CySEC Regulation: What It Covers
CySEC is Cyprus's financial regulator and an EU regulator, so its licensed brokers follow EU rules: retail leverage capped at 30:1 on major FX (down to 2:1 on crypto), negative balance protection, margin close-out at 50%, restricted bonuses, and membership of the Investor Compensation Fund (the lower of 90% of your claim or €20,000). But a brand's CySEC licence only protects clients of its Cyprus company, not those signed up with its offshore sister.
What CySEC applies
As an EU regulator, CySEC applies EU rules on retail CFDs, which come from ESMA’s measures:
| Rule | Retail clients |
|---|---|
| Major FX leverage | 30:1 |
| Non-major FX, gold, major indices | 20:1 |
| Other commodities, non-major indices | 10:1 |
| Individual shares | 5:1 |
| Crypto | 2:1 |
| Margin close-out | 50% of required margin, per account |
| Negative balance protection | Per account |
| Incentives (bonuses) | Restricted |
| Risk warning | Standardised, with % of losing accounts |
The Investor Compensation Fund
CySEC runs the Investor Compensation Fund for clients of its member firms; check that your broker’s Cyprus company is a member. If a member fails to repay funds owed to clients, or to return their financial instruments, the ICF pays the lower of 90% of covered claims or €20,000 per client, once the compensation procedure has been started and the claim is valid. Trading losses are not covered.
CySEC licences among the brokers we cover
| Broker | Company / note |
|---|---|
 HFM |
HF Markets (Europe) Ltd, CySEC 183/12 |
 XS.com |
Group lists a CySEC licence among six |
 M4Markets |
Group lists CySEC among its licences |
IronFX’s EU company, Notesco Financial Services Ltd, also holds a CySEC licence (125/10); is IronFX safe? explains why that licence doesn’t tell you who serves international clients. These Cyprus companies serve EU clients. Offshore readers are usually onboarded by a different group company under a different licence. That’s why we treat “regulated by CySEC” on a homepage as a group fact, not a promise about your account. See licences by tier.
Should you choose a CySEC broker?
Yes, if you live in the EU, or you value compensation and strict rules more than leverage. Not if you specifically want 1000:1 leverage or bonuses; those aren’t available to EU retail clients. The trade-off is set out in regulated vs offshore brokers, and compensation in segregated funds and compensation.
Related
- How to Spot a Scam Forex Broker: 7 Checks
- Forex Broker Licences Ranked by Tier
- Japan FSA Warnings: What They Mean for Offshore Brokers
- Segregated Funds and Investor Compensation Explained
- What Happens to Your Money if a Broker Goes Bust
- Seychelles FSA Licence: How Strong Is It?
- Mauritius FSC Licence Explained
- Vanuatu VFSC Licence Explained
- Forex Glossary
Frequently asked questions
Is CySEC a tier-1 regulator?
As an EU regulator applying EU-wide rules and with a compensation fund, we place it in our top tier, alongside the UK and Australia.
Am I protected by CySEC if my broker shows a CySEC licence?
Only if your client agreement is with the Cyprus company. Most international clients of offshore brands contract with a different company.
How much does the Cyprus Investor Compensation Fund pay?
The lower of 90% of your covered claims or €20,000, according to CySEC. It doesn't cover trading losses.
Why can't I get high leverage with a CySEC broker?
EU rules cap retail CFD leverage: 30:1 on major FX, 20:1 on non-major FX, gold and major indices, 10:1 on other commodities, 5:1 on shares and 2:1 on crypto.
