Trading The Forex Market With The Best Forex Brokers In Europe
Europe is one of the leading economic superpowers and is home to a large number of leading manufacturing companies and global financial powerhouses. The European Union is the biggest organization in the world with a collection of economic giants such as Germany, France, Italy, Spain, Hungary, Portugal, and 22 other countries in the European sub-continent. Up until recently, the UK was also a part of the EU, but owing to a referendum and the subsequent ‘Brexit,’ the UK has decided to sever its ties with the European Union, leading to an enormous amount of economic instability in the region. Nevertheless, countries such as the UK and Switzerland maintain close links with several European organizations, and its member firms, to act collectively through several socio-economic policies to improve and protect the integrity of the European financial markets.
Forex trading is a highly regulated entity in the EU, and Forex brokers require high levels of regulatory clearances to be able to cater to investors from Europe. The EU is home to the largest collection of regulatory organizations, and several financial derivatives that monitor and supervise the activities of all companies operating in the European financial sector. In fact, European Forex brokers are considered to be among the most reliable and reputed companies in the entire world and are considered to be at par with brokers that are governed by regulatory organizations from the US and other developed economies.
The European session contributes roughly around half of all financial transactions in the currency markets, closely followed by the US and Asian sessions. The overlap between the European and US time zone also facilitate the highest volumes in the financial market, which is another reason why most financial brokers set up their base in the European Union. Apart from a strict regulatory framework, Europe also provides an excellent business environment for financial institutions, which provides a significant amount of freedom to offer different financial products according to investors’ requirements. It is not a secret that the best Forex brokers in Europe are also consistently ranked as the best FX brokers in the world, due to their dedication to excellent investor protection policies and for offering a reliable trading environment.
Advantages Of Trading With Top Forex Brokers EU
The EU facilitates an environment of free trade for companies domiciled in any member nation of the EU, without any legal restrictions on cross-border sharing of services. Forex brokers regulated by EU regulators can operate in any other European member countries as per the European Economic Area (EEA) agreement, which prevents the need for setting up additional branches in other parts of the EU. Such an economic co-operation policy between EU members help companies to save a significant amount of costs and tap into the lucrative European investor market through a single EU establishment. Traders from Europe also find it easier to invest in a European regulated broker without worrying about the legal implications, as all EU Forex brokers are required to adhere to all the strict regulatory guidelines imposed on companies by the European Central Bank and the MiFID derivatives.
European Forex brokers are also relatively open in their approach by incorporating new financial products according to modern market trends. Instead of restricting investors about their investment choices, European FX brokers encourage traders to try out different financial products to branch out their investments to other exotic financial products. Most European brokers don’t impose any stringent trading conditions, which are mostly prevalent in other countries such as the US and other capital markets.
Top Forex Brokers EU also offer a sense of security and peace of mind, which are two vital components required for successful and stress-free FX trading. Forex trading in itself is a risky venture, but added with the uncertainties of the safety of your trading capital; fear of the overall reliability of an FX broker can affect your trading psychology to great extents. The EU and its regulators clearly understand the risks in the market and have devised several regulatory guidelines that are designed to protect their citizens from any type of financial scams or consumer abuse.
EU Forex brokers also offer a broad range of payment options to facilitate fast, easy, and secure payments through online and offline channels. Most FX brokers from Europe allow their clients to deposit or withdraw their trading funds using credit/debit cards, bank wires, Skrill, PayPal, Neteller, Western Union, and a wide variety of other online and offline payment methods. The central location of the EU also enables brokers to operate in most time zones, thereby offering companies the flexibility to cater to clients from all over the world without inconveniencing them. It is probably one of the reasons why a majority of EU brokers offer multiple support channels
- Licensed by CySEC, ASIC & FCA
- Min Deposit $5
- Offers different MT4 platforms
- Does not accept Paypal
- Does not offer EFTs
Supervisory Guidelines That Govern Forex Brokers Regulated By EU Regulators
Regulatory guidelines and other legislative policies for financial and economic matters in the EU are overseen by the European Central Bank and the European MiFID derivatives. EU has an established Monetary Union that has reserved the Euro as the base currency for 19 EU member countries. Therefore, all economic factors of the country are supervised by various European authorities for the safe functioning of the European economy.
