Where Brokers Can Offer CFDs Around the World – Regulations Breakdown

In some countries where retail margin FX trading is allowed, CFDs are specifically banned.

Following up on our recent regulatory overviews of forex trading and binary options, we are proud to present you with a detailed breakdown of contracts for difference (CFD) regulations around the world. CFDs are popular instruments to gain leveraged exposure to commodities, stocks and indexes.

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It is very important for international firms that offer online trading to know where CFDs are banned despite the fact that forex trading is regulated. For this purpose, Finance Magnates Intelligence analysts have mapped out regulations relevant to forex brokers and traders by country, and we have visualised the information in the form of regional maps.

The United States is the biggest example of a country where licensed forex dealers are not allowed to offer CFD trading. American forex traders who wish to have exposure to gold, oil or the German DAX 30 need to turn to traditional options with the very limited leverage they offer in comparison to forex.

In South America the giant market of Brazil is off limits for CFDs while Chile allows trading on the instruments.

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In Europe CFDs are a common necessity that all brokers offer. In France there are restrictions on the marketing of CFD products and in Germany not protecting clients from negative balances is not allowed. In Poland brokers have to publish statistics on the profitability of their CFD accounts.

 

Like in the US, the regulator in Hong Kong forbids trading on CFDs while forex is accepted and widespread.

It’s important to remember that the situation can change from time to time. The following maps offer a snapshot of the market as it is in April, 2017. Keep following Finance Magnates to stay up to date with the latest developments.

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