Forex trading has become easy over the years for various reasons. The technological advancements that the World Wide Web has witnessed in the recent times are what make it simple, easily accessible and fast. Further, the introduction of smartphones has made it possible for traders to access their trading accounts on the go, from any part of the world and at their convenience. This is to say that the Internet has opened up the lid as far as forex trading is concerned. However, there are some geological factors that traders need to take into consideration when they decide to achieve their financial goals through forex trading. This is because the rules and laws that govern the status of the financial markets vary from one country to another. For example, a person residing in a country where forex trading is banned cannot place trades even if he/she hails from another country that permits online currency trading. As a result, it is very important that traders have a clear understanding as regards the differences in rules governing forex trading in the country they live in and the country they belong to. In this post, some key aspects related to the laws governing the operation of the forex market in Spain are discussed.
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Financial Trading Regulation in Spain
The first and foremost aspect that a person who wants to trade forex in Spain must know is the name of the agency responsible for regulating the operation of the forex market in the country. In any country, the operation of the forex market may either be supervised by an agency that is responsible for regulating the financial service providers such as banks and insurers or one that is set up exclusively for overseeing the forex trading activity. In Spain, the first scenario prevails. A general agency responsible for monitoring the operation of the financial sector oversees the currency market activity as well. This is to say that the forex market is regulated by Comision Nacional del Mercado de Valores (CNMV), an independent government agency that regulates the financial sector in the country. The CNMV operates under the Ministry of Economy and Finance in Spain. The ministry has the complete authority to interfere with the operations of the agency, if there is a need to do so. As the CNMV was set up in 1988, it is by far one of the oldest financial market regulators in the whole world.
The CNMV is bestowed with the responsibility of regulating the whole of the currency market, including the activities of both ordinary people or retail customers and large investors as per the Law Act of 24/1988. Today, CNMV strives to ensure transparency as regards the operation of the brokers and also addresses the grievances of traders. Even individual traders can approach them for resolving any of their problems. After Spain joined the European Union as one of its members, the financial regulatory framework adopted by the CNMV was amended in order to comply with the standards stipulated by the EU. The Markets in Financial Instruments Directive (MiFID) is the European Union law that ensures harmonized regulation for the operation of investment services across the 31 member states. Further, CySEC’s financial regulations are in harmony with that of the MiFID.
The CNMV regulates the forex market activity in Spain as follows:
- Controls the forex brokers on the securities they make available in the primary market
- Responds to inquiries as well as disputes between traders or brokers or other brokers or customers, especially those that involve violation of officially established national laws and/or rules
- Issues official licenses to operate as forex brokers in accordance with the laws stipulated by the country and the global currency market
- Penalizes people or companies that is responsible for violating the laws governing the financial activity within the Spanish territory
Tips to Identify Top Forex Brokers in Spain
- Look for forex brokers that are licensed and regulated by CNMV. Ensure that the broker has the license to operate in Spain.
- Do not feel tempted to sign up with brokers that offer a large number of trading instruments, currency pairs or options related to payment methods. This is because the broker that a trader works with has a great deal of impact on his/her making profits from forex trading.
- Try to identify a broker that offers reasonable bonuses for signing up, depositing funds, winning forex contests, etc.
- Ensure that your experience and expertise matches with the offerings of the broker. Most of the forex brokers operating in Spain cater to both beginners and experienced traders. However, beginners should consider top forex brokers in Spain that offer a lot of learning material or trading tips.
- Test the platform offered by top Spanish forex brokers that you have shortlisted before signing up with any of them. Spain provides a great deal of safety to traders and, therefore, the opportunities to earn are also numerous.
Top Forex Brokers in Spain
XM.com is the trade name of Trading Point Holdings Ltd. The forex broker is owned and operated by Trading Point of Financial Instruments Limited, which is a financial company that is primarily regulated by CySEC. XM.com is also a forex broker that is registered in the European Union. XM’s headquarters is located in Limassol, Cyprus.
Broker Type – DMA/STP, MM
Regulation: CySEC; FCA, UK; MiFID
Minimum Deposit – $5
Deposit Options: Bank Wire, Neteller, Skrill, WebMoney, Credit Card, WesternUnion, MoneyGram, SOFORT, UnionPay (China), etc.
Maximum Leverage – 888:1
Minimum Lot Size – 0.01
Spreads – Variable
XTrade, established in 2010, operates through Xtrade International Limited (Financial Arena Ltd), which is authorized and regulated by the International Financial Services Commission in Belize. The company maintains offices in five continents and serves clients in more than 140 countries.
Broker Type: CFD Broker
Regulation: IFSC, CySEC, MiFID, ASIC and FSB
Minimum Deposit – $100
Deposit Options: Credit Cards, Wire Transfer, Skrill, WebMoney, Sofort, PaySafeCard, Qiwi, Neteller and CashU
Maximum Leverage – 400:1
Minimum Lot Size – 0.01
Spreads – Fixed
HYCM, formerly known as HY Markets, has its headquartered in London, UK. The broker is authorized as well as regulated by UK’s Financial Conduct Authority (FCA). As a division of Henyep Capital Markets, HYCM has a history of operating for 30 years and the company specializes in forex, and CFDs on commodities, equities, indices, metals and treasuries. They have offices in the major cities of three continents.
Regulation: FCA, UK; MiFID, DFSA and SFC
Minimum Deposit – $50
Deposit Options: Credit Cards, Wire Transfer, Skrill, PayPal, WebMoney, etc.
Maximum Leverage – 500:1
Minimum Lot Size – 0.02
Spreads – Fixed and Variable