Is Interactive Brokers Regulated by the BaFin as of 2024

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Interactive Brokers is a forex and CFD broker offering online trading services to traders and investors worldwide. The broker provides a diverse range of trading instruments, including  Stocks, options, futures, currencies, bonds, and funds. It also supports multiple trading platforms and tools such asWebTrader, FIX API, MobileTrader (MobileApp), TWS.

Although Interactive Brokers is regulated by several authoritative bodies, including SEC, CFTC, FCA, FSCS, FINRA, FCM,  IIROC, MAS, FSA, it is not regulated by BaFin. In this article, we will explore Interactive Brokers’ regulations, and its features, and provide a list of alternative brokers that are regulated by BaFin.

Does Interactive Brokers Operate Under BaFin?

No, Interactive Brokers does not operate under BaFin regulations. The broker is regulated by several other reputable financial authorities, including the SEC, CFTC, FCA, FSCS, FINRA, FCM,  IIROC, MAS, FSA. These regulatory bodies ensure compliance with various standards for financial stability, transparency, and investor protection, though they do not provide the specific protections offered by the BaFin in the UK.

What Other Regulations Does Interactive Brokers Have?

SCB (Securities Commission of The Bahamas):

Interactive Brokers is also regulated by SCB. Established in 1995, SCB  regulates and oversees the financial services industry. The SCB ensures that Interactive Brokers follows guidelines for maintaining adequate capital, protecting client assets, and ensuring transparent operations for clients from various regions, particularly those outside Europe and Australia.

CFTC:

Interactive Brokers 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 Interactive Brokers 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 Interactive Brokers operate with integrity and comply with regulatory requirements.

MAS:

Interactive Brokers 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, Interactive Brokers 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 Interactive Brokers operates safely and transparently. For more details, you can visit their website: http://www.mas.gov.sg.

FINRA

Interactive Brokers is also regulated by the Financial Industry Regulatory Authority (FINRA) for its operations involving U.S. clients. FINRA, established in 2007, is a non-governmental organization that regulates member brokerage firms and their registered representatives.

FINRA requires Interactive Brokers to adhere to strict standards for financial stability, transparency, and client protection. This includes maintaining adequate capital reserves, keeping client funds separate from company assets, and ensuring accurate and timely reporting. FINRA’s oversight helps ensure that Interactive Brokers operates fairly and transparently, protecting U.S. investors and maintaining trust in the financial markets.

Best Bafin Regulated Forex Brokers: Alternatives to Interactive Brokers

Interactive Brokers is one of the leading forex and CFD brokers. The broker is not regulated by BaFin. It is regulated by other top-tier regulators including SEC, CFTC, FCA, FSCS, FINRA, FCM,  IIROC, MAS, FSA. There are several BaFin regulated brokers that can serve as alternatives to Interactive Brokers. These brokers include: 

Pepperstone

Pepperstone

  • Founded In:  2010
  • Minimum Deposit: $0, Recommended: $200
  • Maximum Leverage: 500:1
  • Regulations: FCA, ASIC, CySEC, BaFIN, DFSA, CMA, and SCB
  • Trading Platforms : MT4, MT5, cTrader, TradingView and Own Trading Platforms
  • Trading Instruments: Forex, Commodities, Indices, Currency Indices, Cryptocurrencies, Shares, ETFs, and CFD Forwards.
CMC Markets

CMC Markets

  • Founded In:  1989
  • Minimum Deposit: $0
  • Maximum Leverage: 1:500
  • Regulations : FCA, ASIC, BaFin, IIROC, FMA, MAS
  • Trading Platforms : MT4 , Share trading platforms
  • Trading Instruments: Forex Major, Forex Crosses, Forex Minor, Metals, Oil , CFD, Stock indices
IG

