HFM (HF Markets) CySEC Regulation 2024: Supervision, Investor Protections, and More

HFM (HF Markets) 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, Metals, Stocks, Bonds, Indices, Energies, Commodities, Cryptos, and ETFs. The broker supports various trading platforms and tools such as MT4, MT5.

HFM (HF Markets) is highly regarded for its regulation by multiple authoritative bodies, including the FCA, DFSA, FSCA, FSA in Seychelles, CMA, CySEC. This multi-regulatory oversight underscores its commitment to maintaining high safety and transparency standards.

In this article, we will explore HFM (HF Markets)’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 HFM (HF Markets) Operate Under CySEC Regulation?

Yes, HFM (HF Markets) operates under CySEC regulation. The CySEC license number of the broker is 684312. 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 HFM (HF Markets) 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 HFM (HF Markets), 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?

HFM (HF Markets) is well known CySEC-regulated forex broker. However, other CySEC-regulated forex and CFD brokers can serve as alternatives to HFM (HF Markets). 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 HFM (HF Markets) Have?

FCA:

HFM (HF Markets) is regulated by the Financial Conduct Authority (FCA) in the UK under license number 684312. The FCA, established in 2013, is responsible for regulating financial markets and firms in the United Kingdom.

The FCA requires HFM (HF Markets) 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 HFM (HF Markets) operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.

DFSA (Dubai Financial Services Authority):

HFM (HF Markets) is regulated by the DFSA. Established on 13 September 2004, DFSA is the regulatory body for financial services within the Dubai International Financial Centre (DIFC). It oversees a range of financial activities, including forex trading, and ensures compliance with its regulations through a framework of rules and guidelines. The DFSA provides a high standard of investor protection and requires firms to meet rigorous operational standards. For more details, you can visit the DFSA website.

CMA (Capital Markets Authority – Kenya):

HFM (HF Markets) is licensed and regulated by the CMA in Kenya. Founded in 1989, The CMA of Kenya regulates the Kenyan capital markets, including forex trading. The CMA allows a maximum leverage of 1:400 and ensures that financial institutions adhere to standards for transparency, fairness, and investor protection. It is operated by the Kenyan government. For more information, visit the CMA website.

FSCA

HFM (HF Markets) is regulated by the Financial Services Board (FSB) of South Africa. The FSB, established in 1990, was the financial regulatory authority in South Africa responsible for overseeing non-banking financial institutions before being replaced by the Financial Sector Conduct Authority (FSCA) in 2018.

Under FSB regulations, HFM (HF Markets) was required to maintain strict standards, including holding adequate capital, protecting client funds by segregating them from company assets, and ensuring transparency through regular financial reporting. This regulation helped ensure that HFM (HF Markets) operated securely and reliably, offering a safe trading environment for clients in South Africa.

FSA in Seychelles

HFM (HF Markets) is regulated by the Financial Services Authority (FSA) of Seychelles. The FSA, established in 2013, oversees the financial services sector in Seychelles to ensure compliance with regulatory standards and to protect investors.

The FSA requires HFM (HF Markets) to adhere to guidelines for managing client funds, which include keeping client money separate from company funds and providing regular financial reports. This regulation helps ensure that HFM (HF Markets) operates securely and transparently, particularly for clients in Seychelles, and maintains a trustworthy trading environment.

Frequently Asked Questions

What is HFM (HF Markets)?

Founded in 2010, HFM is a renowned broker with multiple regulations and ultra-fast executions of over 1000 trading instruments on its proprietary and MetaTrader platforms. The broker has received over 60 industry awards for outstanding performance. It boasts about 2.5 million clients from all over the world.

Is HFM (HF Markets) Considered Safe under CySEC regulation?

Yes, HFM (HF Markets) is considered safe under CySEC regulation. The broker is also regulated by 7 major regulatory authorities, including the FCA, DFSA, FSCA, FSA in Seychelles, CMA, CySEC. These regulations ensure strict compliance with industry standards and provide protection for client funds.

What is the Maximum Leverage for CySEC in HFM (HF Markets)?

The maximum leverage offered by HFM (HF Markets) under CySEC regulation is 30:1 for retail traders. However, leverage may vary based on the tradable assets.

Here are the HFM (HF Markets) 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 HFM (HF Markets)?

The minimum deposit for Hotforex is as low as $05. This low entry requirement makes it accessible for traders with low levels of capital.

Does HFM (HF Markets) Offer Negative Balance Protection under CySEC regulation?

Yes, HFM (HF Markets) 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 HFM (HF Markets) Offer an Investor Protection Scheme Under CySEC Regulation?

Yes, HFM (HF Markets) 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 HFM (HF Markets) 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.