.com must follow strict rules, including maintaining enough capital, keeping client funds separate from company assets, and providing regular financial reports. MAS supervises forex trading and limits the maximum leverage to 1:20 to manage risk. Although there is no specific protection scheme, MAS’s oversight ensures that Forex.com operates safely and transparently. For more details, you can visit their website: 

FSA (Japan)

FSA regulation refers to the rules and oversight provided by the Financial Services Agency (FSA) of Japan. Established in 2000, the FSA supervises financial institutions including banks, insurance companies, and forex brokers to ensure the stability and fairness of Japan’s financial system. It works to protect investors and maintain confidence in the market.

Financial service providers, such as forex brokers, must be licensed by the FSA to operate in Japan. The FSA enforces strict standards on capital requirements, risk management, and transparency. It requires firms to segregate client funds to ensure their protection and implement robust measures to prevent financial misconduct. By enforcing these regulations, the FSA plays a key role in upholding market integrity and safeguarding investor interests.

Frequently Asked Questions

What is Forex.com?

Founded in 2001, Forex.com is a leading online forex and CFD broker that provides access to a wide range of trading instruments. It is a well-established and regulated forex broker that offers MT4, MT5, and Tradingview platforms for US residents and traders from other countries. , Forex.com is known for its competitive pricing, advanced trading technology, and comprehensive research and analysis tools. It offers over 80 currency pairs, stocks, ETFs, gold, and silver for your personal investment and trading options. Gain capital operates this trading platform.

Is Forex.com Considered Safe under CySEC regulation?

Yes, Forex.com is considered safe under CySEC regulation. The broker is also regulated by 7 major regulatory authorities, including the CySEC, CFTC, NFA, CIMA, FCA, FSA, MAS, ASIC, CIRO. These regulations ensure strict compliance with industry standards and provide protection for client funds.

What is the Maximum Leverage for CySEC in Forex.com?

The maximum leverage offered by Forex.com under CySEC regulation is 30:1 for retail traders. However, leverage may vary based on the tradable assets.

Here are the Forex.com leverage limits under CySEC regulation:

• 30:1 for major currency pairs (e.g., GBP/USD, EUR/USD,)
• 20:1 for non-major currency pairs, gold, and major indices (e.g, S&P 500, Nasdaq 100 (US)
• 10:1 for commodities other than gold and non-major equity indices
• 5:1 for individual equities and other reference values

What is the Minimum Deposit for Forex.com?

Forex.com has no minimum deposit requirement, meaning you can start trading with as little as $0. However, for margin requirements and efficient trading, the broker recommends starting with at least $200 or equivalent.

Does Forex.com Offer Negative Balance Protection under CySEC regulation?

Yes, Forex.com offers Negative Balance Protection under CySEC regulation. This means that traders cannot lose more money than they have deposited in their trading accounts. If a trade results in losses that exceed the account balance, this protection ensures that the account balance does not go below zero, so the trader does not owe the broker any extra funds. This safeguard is important for retail investor safety and is in line with CySEC’s regulations to protect traders in Cyprus.

Does Forex.com Offer an Investor Protection Scheme Under CySEC Regulation?

Yes, Forex.com offers an investor protection scheme in accordance with CySEC regulations. Brokers regulated by CySEC must participate in the Investor Compensation Fund (ICF). This fund is designed to protect retail clients if a broker becomes insolvent.

Under the ICF, if Forex.com were to fail, eligible clients could receive compensation for their losses, up to a maximum limit of €20,000 per person. This protection ensures that clients’ funds are safeguarded and provides an additional layer of security for traders operating with CySEC-regulated brokers.

This scheme is part of the broader framework established by CySEC to enhance investor protection and maintain confidence in the financial markets within the EU.