More than a year has passed since my last interview with a Forex broker representative. Today, your attention is distracted by the interview with a Cypriot Forex broker, Trading Point. Costantinos Cleanthous, Chief Executive Officer, has answered some questions concerning the company, the regulatory environment created by CySEC and the retail FX industry conditions in general.
How would you describe the current state of the regulatory environment created by CySEC?
CySEC provides protection to all clients by imposing strict rules and disciplinary penalties to any Forex Broker that does not adhere to CySEC’s regulations. CySEC has put in place extremely strict regulations to financial companies under its umbrella, in order to reduce money laundering and other illicit financial activity. CySEC has recently gained great popularity, not only for the Tax benefits offered to Brokers but also for its consistency to impose MiFID’s key aspects in regards with post and pre trade transparency and better execution.
Any chance for some dramatic changes in the CySEC regulation policy in near future? Similar to the leverage limits imposed in the United States and in Japan.
The regulatory environment of Cyprus will be affected by the European directives.
What is the key driver for such a fast growth of the number of the Cypriot Forex companies during last few years?
- EU regulation under MiFID directive
- Lower Operating and Licensing Costs
- Favorable Tax Regime
- Strong Economy & Financial System
- Global market credibility & penetration
- Advanced Telecommunications
- Favorable Business Environment
Do you think that the
Online trading gives access to the global market that it is huge. Inevitably Cyprus based brokers aim foreign customers. However, we notice an increasing number of the local participants.
How would you describe the current level of the participation of the Cypriot retail Forex brokers in the CySEC’s decisions regarding the FX market regulation?
Up to date there has not been much participation from the licensed companies themselves, but more from service providers who are servicing the regulated industry in Cyprus such as audit and legal firms.
Do you estimate that your clients are viewing the fact that Trading Point is regulated by CySEC as a positive or a negative factor?
Definitely it is a positive factor.
Why did Trading Point choose CySEC regulation? And why did you also opt for FSA (UK) regulation?
Mostly because of the reasons in question 3 above, also the founders are based in Cyprus. FSA regulation comes with the notification with
cross-borderactivities, as with all other countries in Europe that are under the MiFID. Trading Point is authorized by FSA (reg. number 538324) as well as by every EU member state, including BaFin in Germany and AMF in France.
Are you planning to introduce any new Forex trading features soon?
Trading Point has already expanded the number of trading platforms including mobile terminals, Webtrader and MAM. We are now in the process of introducing Binary options trading as well as enhancing our education and research sections.
When are you going to launch the live MT5 accounts, if ever?
Our company tests many trading platforms and provides the most reliable and robust technology to its clients. We are planning to introduce MT5 as soon as we are convinced that the platform operates smoothly.
What will happen to the online retail FX market in general in the future? What changes do you expect?
The forex market will continue to grow. The number of retail forex traders is currently less than 2% of online equity traders, indicating the potential growth of the forex market. However, we expect that at some point enhanced regulation and competition will result in consolidation of the companies that will not be able to compete.
What’s your advice to the new Forex traders that are in the process of choosing their first Forex broker?
Most important factors
- Regulated broker
- Execution policy with No Requotes
- Withdrawal policy
- Personalized customer service
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