IG

  • Founded In:  1974
  • Minimum Deposit: $0
  • Maximum Leverage: 1:200
  • Regulations: ASIC, FCA, JFSA, SFC (Hongkong), FSCA, MAS, FMA, GmbH, FINMA 
  • Trading Platforms: MT4, WebTrader, MobileTrader (MobileApp), ProRealTime
  • Trading Instruments: Forex, indices, Cryptocurrencies, Shares, Commodities
MultiBankFX

MultiBankFX

  • Founded In:  2005
  • Minimum Deposit: $50
  • Maximum Leverage: 1:500
  • Regulations: ASIC, Austrac, Bafin, CIMA, ESCA,  CySEC, FSC, FMA, MAS, TFG,  VFSC, FSCM, FSAS
  • Trading Platforms: MT4, MT5, Multibank-Plus
  • Trading Instruments: Forex, Metals, Shares,  indices, Commodities, Cryptocurrencies
XTB

XTB

  • Founded In:  2002
  • Minimum Deposit: $0
  • Maximum Leverage: 500:1
  • Regulations: FCA, CySEC, CNMV, KNF, FSC(Belize)
  • Trading Platforms : xStation 5 , xStation Mobile
  • Trading Instruments: Forex, Indices, Commodities, Cryptocurrencies, Stocks, and ETFs

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

How Can I Verify If My Broker is Bafin Regulated?

To verify if your broker, such as Interactive Brokers, is regulated by the BaFin, follow these steps:

  1. Find the Broker’s Reference Number or Name: Obtain this information from the broker’s website.
  2. Search the BaFin Register: Visit the Bafin Financial Services Register and enter the broker’s reference number or name.
  3. Check the Broker’s Authorization: Ensure that the broker is authorized to provide “Rolling spot forex contract” services to retail customers in the UK.
  4. Match Firm Details: Verify that the details on the BaFin website, such as the broker’s website and email, match those provided by the broker. Any discrepancies might indicate an unauthorized broker, and you should avoid trading with them.

Frequently Asked Questions ( FAQs)

What is Interactive Brokers?

Founded in New York, USA in 1978 by Thomas Peterffy, Interactive Brokers has grown into a global brand with over 2.1 million clients. It has become one of the leading online trading solutions for traders, investors, and advisors. The brokers give access to over 5000+ tradable assets including forex, CFDs, warrants, ETFs Options, Futures, Mutual Funds, and Bonds. To trade online, IBKR offers WebTrader, FIX API, MobileTrader (MobileApp), and TWS trading platforms.

Is Interactive Brokers Considered Safe?

Yes, Interactive Brokers is considered safe. The broker is regulated by multiple top-tier regulatory authorities, including SEC, CFTC, FCA, FSCS, FINRA, FCM,  IIROC, MAS, FSA. It offers negative balance protection and holds client funds in segregated bank accounts. Additionally, Interactive Brokers provides an investor protection scheme for clients regulated under FCA, making it a reliable and trustworthy broker.

Does Interactive Brokers Offer Negative Balance Protection?

Yes, Interactive Brokers offers negative balance protection. All BaFin-regulated brokers must offer negative balance protection. Negative balance protection means that traders are protected from losing more money than they have in their trading accounts. If a trade results in losses that exceed the amount of funds in the account, negative balance protection ensures that the trader’s balance cannot go below zero. This prevents the trader from owing the broker any additional money.

Is Interactive Brokers regulated in Australia?

No, Interactive Brokers is not regulated in Australia. The broker is not regulated by ASIC, the Australian regulator. However, it accepts Australian clients under its global entity. Interactive Brokers is regulated by several other authorities, including SEC, CFTC, FCA, FSCS, FINRA, FCM,  IIROC, MAS, FSA.

Written by

Jason Paine is a forex trader, researcher, and tech enthusiast. He is passionate about financial markets and cutting-edge technology. With a dynamic 16-year trading career, he's on a mission to guide fellow traders. Having navigated diverse forex brokers, Jason shares his insights at Brokersway to bridge the gap between traders and the right brokerage.

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