Forex brokers are also subject to all the laws and guidelines imposed by the European Central Bank, which is monitored and supervised by the respective regulatory authorities responsible for regulating financial companies in that particular region. Popular European regulatory agencies include the CySEC of Cyprus, the FCA of the UK, the BaFin of Germany, the CONSOB of Italy, and the AMF of France. Although the FINMA of Switzerland is not officially a part of the EU, FINMA is considered to be a leading regulatory organization with very strict regulatory guidelines that do not grant Forex brokerage licenses, unless they conform to the various policies enforced by the Swiss Parliament.
Regardless, all Forex brokers in Europe are required to follow a uniform set of laws and regulatory conditions for the best possible protection of all investors in the region. Even though the EEA and the MiFID allow brokers to operate in any European Union member nation, every Forex broker is subject to the scrutiny and regulatory oversight of all independent regulatory organizations. What this essentially means is that a broker located in Cyprus may be subject to legal action in Germany, France, or any other EU member country, for any deviation from the European regulatory guidelines, or for any instances of consumer complaints that may result as a consequence of providing services to traders from these regions. Therefore, an EU regulation does provide the best protection for traders, regardless of their choice of an EU FX broker.
Forex brokers regulated by EU regulators are also required to have the best customer support channels that offer a timely resolution to consumer complaints in a fair and transparent manner. Traders can also approach a financial ombudsman service for problem resolution, or approach a higher authority such as the Court if they feel that any regulated firm has exploited them in contradiction to the regulatory guidelines. Some European regulators also cater to client concerns directly and are known to impose sanctions on brokers if they are found to be guilty of any wrongdoings.
Do EU Forex Brokers Follow The Same Regulations As The Brokers From The US?
The US has several regulatory organizations that are designed to supervise and monitor different financial markets, but FX trading products are regulated by the CFTC and the NFA. The US has indeed devised several margin requirement guidelines and trading restrictions that prevent traders from exercising complete freedom while trading the different currency pairs. CFTC has imposed a maximum leverage of 1:50, no hedging rules, and other trading conditions such as First In First Out. It is also illegal for US traders to invest their trading capital with overseas brokers, and all offenders will be penalized to the fullest extent of the law.
EU Forex brokers, on the other hand, do not have any such regulatory restrictions, as all European traders are free to trade the markets according to their preferences. European FX brokers are known to offer high leverages, hedging and scalping capabilities, along with access to other financial products such as binary options trading and spread betting. Due to the EU guidelines, traders are free to invest in any broker of their choice, but for protection under the EEA and MiFID, traders are required to choose an EU broker for all of their trading needs. EU does have a pretty lenient regulatory framework as far as the freedom of traders is concerned.
However, the EU regulatory agencies have several governing principles such as ensuring the security of funds through proactive financial audits, ensuring that client funds are kept in safe and segregated accounts, and making sure that there isn’t any conflict of interest between a broker and its customers. European Forex trading companies should always be open about its financial transactions and are required to hold sufficient amount of capital to maintain their clients’ position in the market. In the event of any bankruptcy or insolvency issues, it is the responsibility of the brokers to offer insurance to its traders through the investor compensation funds that are designed as part of the European regulatory structure. Almost all European regulatory organizations have excellent investor compensation funds that provide varying levels of protection for a trader’s capital, starting from $20,000, which can go all the way up to $50,000.
European Forex Brokers For International Traders
International traders may not be able to enjoy all of the privileges enjoyed by European traders, but they can expect a fair amount of reliability and security while dealing with FX brokers based in Europe. European regulators are not comfortable with the idea of their regulated member firms indulging in any financial scams, regardless of the origins of the trader. Even though overseas traders may not be able to receive any detailed assistance from European regulators, international clients can be assured that all FX brokers from EU will be audited to the best regulatory standards that will prevent brokers from indulging in any fraudulent practices.
EU brokers are also committed to maintaining an excellent reputation in the market, which ensures that they will treat all of their customers with the utmost respect. These brokers also make it a priority to avoid indulging in any promotions or market materials that may create issues with their clients. Due to this very reason, traders from all over the world prefer investing their money with European brokers, even if they don’t provide any attractive bonuses or rewards. Most professional traders also choose European brokers for their trading needs, often overlooking any attractive investment opportunities as promised by other brokers from lesser-known jurisdictions.