CySEC

CySEC is the Republic of Cyprus's securities regulator. Because Cyprus is an EU member state, a firm authorised by CySEC under MiFID II as a Cyprus Investment Firm (CIF) can "passport" its services to clients in other EU and EEA countries. That, along with the island's established financial services sector, is why a large number of retail forex and CFD brokers serving European clients hold a CySEC licence.

What CySEC does

• Authorises investment firms and keeps a public register of licensed firms, with their licence numbers and the websites they are allowed to use.
• Supervises them and applies EU rules, including the retail CFD measures that originated with ESMA: leverage limits, a 50% margin close-out rule, negative balance protection and the standard CFD loss disclosure.
• Issues warnings about unauthorised firms and clone firms.
• Takes enforcement action, including fines and licence suspensions, and publishes its decisions.

Compensation

CIFs are generally required to be members of the Investor Compensation Fund (ICF). If a member firm fails and cannot return clients' money or assets, eligible clients can claim; the limit is 20,000 euros or 90% of the covered claim, whichever is lower. It does not compensate for trading losses. See investor compensation scheme.

Practical note

Check a firm on CySEC's own register, and confirm the website you are using is listed for that licence. Our regulator registers page and how to check a broker licence guide explain how.