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I hope you already know that, what is forex broker regulation, in this topic we are going to explore the best European regulatory firms for forex brokers.

I hope you already know that, what is forex broker regulation, in this topic we are going to explore the best European regulatory firms for forex brokers. We know that Europe is one of the most important zones in our world, there are a lot of powerful countries are available and they are ruling in the world behind the United States of America. Forex brokers are very careful while they are operating their services in Europe because of their regulations.

Let’s try to find out the top 3 European regulatory firm:

MiFID - Markets in financial instruments directive

MiFID II was founded in the year 2007 to protect retail traders from fraud activities of forex and CFD providers. MiFID's full form is the Markets in financial instruments directive, this is the best regulatory firm in Europe because they have control in European Union.

If forex brokers want to operate their services in Europe, they must maintain the MiFID rules because this authority was intended by the European Commission, if any broker didn't maintain the following rules, they will be banned in Europe.

  • Broker must warn their traders while they are involved in the risk.
  • The prices of currencies must show on the display while trading.
  • Brokers can't show any fraud activity.

ESMA - European Securities and Markets Authority

ESMA was founded in 2011 to protect traders because at that time a lot of retail investors lost their capital cause of fraud broker's activity. ESMA means The European Securities and Markets Authority, If you know about the risk of high leverage and margin trading you should know how much people lost their capital while trading CFDs, the ESMA becomes here to protect themselves and declared the following rules for brokers.

  • For CFD Trading brokers can offer up to 30:1 for the most uses currency pairs and 20:1 for those currency pairs which is not included in major currencies.
  • 50% margin closeout rule,
  • Negative balance protection.

Brokers must maintain these rules while offering CFD's otherwise their license will be canceled by the authority.

FCA -Financial Conduct Authority

The full form of FCA is Financial Conduct Authority, a UK-based authority regulatory firm. We know that the UK is one of the most powerful countries in the world and they are ruling in the world for a long time. That's why UK regulatory firms also powerful and they hold the power to restrict any companies in the UK. You will be surprised to know that, It alone processes 36.9% of global OTC Forex turnover. FCA is protecting retail investors from the fraud activity of brokers. If a broker wants to get the FCA license they have must follow the requirements.

While a broker is operating in the market they must have £1,000,000 capital in the market, they must submit all of the audit reports when the firm asks.

#Best regulation for a forex broker in Europe,

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