CySEC Financial Regulator

Purpose and Responsibilities

Cyprus Securities and Exchange Commission (CySEC) is arguably the best financial regulator in Cyprus. All binary options brokerage and retail forex trading in Cyprus are usually under CySEC regulator. This agency ensures fairness and equity in the market, among several other roles the government solely assigns them to do.

About CySEC

CFTC in the US and FCA in the UK are some of the most significant and most rebuttable financial regulators in the world financial markets. And so, CySEC has to accomplish specific roles within a financial market for it to be as rebuttable as well.

So, in this article, we will address the following key points about this Cyprus financial regulator:

  • CySEC’s financial regulator purpose and responsibilities
  • What exactly is CySEC? (or CySEC meaning)
  • CySEC’s criticisms and responses in the financial market
  • List of CySEC Regulated Forex Brokers
  • Forex Broker Guidelines
  • Risks Posed by Ineffective and Fraudulent Regulators

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What is CySEC?

CySEC is Cyprus’ major financial regulatory agency established by the Cyprus government to manage certain financial transactions within Cyprus’ financial market. This agency currently operates in compliance with European MiFID financial harmonization law.

This began in 2004 after Cyprus became an EU member state, meaning all its regulations, operations, and processes have to comply with this law.

So, what are CySEC’s roles in the financial market?

CySEC's Financial Regulator Purpose and Responsibilities

Every financial regulation agency is established to deliver several services to traders, businesses, and consumers. Therefore, this agency is tasking with the following aims and responsibilities that are considered are their primary objectives.

1. Distribute license

Their first role is distributing licenses to brokerage and investment firms. These licenses allow firms to legally operate in the CFD, stock, and forex market. This also ensures that no company can operate in any of these financial markets without a license hence preventing dubious firms from being created.

2. Reviewing and amending new regulations

To prevent loopholes from being created in the market, constant review and amendment of laws must be done. Therefore, CySEC is a responsible body when it comes to the management of any new regulations. They ensure accurate review and amendment of new license certificates, forex regulations, and even investment guidance.

3. Effective monitoring and supervision of all financial trading

For customers to have fair deals and equity within financial markets at all times, there should be constant active supervision and monitoring of the market’s proceeding. CySEC is, therefore, given a mandate to oversee the local stock exchange and the associated dealers and firms.

4. Gathering essential data

This agency is also needed to collect necessary information from or on regulated forex companies and other brokers lists within the financial market. This is important since it helps provide more information when reviewing new regulations or advising traders and customers about the financial market.

5. Deals with Fraud Disputes

This CySEC role is mostly remarkable for every consumer. This agency can initiate chargeback in case of any fraud case even if you willingly paid for a product, but so long as you offer a valid claim as to why you need a refund or reversal. You always have a right to request your bank to reverse the unapproved charges noticed in your account.

If you are a cardholder and notice unexplained transactions on your account, you are allowed to dispute it.

6. To inquire and impose sanctions on licensed companies.

This agency also has the mandate to ask any registered firms questions on your behalf, and if they have breached any regulations, they can also impose sanctions.

When it comes to this role, CySEC has to do more than just asking questions. They do this by inspecting all their regulated firms and brokers to whether they meet both fair operation remuneration policy and reporting requirements.

Besides inquiring, inspecting, and suctioning, this financial regulator also undertakes training to prevent money laundering. As you know, money laundering is a threat to the financial market’s equity and fairness, which may end up negatively affecting consumers.

What are The Risks Posed by Ineffective and Fraudulent Regulators?

Limited government infrastructure in some countries may lead to those countries having several ineffective and fraudulent regulators. So, I would advise that every consumer be aware that such companies exist and be careful.

These companies are established and run by experts with versed knowledge in the financial market. Therefore, they will always create regulatory commissions that may seem legit in almost all ways, but they are not in reality. This online brokerage firm’s capacity to deliver its obligations may be nominal at best and non-existent at worst, so be careful.

They always best convince people that their services are reliable, but in a real sense, they are not. This is most common in fake brokerage agencies that claim to be part of sovereign industry regulatory associations regulations.

List of CySEC Regulated Forex Brokers

Nowadays, there are a ton of forex brokers based in Cyprus, but almost all of them operate under CySEC regulation. The fact is, some good forex brokers while others are not so good.

To help you identify the best brokers from the rest, we have done intense research and compiled some of the best forex brokers for you. So, here are some of the best CySEC Forex Brokers in Cyprus.

a) BDSwiss

BDSwiss is a company specializing in over 250+ financial CFD instruments and works under two financial regulators; CySEC and Mauritius Financial Services Commission. And apart from offering users with 250+ financial CFD instruments, it also provides educational events and resources via Trading Academy advanced courses and academic and live analysis webinars and seminar.

b) FP Markets

FP Markets is a group of companies, and it was first founded in 2005 and is supervised by the Australian Securities and Investments Commission (ASIC). One of the companies in FB markets portfolio is a company authorized and regulated by CySEC, and that is First Prudential Markets Ltd.

FP Markets features one of the best Iress active trader trading platforms that gives its traders with supreme user experience.

c) Plus500

Plus500 is one of the biggest brokerages boosting clients of over 317,000 from all over the world. This forex broker is regulated in more than one country, with Cyprus, Australia, and the UK being among those countries.

They provide technical analysis data to their users, but they lack educational or research materials, which is a big minus.

Forex Broker Guidelines

CySEC has given a lot of directives to all forex traders that trade under its regulatory umbrella. These orders include directives for money laundering, new rules for cryptocurrencies, and bonus circulars.

But since there are so many guidelines, we will only touch on a few essential examples.

  • Brokers with licenses and in need of extending their services should notify CySEC before extending them. This will involve forex brokers giving detailed data of all the investment services it plans to offer.
  • CySEC can establish leverage limits, bonus qualifications, and minimum capital requirements.
  • Brokers must guarantee access to investor compensation funds, but first, they must meet guidelines about indemnity insurance.
  • Besides being in an appropriate register, two people, minimum, must be in charge of administering any forex investment plans.

CyEC's Performance Criticisms

Despite CySEC’s outstanding performance in Cyprus’s financial market, it still reconceives several criticisms regarding several actions it has taken. Here are some of this agency’s criticisms:

  • Compliance officers from this agency hand out relatively small non-compliance fines, despite a set of laws and regulations to amend.
  • Media attention and numerous consumer complaints tend to trigger CySEC’s response, like in IronFX when there was a breach in numerous regulations.
  • Several investment services and licensed brokers have only received a minor warning and escaped infringements because of hazy definitions and inaction from the regulatory body.
  • The risk of late and inadequate responses is high due to the lack of direct communication channel for those looking to file complaints. CySEC’s have therefore been criticized for lack of willingness to handle direct complaints. They suggest that customers should file their complaints directly with their brokers.

With all these criticisms, they have work to formulate a solution, which is worth noting about this agency. Some of the response that we have notices from this financial regulator includes:

  • Imposing tougher fines to improve response time and quality services
  • Suspension and revoking licenses are another regulatory action that CySEC is now upholding more regularly.
  • Preventing high-risk investment products in France is another pro-active measure that this agency has taken to prevents consumers.


Overall, the Cyprus Securities and Exchange Commission (CySEC) has delivered a lot to Cyprus and Europe’s financial market. It is a popular regulatory body that is not only protecting but also revolutionizing different financial markets.

Remember, you can avoid signing up with fraudulent fox brokers by checking whether they are a licensed company or not. It is easy to check; take their registration number and check it on CySEC’s official website to see if it is a licensed firm.