Forex Brokers in the Netherlands
Trading forex is popular in Holland, with traders and investors looking to make a profit from speculating on falling and rising currency pair prices. Traders in the Netherlands are free to use any forex broker that can accept residents of the country. However, if you prefer to use a regulated broker that is based in Holland, then the Netherlands Authority for the Financial Markets (AFM) is the financial regulatory body to look out for.
Best forex brokers Netherlands
To find the best forex brokers in the Netherlands, we created a list of all the regulated forex brokers that accept traders from Holland, then ranked them based on our overall rating. You can see our list of our top forex brokers for the Netherlands below.
ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA
AFM forex brokers in the Netherlands
AFM regulation means that a forex broker must follow the stringent rules and procedures of the Authority for the Financial Markets (AFM). The AFM is the conduct supervisor for the financial markets. This means that the AFM supervises conduct in the entire financial market sector: savings, investing, trading, insurance and lending.
AFM is the financial regulator in the Netherlands, and trading with AFM regulated forex brokers means that traders in Holland have some protection should something go wrong. It can give them peace of mind so that they can focus on their trading without worrying about the safety of their broker.
AFM is responsible for all banking as well as non-banking financial companies that operate in Holland, and the agency reports directly to the Ministry of Finance for regulatory supervision and guidelines. All financial markets, including forex, commodities, stocks, CFDs, futures, options, and other OTC products come under the direct supervision of the AFM.
The AFM attempts to ensure the honest and transparent operation of forex brokers, the stability of financial sectors and customer protection. The main responsibility of the body is to inspect the market for any inconsistencies and detect trading offerings and manipulations.
The AFM has a detailed regulatory structure that clearly establishes the ground rules for operating in the Dutch financial markets. Forex brokers in Netherlands are only allowed to offer their products and services to Dutch traders if they have an AFM license or a permit under the EU derivatives. All foreign brokers without a valid EU license should not offer services to traders or investors in Holland.
The AFM has been responsible for supervising the operation of the financial markets since 1 March 2002. As an independent market conduct authority, they contribute to a sustainable financial system and prosperity in the Netherlands.
The AFM conducts its supervision by means of inspections, enforcement and transfer of standards, and in so doing expressly monitors signals originating from the market and findings from its own control organisation.
If the AFM identifies any breaches, it can impose sanctions. It may issue instructions or public warnings, place institutions under undisclosed custody, withdraw licences, cancel or refuse registrations or file reports with the Public Prosecution Service. The AFM is also authorised to impose fines and orders for periodic penalty payments.
How to verify AFM regulated brokers in Holland
Forex brokers can legally operate in the Netherlands as long as they receive official authorization from the local regulator, the AFM. The Dutch regulatory framework largely overlaps with the requirements outlined by the European Securities and Markets Authority (ESMA).
You can get the broker’s license number from the disclosure text at the bottom of their homepage. You can then look up this number using the AFM financial registrar to confirm if the forex broker is regulated in Netherlands.
Is forex trading legal in the Netherlands?
In the Netherlands, forex brokers are permitted to conduct business as long as they have official authorisation from the AFM, the regional regulator. The European Securities and Markets Authority’s criteria and the Dutch regulatory framework are similar in many ways (ESMA).
Licensed brokers are required to disclose every aspect of their business operations, and they must also regularly report their trading volume to the local authority. Additionally, they must inform the AFM if their issued capital has changed by more than 1% in the previous three months.
The businesses are required to consistently submit financial statements. This makes it possible for the AFM to keep a close eye on its licensees’ financial operations and ensure that they comply with its rules. Additionally, it stops them from engaging in any dishonest or unfair actions.
More crucially, before they can begin doing business, forex companies must set up local offices and acquire the required licenses if they want to offer trading services in the Netherlands. Brokers licensed in other top-tier EU jurisdictions are permitted to legally conduct business in the nation by the AFM under MiFID regulations.
Segregated accounts should be used to hold both the operational capital of the businesses and the money of their clients. The goal of the insurance is to protect client funds in the event that a certain brokerage declares bankruptcy.
These stringent operational standards provide a significant incentive for regional Forex traders. They can benefit from greater trading conditions and high levels of safety without worrying about the dangers of financial fraud and irregularities.
A very helpful registry is available on the Dutch regulator’s website, allowing local businesses to confirm an organization’s authorization before using its services. The Dutch public can stay up to date on the most recent financial frauds thanks to the regular publication of newsletters and public alerts about malpractices.
To guarantee that it upholds the current norms of supervision in Europe, the Netherlands’ regulatory framework for forex trading is routinely updated. One of the most recent modifications took place in 2019 and is related to the rules governing retail trading in binary options and contracts for difference (CFDs).
The new regulations prohibit the promotion, sale, and distribution of binary options to retail traders from the Netherlands as of April 2019. Additionally, permanent limitations on the sale of CFDs were put in place in accordance with the earlier directives from ESMA. Companies with offices in the Netherlands as well as those from other EU members are subject to the regulations.
Brokerages that allow Dutch clients to trade CFDs on margin must implement negative balance protection procedures that are comparable to those in France and Germany and other EU nations. This safeguard stops retail traders from losing more money than they have in their accessible account balance when they use leverage.
Each CFD broker is required to post a standardized risk notice on its website that details the percentage of retail clients who experience financial loss as a result of leverage. Providers of CFDs are also forbidden from rewarding new customers with bonuses.
To prevent novice investors from experiencing substantial losses, opening positions are subject to maximum leverage limitations. The precise limit depends on the volatility of the particular instrument and is product-specific.
The general rule is that a product’s maximum allowable leverage will be lower the riskier it is. The maximum leverage for key Forex pairs is 30:1, 20:1, major indices, gold, main commodities, 5:1, individual stocks, and 2:1 for cryptocurrencies, respectively.
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