Last update: 28 August 2020
6 min read

How to Find the Best Brokers in Czech Republic

Want to find the best CNB regulated brokers available today? Read on to find out all about the history of the CNB, what their responsibilities are, and what you need to know in order to trade efficiently and safely.

Trading is a largely unregulated market for investment. However, many countries around the world where forex is traded are bringing in their own rules and regulations, and establishing regulatory bodies to oversee this lucrative industry. This helps protect investors and ensure participants are operating in a fair and honest way.

When anything new comes along there will be a wealth of individuals or businesses just waiting to scam naive investors out of their hard-earned cash. If you don’t want to become one of them, you need to seriously consider choosing one of the CNB regulated brokers offering its services.

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

  • HF Markets
  • EasyMarkets
  • HYCM
  • XM
  • FBS
  • FXTM

Best and most trusted forex brokers in April 2024

How the Czech National Bank is able to protect consumers

An Act passed in 2008 gave the Czech National Bank new powers regarding consumer protection. The new powers allow the CNB to accept suggestions, notifications from consumers and complaints, conducts inspections of supervised financial institutions, publishes opinions, and answer eligible inquiries.

The CNB’s new protection powers also involve it promoting financial literacy. Free manuals were handed out to local schools in 2008 and seminars were held for teachers. More recently, an interactive exhibition presented the work of the Central Bank and helped to increase young people’s interest in economics and finance.

What is the CNB – and what do they do?

cnb regulator logoCNB is the Czech National Bank. It is the central bank of the Czech Republic and the supervisor of Czech financial markets, including forex brokers in the Czech Republic. The bank has a significant history. But we’ll look at that a little further down the page. First, we’ll introduce you to some of its regulatory powers.

The main role of the Czech National Bank is to maintain price stability and achieve a low rate of inflation in the country. This is seen as a contribution to the country’s economic growth. But the CNB also supports financial stability and ensures the sound operation of the Republic’s financial system. It is also responsible for setting monetary policies, issuing banknotes and coins and overseeing the distribution.

In addition, the CNB supervises organizations and businesses operating in the banking sector, capital markets, pension funds, the insurance industry, electronic money institutions, credit unions, bureaux de change, and brokers in the Czech Republic. The CNB has a part to play in trading because it sets the rules and regulations for the industry. It presides over many financial institutions, including the best CNB regulated brokers. Should any organization or business not conform to the regulations it will be subject to restrictions or penalties.

What is a CNB regulated broker?

In order to understand the role of the CNB, it’s necessary to understand its history.

In 1918, the kingdom of Bohemia ceased to exist and, in its place, Czechoslovakia was created. The creation called for a new central bank and currency. This led to the first independent banking system being established. It was called The Banking Office of the Ministry of Finance.

This new office held the authority of the Minister of Finance and controlled the issuance and circulation of money, and the government debt. Between 1921 and 1923, the country’s economy suffered a significant economic downturn. Strong deflationary policies were put in place by the Finance Minister to try and prevent further hyperinflation.

Around 1926, the country enjoyed a period of economic prosperity. Manufacturing was successful, GNP reached an all time high and currency exchange was strong. At this time there were more than 100 banks and more than 200 credit unions. The American stock market crashed in 1929, and it wasn’t long before the Czech economy entered a depression. A further currency crisis was also created by the bank eliminating the ability to convert currency into gold. This resulted in a lot of unrest and several options were looked at to redress the balance.

Impact of WWII on the economy

The country’s economic recovery was hindered. World War II saw further changes when Czechoslovakia was annexed by Germany. It became part of Nazi Germany, and the National Bank became the National Bank for Bohemia and Moravia. The bank returned to its former name after the end of the war.

1950 saw the Central bank being nationalized and it became the State Bank of Czechoslovakia, formed under the new communist regime. Its role was expanded to that of a commercial bank, an investment bank, and central bank.

At this time the State Bank had a number of different roles. It was a supervisory agent of the government, was in charge of economic planning, issued credit to individuals and watched over other state-owned banks and savings banks, along with overseeing the Commercial Bank of Czechoslovakia which was in charge of foreign currency exchange.

Following the split of the Czech and Slovak Republic, the State Bank divided into two separate entities: The National Bank of Slovakia and the Czech National Bank.

The Czech National Bank and regulation of the best brokers

The Czech National Bank is the supervisor of the financial markets and has authority over the banking sector, the insurance industry, capital markets, credit unions, pension funds, payment system institutions, and brokers in the Czech Republic. It sets the regulations and rules for these industries and regularly checks in on them frequently.

Non-conforming organizations and businesses are subject to penalties and restrictions levied by the CNB. The Czech National Bank is responsible for determining the value of the country’s currency, the Koruna, against foreign currencies. It makes continuous adjustments and fixes the exchange rate.

Finding the best CNB regulated brokers could prove tricky as there are not a great deal compared to, for example, CySEC regulated brokers. The good news is that these are EEA-authorized so you can switch between the two as it suits you.

Lodging a CNB complaint

If you want to make an official complain to the CNB regarding a broker, head to their website. You’ll find an online form which makes it easy to fill out the key details including reference numbers and the chance to add attachments. This means you can send a complete complaint which will be quickly attended to.

Spotting a CNB regulated broker

There’s no secret to finding a CNB regulator – most brokers will openly provide their license number on the footer of the page. But you can also check the official CNB website, which has a full list of all the best CNB regulated brokers.

Frequently Asked Questions (FAQs)

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