Last update: 28 August 2020
6 min read

Guide to Forex Trading in Portugal and CMVM Regulated Brokers

Are you looking to find out more about the best CMVM regulated brokers? If you want free advice from industry experts, you’re in the right place. We’re here to give you all the information you need on what the CMVM is and what they do – plus tips on how to stay safe when trading.

Trading was once the investment of choice for banks and large businesses, but it is now possible online for everyone. Traders are located all over the world, but there is no single regulatory authority to oversee the industry. Countries are left to develop their own regulatory system and not all offer the same level of protection.

Some regulatory bodies have better reputations than others, but for those traders located on European Economic member states, there is a basic level of protection provided by MiFID. So what about those of you looking for forex brokers in Portugal?

If you can’t find many CMVM regulated brokers, try some of the best CySEC regulated brokers:

  • Hot Forex
  • XTB
  • HYCM
  • XM
  • Plus500
  • FXTM

Best and most trusted forex brokers in April 2024

Finding the best CMVM regulated brokers

If you’re looking for the best CMVM regulated brokers, you might notice that your options are slightly limited. However, we have good news; your passporting rights mean you can make use of EEA regulated brokers. That’s why we listed some of the best CySEC brokers at the top of this page.

Which CMVM regulations make the best brokers safe?

The regulations for CMVM regulated brokers and other regulated entities comprise of rules relating to the functioning of the financial markets and any respective operators. The CMVM is responsible for publishing monthly bulletins to keep consumers informed, and these are available on the CMVM website. The bulletins include news of:

  • New regulations
  • Recommendations in relation to individuals which are subject to supervision
  • Instructions defining internal processes and procedures of entities
  • General opinions in relation to issues raised in writing by any of the supervised entities or associations

The goals of the CMVM are to protect investors, provide for the efficient and regular functioning of markets, reduce risk, control information, and prevent and suppress illegal acts.

The CMVM protects investors as this section of the industry have difficulty defending their rights, and it does this through constant supervision and regulation defined in law. It also provides support for the general public and, in particular, investors. The CMVM offers a number of services for the general public including investor assistance, conflict mediation, and an investor compensation scheme – all of which are requirements of MiFID.

What is MiFID?

MiFID is a Directive on Markets in Financial Instruments, which came into force in April 2004 and was implemented on November 1st, 2007. It is a European Union law intended to provide harmonized regulation for investment services in all countries of the European Economic Area, including Portugal.

The main objections of the legislation are to increase consumer protection and competition in investment services. Brokers in Portugal are able to take advantage of passporting rights provided by MiFID if they perform both investment services and activities. Passporting rights allow a broker to provide its services in all member states.

Any firms covered by MiFID have to be authorized in the country in which they have a registered office. Once it has been authorized, it is possible for the company to use the MiFID passport to provide services in other EU member states – while remaining under the regulatory body of its registered office.

MiFID is currently under review and MiFID II should come into force by 2018.

What is the CMVM and what do they do?

logo of Portugal cmvmThe Portuguese Securities Market Commission, in Portuguese Comissão do Mercado de Valores Mobiliários, also known as CMVM, was founded in 1991. It was given the task of supervising and regulating financial instruments and securities markets. In addition, it oversees the operations of those participating in the markets and providing services.

The CMVM is an independent public institution that enjoys administrative and financial autonomy. It receives no funding from the General State Budget, but instead makes its income from supervision fees which it charges for its services. This including those paid by CMVM regulated brokers.

As well as regulating brokers in Portugal, it’s also responsible for the operations of the securities markets, all market operators, and public offerings. And generally, all matters relating to these areas. CMVM is a member of IOSCO, the International Organization of Securities Commissions and the CESR, the Committee of European Securities Regulators. It is actively involved in the work of both groups and helps to bring together the securities, insurance and banking sectors around the world, and in Europe.

Making a complaint to the CMVM

The CMVM has developed a department with the aim of providing investors with service information, education, and complaints. The name of the department is the Investor Assistance and Communication Department (DAIC – Departamento de Apoio ao Investidor e Comunicação).

By providing these services, the CMVM is looking to reinforce investor confidence in the securities markets and those operating in the sector. They also want to help consumers gain a better understanding of all savings and investment matters.

As well as an online complaint form for disgruntled traders to complete, there is also a form for reporting suspicious transactions. If you are unable to reach an amicable resolution to your complaint, there is also the option of conflict mediation. The Conflict Mediation Service was created to protect non-institutional investors in the area of the activities of financial intermediaries, independent consultants, and the management bodies of securities markets or issuers. It is able to mediate between parties, pacify parties in order to reach a consensus and to resolve conflicts.

Using a conflict mediation service provided as part of the services of CMVM allows both parties to express their opinions freely. It is a swift, informal and confidential form of non-regulated intervention.

The Investor Compensation Scheme (SII)

The CMVM also operates an Investor Compensation Scheme. The Scheme is designed to protect investors in the event of an entity being unable to repay or return money or financial instruments belonging to the investor.

The scheme is only for small investors and excludes institutional investors such as credit unions, insurance companies, financial institutions, and entities of the general government sector. The maximum compensation available is €25,000 per investor.

Now you know all there is to know about the best CMVM regulated brokers, it’s time to start your search. Your choice is going to be a little limited if you only look for CMVM regulated brokers, so don’t forget about passporting rights of forex brokers in other EEA member states.

Checking for CMVM regulation

How can you find out if a broker is really CMVM regulated? Well, the first step is to take a look at their website. Have a quick glance at the bottom of the page, or the ‘About Us’ section. You’ll usually see the license information here.

It’s also a good idea to double check this on the official CMVM regulator. Even though it’s very rare for a broker to post false information about being CMVM regulated, it’s still a good idea to make sure they appear on the official webpage as well.

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