In Cyprus, social trading forex brokers and other financial services companies are regulated by the Cyprus Securities and Exchange Commission, better known as CySEC. This is a reputable regulator in Europe which is now also a member of the European Securities and Markets Authority (ESMA). Thanks to this, the high trading leverage that used to characterize brokers in Cyprus is no longer available.
The concept of social trading, where traders can copy each other’s trades and interact with one another, is popular all over Europe, and Cyprus is no exception. However, the main reason for social trading brokers to register their brokerage in Cyprus is not to serve local Cyprus-based traders. Instead, most social trading brokers use the island as a base for their regional or global brokerage business, partly due to the lower taxes in Cyprus.