Cyprus forex sector strictly regulated, contributing thousands of jobs to economy

What is Forex after all? It is, in fact, a strictly regulated sector, distinct from illegal schemes, with a decisive contribution to the economy

The forex sector and its role in the Cypriot economy were the central themes of a recent discussion clarifying the industry’s institutional standing.

Strict supervision and full European compliance

Forex companies are financial organisations that are strictly supervised by the Cyprus Securities and Exchange Commission and other competent international authorities.

They operate within very strict institutional and regulatory frameworks, fully implement European directives, and are subject to continuous, regular, and substantive audits.

The supervision is strict, institutionally guaranteed, and aligned with European standards.

No relationship between forex trading and boiler rooms, illegal schemes, or unregulated activities

It was emphasised with absolute clarity that illegal schemes, such as so-called boiler rooms, have no relationship whatsoever with forex.

The recent Europol announcement regarding the dismantling of an international fraud ring involving over 700 million euros concerned illegal call centres that provided unlawful investment advice to defraud citizens.

These activities are outside supervision, outside the law, and outside the operational framework of forex companies.

Within the framework of the conference, it was underlined with emphasis that so-called boiler rooms do not constitute forex, just as forex is not comprised of betting companies, online casinos, or cryptocurrency exchanges.

It was stressed that the indiscriminate use of the term for different and unregulated activities is incorrect and creates a distorted image of a strictly supervised financial sector.

Forex firms do not choose Cyprus for lax supervision

During the conference, claims that companies offering forex trading choose Cyprus due to relaxed supervision were simultaneously rejected.

It was pointed out that the Cyprus Securities and Exchange Commission fully applies the European regulatory framework, undergoes European supervisory evaluation, and conducts strict and systematic audits.

The level of supervision is absolutely aligned with that of the remaining member states of the European Union.

They do not offer investment advice and do not promise returns

Forex companies for the most part offer one service exclusively, which is the execution of brokerage orders via their electronic platforms on financial products such as CFDs on indices, currency parities, gold, and others.

They do not provide investment advice, they do not manage capital, and they do not promise returns.

Strict procedures to avoid money laundering and terrorism financing

Both the supervisory authorities around the world, including the Cyprus Securities and Exchange Commission, and domestic and international banks apply thorough audits and procedures both to the forex companies themselves and to the transfers of client money and transactions.

A very important element is that companies implement procedures so that deposits and withdrawals by third parties are not permitted.

That is to say, the trading account held by the investor with the company must be funded from a bank account or card belonging to themselves.

Correspondingly, when the investor requests a withdrawal, the money will be transferred to the same account, with the result that it is ensured that the money will not be transferred to another third person.

In this way, any risk of legalising proceeds from illegal activities or financing terrorism is eliminated.

The contribution of the sector to the country is proven

The contribution of the sector to the Cypriot economy was underlined.

The forex sector employs thousands of workers, strengthens GDP, and attracts investment.

It is a regulated and strictly supervised sector with an international presence of decades in Europe and America.

The organisers concluded that the clear separation between regulated forex companies and illegal activities is not a matter of communication, but a matter of institutional accuracy and protection of the credibility of an important pillar of the Cypriot economy.

From forex to Financial Technology

The term “forex trading” and, by extension, “forex companies” are used often in colloquial speech, yet it is an excessively restrictive and outdated characterisation which does not capture the complexity and range of services offered today by investment firms in the sector.

These terms appeared in the early stages of development of online platforms, which at that time focused mainly on foreign exchange transactions.

Although the terms remained, both the sector and the offered product of investment firms have evolved far beyond their initial starting point.

Today, the term “financial technology” or “fintech” captures today’s reality of the sector with greater accuracy, as the services of investment firms include a wide range of financial instruments, such as CFDs on indices, commodities, shares, and others, which are supported by highly advanced technology and infrastructure.

Also, the attraction of clients, deposits, and withdrawals, as well as other related services, are carried out through electronic platforms and other electronic or digital means, with an emphasis on security and technological resilience.

It is a modern, technologically advanced financial sector.