CySEC only Protects Traders from European Countries?

Investment ForumCategory: General QuestionsCySEC only Protects Traders from European Countries?
Anonymous asked 5 years ago
Is it true that CySEC is only responsible for protecting traders from the European countries?

If the brokers have no branches at that country / continents, does that mean CySEC will not be responsible to take action on the brokers?

1 Answers
Scam Trading Brokers Staff answered 5 years ago

Yes, CySEC is the financial regulator of Cyprus. Their purpose is to protect investors from Cyprus and via MiFID regulations their license is accepted by many of the EU member countries. There are countries like Belgium, which does not accept a Cyprus license as good enough. They have recently starting requiring binary option brokers to also register and get a license in Belgium.

Traders outside of Europe in places like South America and Asia have realized that although they are not protected by Cyprus’s financial regulator, it is still better to trade with a broker that is licensed in Europe, because that broker at least has a license and must follow certain regulatory rules.

Caution: Some CySEC licensed brokers have 2 websites. One for Europe, and another similarly named site for traders outside of Europe. In a case like that, you do not want to use this broker, because that similar site is totally unregulated, and they do not follow CySEC rules. Check the website you are sent too, and see if they display their CySEC license on the site.

Australia: A broker like Trade Financial which is based in Australia and has an ASIC license, only covers trades living in Australia. However, where would you rather invest your money? With a company that paid $10,000 to buy a binary options trading software, and opened a website, or a reputable Australian company that spent over $1 million dollars just to receive a license. So although you are not protected by ASIC, it does say something about the size of the company you are dealing with.

24Option.com is one of the largest CySEC licensed brokers, and they only have one website, so they must deal as a regulated broker in all countries.

Sorry for the long response, but we hope this clears up things for you.