German Forex Brokers

German Forex Brokers: Rules and Regulations

Germany is the strongest economy in the Eurozone and a major driver of events in the European financial markets. The country also has the greatest depth in the financial markets in terms of market capitalization and size of transactions. Regulation of German financial markets is very robust and is provided by the Federal Financial Supervisory Authority, otherwise known in German as Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN). BaFin is responsible for the regulation and supervision of close to 4,200 financial institutions in Germany ranging from banks, financial services institutions and insurance companies.

All financial activity in Germany without exception is regulated by BaFIN. This means that forex business and forex brokers in Germany are subject to regulation by BaFIN.

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Top 3 German Forex Brokers 2017

Take a look at our recommended Forex brokers for german citizens below:

1
Min. Deposit
$10
Exclusive promotion
Our score
10
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Start Trading
Description:
LonghornFX is a true ECN STP broker dedicated to delivering a superior trading experience to traders no matter their level of experience. Their services are based on transparency, innovation and efficiency, ensuring an unparalleled trading experience for all.
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
0% Commission Account
Low Spreads
Eco-Account Option
Start Trading
Description:
CedarFX is an eco-conscious broker offering 0% commission trading on 170+ assets, including Forex, Cryptocurrency Pairs, Stocks, Indices and Commodities. With up to 1:500 leverage, no-fee transactions and low spreads, traders can make the most of their funds. CedarFX also offers an Eco Account option to support tree planting and sustainability projects.
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro offers a wide range of currency pairs and other trading instruments. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Start Trading
Description:
EagleFX is an online digital asset, Forex and CFD broker providing traders across the globe with cutting edge technology to trade the world’s markets. Our focus has been to change the way people trade Digital Assets and Forex. We are driven to provide traders with incredibly low-cost pricing across all Digital assets, FX, stocks, indices, commodities and futures along with industry-leading 24/7 live customer support.
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.
5
Min. Deposit
$200
Exclusive promotion
Our score
7.9
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Start Trading
Description:
BlackBull Markets is a top-tier, award-winning, and financially registered forex broker with a globally trusted presence. Operating since 2014, BlackBull Markets is now the fastest growing financial services business in New Zealand. We were founded with the goal of becoming the leading online Financial Technology and Foreign Exchange broker. BlackBull Markets is a true ECN, No Dealing Desk brokerage specializing in Forex, CFDs, Commodities, Fibre Optic Communications and Fintech solutions for a global clientele.
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand

Understanding the Regulatory Environment in Germany

BaFIN has sweeping regulatory powers. BaFIN maintains a database of all trading accounts located in all brokerage houses in Germany. Brokers are mandated by law to provide this information to BaFIN and to update the lists periodically.

Status of Forex Trading in Germany

About a decade ago, most forex trading was done via telephone. To place an order, you had to call your broker on phone and have the order executed for you by the broker. Automation has changed all that. Germany now accounts for a large proportion of the trade volume in the forex market, as most forex trading is now online. Forex trading in Germany is controlled by the Bundesbank (Germany’s central bank), hedge funds, commercial companies, forex brokers, authorized banks and investment management companies.

It is thought that the over 19% of all global forex trading can be traced to Deutsche Bank, which is one of the largest liquidity providers in the market. Multi bank forex portals are very popular in Germany and have fuelled the immense growth of the forex market in the country. Perhaps the growth of the forex market and the fast liberalization of the market came too fast for the country’s regulators to keep up with. The recent LIBOR scandal where major European firms and traders were accused of rigging the LIBOR rate and profiting heavily from it affected Germany as well. The Head of BaFIN has recently come out to say that the regulator has detected a number of criminal acts in the process of the LIBOR manipulations, and is set to prosecute errant companies and traders. This has led BaFIN to believe that a radical change in the way forex trading is offered by brokers is the best way to safeguard the integrity of the market.

 

The Future of Forex Trading and Regulation in Germany

The LIBOR rigging scandal was one of the major news items of 2013, threatening the integrity of the forex market. As such, the German government has started a push for a change in the way forex is offered to traders. It is now the belief of the government of Chancellor Angela Merkel that the trading of currencies and precious-metals should be taken off trading platforms and moves to physical exchanges. The German government is said to have decided to use this as a means of overhauling the global financial markets with its partners.

According to the German Deputy Finance Minister Michael Meister, stronger financial regulation was the way to go in order to counter any kind of manipulation of other forex benchmarks, and that the shift of trades of currencies and precious metals to regulated exchanges would enhance the integrity of price-setting,”

The idea of moving away from spot markets to regulated exchanges was first muted by Elke Koenig, head of BaFIN. Acording to the BaFIN Chief, making forex and commodity trading exchange-mediated investment vehicles would help uncover “trading patterns that manipulate prices”. Koenig has however admitted that any such moves are still too far-fetched and needed to be pursued in stages.

This move, if seen to its logical conclusion, will represent a major transition for the forex markets and CFTC regulated forex brokers, since US Forex Brokers are regulated by the CFTC – these new introductions of new measures to curtail retail participation in forex trading via a change in margin requirements for forex and options trading in 2010 will have much implications not just for the forex broker companies which fall under this regulation but for their clients as well.

Germany has been at the forefront of austerity measures and reforms for ailing EU states. It is no surprise that it is now thinking of taking regulation of German forex brokers to a whole new level. It is very possible that within 10 years, German forex brokers will be required to key in their clients into exchange-traded forex trading.

Until then, traders would make do with trading currencies on the platforms of today, majority of which are owned by German banks operating through smaller subsidiaries. The state of regulation of German FX brokers is very strong, and traders who participate in this market via German brokers can be assured that in BaFIN, they have a regulator with the balls to do what is required to protect their funds and sanitize the market.

 

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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