Last update: 28 August 2020
7 min read

Maltese MFSA Regulated Forex Brokers

If you need to find the best MFSA regulated brokers, you’re in the perfect place. Below you’ll find our free expert guide which will explain what MFSA is, what their roles and responsibilities are, and what you need to know in order to find the top brokers regulated by the MFSA.

Malta is cashing in on its strategic central location and becoming a strong contender within the world of financial market trading. It has also greatly benefited from its full membership of the European Union, which was completed in 2004. It is an independent country located in the middle of Europe, and is proving to be a very attractive proposition for international financial services and brokers. The country is registering strong growth in both the insurance and investment funds sectors. Banking, wealth management sectors, and trusts are also experiencing strong growth in Malta.

If you can’t find many MFSA 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

Where can I find the best MFSA regulated brokers?

If you’re looking for the top brokers accessible to people in Malta, you have a lot of options. This is because CySEC regulated brokers are also available in the country.

Read the rest of our guide to learn more about EEA-authorized brokers.

Are MFSA regulated brokers safe?

The Markets in Financial Instruments Directive 2004/39/EC provides harmonized regulation for investment services across all member states of the European Economic Area. It is designed to increase competition and consumer protection in investment services.

MFSA licensed brokers are not necessarily authorized under MiFID to provide their services and therefore passporting may not necessarily apply. The reason for this is that the acquisition and holding of investment services do not fall under the MiFID definition of an instrument.

However, it does include the provision of financial instruments such as:

  • Futures
  • Options
  • Derivatives
  • Swaps in relation to yields, interest rates, securities or currencies

In these cases, the MFSA regulated broker will be eligible for passporting rights. What are passporting rights? Quite simply, it is an authorization which allows a broker regulated in Malta to offer its services to all European Economic Area member states.

The result of all of this regulation is that the best MFSA regulated brokers make for a safe place to trade.

What does the future hold for financial services and brokers in Malta?

The operational and service framework in Malta is continuing to improve in strength. Its regulatory processing efficiency is certainly noteworthy and the set-up and ongoing costs of a new business are making this location an increasingly attractive proposition. Ultimately, this will only be of benefit for new traders.

Remember to choose an MFSA regulated broker as this offers the best level of protection possible for safeguarding your funds.

What is MFSA?

mfsa-logoThe entity in charge of regulating the financial industry is the Malta Financial Services Authority (MFSA). It has a well-developed infrastructure and regulatory framework which is just one of the reasons it has become a popular location for investment firms.

In areas such as financial market sophistication, the MFSA ranks very highly, though it’s also strong in the areas of banking, health and education. The MFSA is a regulatory agency with a solid reputation for maintaining high standards of compliance. But, at the same time, it is able to eliminate unnecessary complexities and uncertainty for investors.

Malta also has an excellent reputation for its top-notch banking systems, which have only been improved by the reliable, time-honored principles its leading credit institutions have stuck to. The country has been able to tempt a number of experienced market players in the sector of foreign exchange. These experts include trading platform developers, forex asset managers, and brokers. Malta provides all these and more with a great entry point into the EU market.

In addition to the above, it has become popular for a business dealing in rolling spot forex and derivative contracts and for these entities to apply for official licensing and regulation.

What does the MFSA do – and how is MiFID involved?

There are a number of reasons Malta has become such a popular location for participants in financial markets trading, aside from its central location. It has very attractive levels of corporate tax, a solid regulatory framework, and access to Europe which is permitted under the Markets in Financial Instruments Directive (MiFID).

MiFID is a European Directive that aims to bring about a harmonized regime for the authorization and operation of investment firms operating within the EU. The country has enjoyed increased interest from niche operators such as e-money, trade finance, and trading operators.

Many countries across Europe are experiencing a tightening of the belt with regards to banking regulations which have led entrepreneurs to look further afield than the normal channels of investment. Malta is able to fulfill all the necessary criteria and the number of forex brokers in Malta looks set to keep on rising.

What is a MFSA regulated broker and how do licenses work?

Carrying out investment services in Malta is a licensable activity under the Investment Services Act Chapter 370 of the Laws of Malta. It requires the completion of a formal application during which the integrity and competency of the applicant will be assessed. There are five different types of license available:
Category 1a – This license will authorize the holder to receive and transmit orders in relation to one or more financial instruments. Also to provide investment advice and place instruments without any firm commitment
Category 1b – This license authorizes the holder to place instruments without a firm commitment on behalf of professional clients only
Category 2 – This license authorizes the holder to provide an investment service and to hold or control clients money but not to deal on their own account or underwrite or place instruments on a firm commitment basis
Category 3 – This license authorizes the holder to provide an investment service and to hold and control clients money or customer assets
Category 4 – Category 4 license holders are authorized to act as trustees or custodians of collective investment schemes
The category of license you will be more interested in will be Category 3 and 4. A forex company dealing on its own account will require a Category 3 license from the MFSA. However, a white label partner, or one who will only be matching trades with one entity being the client and the other acting as a counterparty to the trade, will require a Category 2 license. In terms of regulations, forex refers to the trading of currencies. But it is possible for a license holder to deal in financial instruments on their own account and to provide other types of investment service, as long as it is covered by an individual license.

Can I complain to the MFSA?

Inevitably, there will be some occasions when you have an issue with your broker – even if they’re MFSA regulated. The best thing to do is speak to your broker directly. Often, you’ll be able to solve the problem quickly.

If that doesn’t work, you can complain to the MFSA. All of their contact information can be found on their website. They also state that, if that doesn’t work, your third and final option is to take the matter to the courts.

How do I find out if a broker is MFSA regulated?

It’s easy to check if a broker is MFSA regulated. When you’re on their website, you’ll usually be able to find the license number at the bottom of the page, or in an ‘About Us’ section.

But some traders put up fraudulent information. That’s why it’s best practice to also check the official MFSA website. Their list of all current brokers with a license is all the proof you need that the company is legitimate.

Frequently Asked Questions (FAQs)

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