In short
- CySEC is the Cyprus Securities and Exchange Commission, an EU national regulator.
- Licensed brokers are Cyprus Investment Firms (CIFs) and can passport services across the EEA.
- Retail clients get ESMA protections and access to the Investor Compensation Fund, up to €20,000.
CySEC-regulated forex brokers to compare
| Broker | EU entity | Platforms | Retail loss rate |
|---|---|---|---|
| Pepperstone | Pepperstone EU Limited (CySEC) | MT4, MT5, cTrader, TradingView | 72.9% |
Many other brokers serving the EU hold CySEC licences — always verify the licence number on CySEC's register. Looking for German supervision instead? See BaFin-regulated brokers.
Why so many brokers are in Cyprus
Cyprus became a hub for online brokers thanks to its EU membership, English-speaking financial sector and established regulatory framework. A Cyprus Investment Firm authorised by CySEC can use the MiFID II passport to offer services in other EEA countries.
What CySEC requires
- Capital requirements appropriate to the firm's activities
- Segregation of client money from company funds
- ESMA product rules: leverage limits, 50% margin close-out, negative balance protection, no incentives, risk warnings
- Best execution and conflict-of-interest policies
- Appropriateness checks before opening CFD accounts for retail clients
- Complaints handling, with escalation to the Financial Ombudsman of Cyprus
The Investor Compensation Fund (ICF)
If a CIF fails and can't return clients' money or financial instruments, eligible clients can claim up to €20,000 from the Investor Compensation Fund. Compensation schemes differ across the EU — the ICF's limit is the EU minimum and is lower than the UK's FSCS (£85,000).
Passporting: one licence, many countries
A CIF that passports into, say, Spain or Italy must notify the host regulator. Host regulators can apply their own conduct-of-business rules and marketing restrictions, and some have imposed stricter local measures than the ESMA baseline.
How to check a CySEC licence
- Find the licence number and company name in the broker's website footer.
- Search CySEC's register of regulated entities.
- Check the website domains listed for the firm match the site you're using.
- Check CySEC's warnings for unauthorised firms and clones.
More detail in how to verify a broker on an EU regulator's register.
Compensation schemes compared
| Scheme | Country | Typical investment cover |
|---|---|---|
| Investor Compensation Fund (ICF) | Cyprus | Up to €20,000 |
| EU minimum under the Investor Compensation Schemes Directive | All EU | At least €20,000 |
| FSCS | United Kingdom | Up to £85,000 |
Some EU countries' schemes offer cover above the €20,000 minimum. Compensation applies only if a firm fails and can't return client money — it doesn't cover trading losses.
CySEC's track record
CySEC regularly publishes decisions, fines and licence suspensions on its website. Reading a broker's history there — alongside its client agreement — gives you a better picture than marketing pages. A licence is a starting point for due diligence, not the end of it.
Complaints with a Cyprus broker
- Complain to the broker in writing first and keep a copy.
- If unresolved, you can usually escalate to the Financial Ombudsman of the Republic of Cyprus.
- For suspected misconduct, you can also inform CySEC and your own national regulator.
Things to check with a CySEC broker
- The licence number and permitted website domains on CySEC's register
- That the broker has passported services into your country
- Whether you'll be onboarded by the Cyprus entity or a non-EU group company
- The percentage of retail accounts that lose money
Frequently asked questions
Is CySEC a good regulator?
CySEC is an EU national regulator applying MiFID II and ESMA rules, so CySEC-licensed firms must meet the same core EU standards as firms licensed elsewhere in the EU.
How much does the Investor Compensation Fund cover?
Up to €20,000 per eligible client, if a member firm can't return client money or assets.
Can a CySEC broker serve clients in Germany or France?
Yes, through the MiFID II passport, after notifying the host country's regulator. The host regulator's local rules may also apply.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.