Choosing your broker - ESMA & MiFID II
We periodically receive requests for help from traders / investors who are scammed by unregulated brokers. The problems are almost always linked to the impossibility of withdrawing the funds sent to intermediaries that operate illegally.
The unfortunate response we must to that is always the same: you should not have sent your money to an unregulated broker (or regulated in a lost Caribbean island!).
To avoid incurring these unpleasant situations, here is a small guide on how to choose your broker:
- Make sure the broker is regulated in a European country - How? check on the site of the that particular Financial Authority;
- Bonuses: bonuses have been banned by the European directive called MiFID II! Beware of any broker offering "bonuses" in exchange for certain deposits.
- Cold calls: unsolicited calls to potential customers have been banned by MiFID II! Beware of intermediaries that disturb you " by surprise".
- Deposits: Do not send funds out of the European community. Always prefer to pay by SEPA bank transfer and always make sure to send your money to the same licensed company. By paying with a credit card you will not be sure where your funds might end up.
- Leverage: the financial leverage offered must be in line with the ESMA regulations. Example: for a Retail customer, 30: 1 - 30 leverage - for "major" crosses - like EURUSD.
Only by respecting these measures will you be able to enjoy the protection of the competent authorities and / or recover your funds in the event of litigation if you have received unjust damage.
On Investingmoney.biz website you will find only links to financial companies that comply with European legislation.
Would you like to know more about our advisory services? Click here to know more
Would you like to understand which brokers we deal with? Click here to visit our BROKERS section.