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Federal Financial Supervisory Authority (BaFin) Brokers 2024

Written By

James Barra

Written By

James Barra

James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.

» James Barra Profile Page

Edited By

William Berg

Edited By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

» William Berg Profile Page

Fact Checked By

Jemma Grist

Fact Checked By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

» Jemma Grist Profile Page

Updated

Oct 22, 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:

Click a broker for details

1. 1

   
   IG
   Go To IG

   IG Review

   Forex trading involves risk. Losses can exceed deposits.

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   Ratings

   Regulation & Trust 4.9 / 5

   Accounts & Banking 4 / 5

   Assets & Markets 4.5 / 5

   Fees & Costs 3.5 / 5

   Platforms & Tools 4.9 / 5

   Customer Support 4.5 / 5

   Research 4.9 / 5

   Education 5 / 5

   iOS App 4.6 / 5

   Android App 4 / 5

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   Minimum Deposit $0

   Minimum Trade 0.01 Lots

   Leverage 1:30 (Retail), 1:250 (Pro)

   Regulator FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM

   Instruments CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting

   Platforms Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral

   Payment Methods PayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit Card

   Account Currencies USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

   Go To IG

Here is a short summary of why we think each broker belongs in this top list:

1. 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

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.
• IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, plus recently added US-listed futures and options, providing ample diversification opportunities.
• As a well-established broker, IG operates under strict regulatory guidelines in multiple jurisdictions, maintaining a high level of trust.

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.
• IG has discontinued its swap-free account, reducing its appeal to Islamic traders.

Visit IG

IG Review

Methodology

To identify the top brokers regulated in Germany, we:

How Can I Check A Broker Is Regulated By The BaFin?

Checking a broker is regulated by the BaFin is straightforward:

1. Navigate to the BaFin’s Database of Companies
2. Enter the broker’s name or BaFin-ID in the left-hand search bar and press ‘search’
3. 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.

James Barra

Author

• 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.