Federal Financial Supervisory Authority (BaFin) Brokers 2024
The Federal Financial Supervisory Authority, better known as BaFin, is Germany’s chief financial regulator that oversees online brokers. Considered a ‘green-tier’ regulator in line with our Regulation & Trust Rating, it ensures excellent safeguards for traders in Germany.
Authorized platforms must comply with various regulations, notably the Securities Trading Act. Brokers that fail to comply risk hefty penalties, with the BaFin issuing 40 fines totaling over €8.1 million in 2023 alone.
We’ve identified the best brokers regulated by the BaFin, after personally verifying their credentials on the regulator’s Database of Companies.
Top BaFin Brokers
These 1 BaFin-regulated trading platforms go the extra mile for day traders:
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1IGForex trading involves risk. Losses can exceed deposits.
Ratings
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFMCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD
Here is a short summary of why we think each broker belongs in this top list:
- IG - Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand-US offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
BaFin Brokers Comparison
Broker | Regulated by BaFin | EUR Account | Minimum Deposit | Markets |
---|---|---|---|---|
✔ | ✔ | $0 | CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting |
IG
"IG continues to provide a comprehensive package with an intuitive web platform, best-in-class education for beginners, advanced charting tools bolstered by its recent TradingView integration, real-time data, and fast execution speeds for experienced day traders."
Christian Harris, Reviewer
IG Quick Facts
Demo Account | Yes |
---|---|
Instruments | CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting |
Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM |
Platforms | Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral |
Minimum Deposit | $0 |
Minimum Trade | 0.01 Lots |
Leverage | 1:30 (Retail), 1:250 (Pro) |
Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis.
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met.
- The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading, while IG has also added TradingView integration.
Cons
- Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges.
- While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients.
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests.
Methodology
To identify the top brokers regulated in Germany, we:
- Scanned our database of 267 brokers to identify those who claim to be regulated by the BaFin
- Ran their company credentials through the public register to verify they were authorized
- Ranked them by their rating, blending 100+ data points with the findings of our testers
How Can I Check A Broker Is Regulated By The BaFin?
Checking a broker is regulated by the BaFin is straightforward:
- Navigate to the BaFin’s Database of Companies
- Enter the broker’s name or BaFin-ID in the left-hand search bar and press ‘search’
- Click on the ‘selected’ companies to check details, such as authorized activities and date issued
Below you can see the results of a search I ran on CMC Markets (sports one of the best charting platforms I’ve used), showing the broker is authorized.
Below you can see the results of a search I ran on eToro (offers a fantastic social trading network), showing the broker is not authorized.
What Rules Must BaFin-Regulated Brokers Follow?
Online brokers regulated by the German Bundesanstalt für Finanzdienstleistungsaufsicht, or Federal Financial Supervisory Authority, must follow a robust set of rules to safeguard retail investors and the country’s financial system, notably:
- Brokers must deliver high-quality order execution, considering speed, price and likelihood of execution (key for short-term traders).
- Brokers must display risk warnings on websites, apps and social media, indicating the number of clients losing money trading products like CFDs (vehicle of choice among many day traders).
- Brokers must not offer leverage beyond 1:30 and should close out open CFD positions when an account’s total margin drops to 50%.
- Brokers must provide negative balance protection so clients can’t lose more than their balance while trading on margin (popular with active traders).
- Brokers must use segregated accounts with German banks to protect client money in case of broker insolvency.
- Brokers must routinely report financial and other relevant information to the BaFin.
- Brokers must not use bonuses to entice investors to deposit more money.
- Brokers must meet minimum capital requirements of €750,000.
Brokers that fail to satisfy the regulator’s rules risk enforcement action. For example, Degiro, one of the largest brokers in Europe and part of German-listed Flatex bank, was handed a €1,050,000 fine in 2023 for internal control failings relating to its money laundering and risk management systems.
The BaFin have also published a number of useful reports over the years that aim to educate retail investors about the risks of online investing, popular short-term trading products, and trends in the German financial markets.
I recommend reading the articles I’ve collated below.
- Beware of fraud
- Crypto tokens remain a risk for consumers
- Risks of CFDs – every other provider fails to comply with the requirements
- The promises neo-brokers make – and the ones they keep
Bottom Line
Choosing a broker regulated by the BaFin is advisable for German day traders. This highly trusted, widely respected and proactive regulator helps ensure authorized brokers provide a secure, transparent and fair trading environment.
That said, online trading remains risky, even when you use a German-regulated broker. As such, only deposit what you can afford to lose.
Article Sources
- Federal Financial Supervisory Authority (BaFin) Website
- Database of Companies - BaFin
- Securities Trading Act - BaFin
- European Passport for Securities Trading Firms - BaFin
- Degiro Fine - BaFin
- Financial Services Fine Tracker - SteelEye
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