Strict Regulatory Guidelines Adopted By German Forex Brokers
Germany is a core participant that drives the strength of the Euro and is one of the most powerful economies in the world. The Eurozone has multiple nations contributing to the overall welfare of the member countries of the EU; however, when it comes to regulatory guidelines and economic policies, Germany is the primary authority in the European Economic Area (EEA). Germany alone is responsible for more than 20% of the Forex transactions, which makes it a significant contributor to the market volatility.
German Forex brokers are regulated by the BaFIN (Bundesanstalt für Finanzdienstleistungsaufsicht), or more commonly known as the Federal Financial Supervisory Authority. The BaFin works under the MiFID derivative that unites all European regulated bodies under a uniform code of conduct. The BaFin has adopted several regulatory protocols that make it one of the most feared regulatory authorities in the world. The BaFin is proactive into investigating financial crimes, broker frauds, and other malpractices to safeguard the rights of investors in Germany and across Europe.
BaFin also has the distinction of taking care of both investors as well as its member firms by ensuring that all market participants receive the same attention from the regulatory authority. Unlike other regulatory agencies in EU and around the world, BaFin works with brokers, financial companies, investors, and other entities to ensure a fair and transparent marketplace that is free from abuse and irregularities. Once a member of the BaFin, the German regulators make it a priority to ensure that all businesses are kept safe from market eventualities, and even encourage companies to have detailed insolvency procedures in place to protect both the company as well as its clients.
At times, BaFin has been instrumental in safeguarding the integrity of the markets through constant supervision that prevents anyone from taking advantage of volatile market conditions. Forex brokers in Germany are required to hold funds in segregated accounts that are regularly monitored by BaFin and its senior administrators, which prevent brokers from misusing the funds in any way. BaFin also works with traders and brokers to sort out differences and encourages all parties to resolve their issues through arbitration, without taking matters to court. BaFin provides several resources and consumer helpline numbers that allow investors to report their grievances and report any financial misdoings directly to the authorities.
Browse through our list of approved and highly recommended brokers from Germany to aid you in your search: