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.

bafin

Top 3 German Forex Brokers 2017

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

Broker Info Bonus US Traders Open Account
Varengold Bank FX Spread: 2 Pips
Leverage:
Minimum Deposit: $2500
Demo Account: No
N/A Visit BrokerRead Review
FXNet Spread: 2.3 pips
Leverage: 500:1
Minimum Deposit: $5
Demo Account: Open
35% New Account Bonus! Visit BrokerRead Review
XM Spread: 1 Pip
Leverage: 888:1
Minimum Deposit: $5
Demo Account: No
$30 No Deposit and 50% Deposit Bonus! Visit BrokerRead Review

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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German Forex Brokers

germanyGermany is the strongest economy in the Eurozone, and so it is virtually impossible to visualize a situation where forex brokers will be missing from this European economic and financial powerhouse.

German forex brokers are subject to regulation by BaFIN (Bafin.de), the Federal Financial Supervisory Committee. Located in Bonn and Frankfurt, BaFIN is responsible for regulation of financial services companies in Germany, and German forex brokers are not an exception.

Here are a few forex brokers that operate in Germany. Some of these are local German companies while others are foreign companies that have established branches in Germany for the purpose of extending their tentacles into the German trading market.

Regulated Forex Brokers in Germany:

Broker Info Bonus US Traders Open Account
Varengold Bank FX Spread: 2 Pips
Leverage:
Minimum Deposit: $2500
Demo Account: No
N/A Visit BrokerRead Review
Admiral Markets Spread: 1 Pip
Leverage: 1:500
Minimum Deposit: $10
Demo Account: No
Seasonal Offers and Demo Trading Contests Available USA AllowedVisit BrokerRead Review
FXCM (Forex Capital Markets) Spread: 1 Pip
Leverage: 1:200
Minimum Deposit: $50
Demo Account: No
NA USA AllowedVisit BrokerRead Review

VarengoldFX

Varengold FX is a CFD and forex trader that is located in Germany. It is a fully homegrown German forex broker that commenced operations in 1995. Varengold FX offers its traders up to 6 different trading platforms that range from the time-tested MetaTrader4 platform to the more professional trading platforms such as FXSTAT which is used for autotrading.

IS Trading

IS Trading is another fully homegrown German forex brokerage firm. IS Trading offers forex and CFD trading from four trading platforms, giving traders the choice of platform to use. Strategy trading is one of the promising features on the IS Trading platform, allowing traders to use their own strategies as well as deploy strategies from the IS Trading Strategy Center for their use.

AvaFX

AvaFX is a broker that operates in Europe under the MiFID protocol. Traders can use several trading platforms that include AvaJava (AvaFX’s proprietary web-based platform), the AvaTrader which is the customized version of the ActTrader platform, and the MT4 platform. AvaFX is one of the most generous brokers when it comes to bonus awards. Partnering with Zulutrader, they were also one of the earliest brokers to introduce autotrading services to traders.

Admiral Markets

Admiral Markets provides forex trading from desktops, laptops and mobile-based trading platforms. Though based in Estonia, Admiral Markets offers forex trading services to European clients, and is part of the Markets in Financial Instruments Directive (MiFID) regulatory protocol. Admiral Markets offers German traders webinars, video tutorials, and educational centre for forex learning and a complete Analytics section which provides insight into aspects of forex trading. The ForexBall is a trademarked product which provides a contest pool of funds worth $541,000, providing a pool of funds as prize money for various forex trading contests run on the Admiral Markets platform.

Markets.com

Markets.com is owned by Safecap Investments Ltd and operates out of Cyprus, carrying regulatory certification by the Cyprus Securities and Exchange Commission (CySEC) as well as being a signatory to the MiFID protocol, which provides for regulation of all financial services businesses based in the European Union. Markets.com is another example of a foreign forex brokerage firm that opens its doors to German citizens and thus is regarded as a German forex broker.

Plus 500 CFD Service – Your Capital is at Risk

Plus 500 is a forex brokerage that provides traders with the famous no-deposit forex bonus where traders can get $100 in welcome bonuses credited into their live accounts. Plus 500 is not based in Germany, but is one of the foreign forex brokers that accepts German citizens into its trading fold. German traders are regarded as part of the EU and given all rights and privileges that come with it, especially when it comes to provision of identification documents.

So there we have it. German forex traders have the ability to choose between the home-grown German forex brokers, or any of the international brokers that have a presence in the European Union. Since Germany is part of the EU and indeed is the major economic power in the region, there is no reason why German forex traders cannot derive the best benefits from services provided by German forex brokers and their EU-based counterparts.

Adam

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

View Posts - Visit Website

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