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
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
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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
Bank Transfer, Credit Card, Debit Card, PayPal, Wire 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.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
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
Bitcoin, Credit Card, Debit Card, Visa
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.
3
Min. Deposit
$10
Exclusive promotion
Our score
8.7
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
Bitcoin, Credit Card, Debit Card, 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.
4
Min. Deposit
-
Exclusive promotion
Our score
8.5
Take a position on major global indices, including US Wall St 30 and France 40
Low spreads and accurate pricing reflecting the underlying market
Comprehensive analysis and new for better decision making
Start Trading
Description:
OANDA is the trusted name for Forex and CFD trading. Since 1997 OANDA has established a reputation for fair and transparent pricing and responsive customer service. Easy account opening process.
Payment Methods
Bank Wire, Check, Credit Card
Full regulations list:
CFTC, FCA, IIROC, MAS, NFA
Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances. You may lose more than you invest.
5
Min. Deposit
-
Exclusive promotion
Our score
7.9
Forex Demo Account
Trading accounts in EUR, USD, PLN, CZK, GBP
MT4 and MT5 platforms
Start Trading
Description:
Instaforex provides top-notch services and reliability are recognized by numerous awards and proved by the trust of over 7,000,000 clients. A wide selection of offers and investment solutions can meet the needs of any demanding trader. The safety is supported by the licenses from the CySEC, the SNB, the KNF, and CNB. InstaForex has everything to make your trading experience as positive as possible.
Payment Methods
BPAY, Bank Wire, Bitcoin, Boleto, CartaSi, Carte Bleue, China UnionPay, Credit Card, Dankort, Debit Card, Giropay, Ideal, MoneyGram, POLi, Paxum, PayCo, Przelewy24, Sofort, Trustly, Western Union, ePay bg, ePayments Transfer, neteller, postepay, skrill
Full regulations list:

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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