What is BaFin and which forex brokers are regulated by it?

RegulationLast verified 2026-08-09Reviewed by editorial team

Quick Answer

What is BaFin and which forex brokers are regulated by it?

BaFin (Bundesanstalt fur Finanzdienstleistungsaufsicht) is the German federal financial supervisor, widely considered the strictest EU regulator. Only a handful of retail CFD brokers hold a direct BaFin licence for their EU operations — the notable ones are Pepperstone (Pepperstone GmbH), IG (IG Europe GmbH) and CMC Markets (CMC Markets Germany GmbH). Most other EU-facing brokers passport in from CySEC instead. BaFin regulation is often preferred over CySEC by risk-conscious EU traders.

BaFin supervises banks, insurance companies, securities firms and financial services in Germany.
BaFin was established in 2002 through the merger of three predecessor regulators.
BaFin-licensed retail CFD brokers include Pepperstone (Pepperstone GmbH), IG (IG Europe GmbH) and CMC Markets (CMC Markets Germany GmbH).
BaFin is known for proactive enforcement and higher capital adequacy requirements.
German clients of BaFin-licensed firms are covered by the Entschaedigungseinrichtung compensation scheme.

Last verified: 9 Aug 2026 by FX-Brokers.info editorial team

How this answer was verified

Cross-checked against broker-published fact sheets, regulator licensing databases, and ESMA product intervention notices.
Reviewed by the FX-Brokers EU editorial desks (Markets, Platforms, Regulation). Desk structure disclosed at /about/editorial-desks.
Refreshed quarterly. The most recent verification date is shown above. Read our methodology.

What is CySEC and why does it matter for forex traders?

CySEC (Cyprus Securities and Exchange Commission) is the financial regulator of Cyprus and the most common EU regulator for retail forex brokers. CySEC-licensed brokers comply with MiFID II, ESMA rules, and the Investor Compensation Fund which protects eligible clients up to EUR 20,000 in the event of broker insolvency.

What is the best forex broker in Europe in 2026?

Our editorial team's top pick for EU traders in 2026 is Pepperstone (9.4/10), followed by IG (9.2/10) and XM (8.7/10). Pepperstone wins on its multi-regulator coverage (CySEC 388/20 for EU/EEA clients, plus FCA, BaFin and ASIC across the group), a zero minimum deposit and raw 0.0-pip spreads. IG offers the broadest market coverage with 17,000+ instruments. XM adds CySEC cover and strong education. Exness, though highly rated globally, closed EU/EEA retail onboarding in 2019 and does not accept EU residents, so it is excluded from EU shortlists.

What are the ESMA leverage limits for retail forex traders?

ESMA limits retail forex leverage to 30:1 on major currency pairs, 20:1 on minors and major indices, 10:1 on commodities and non-major indices, 5:1 on individual equities, and 2:1 on cryptocurrencies. These limits apply to all EU/EEA regulated brokers since 1 August 2018.

Article: CySEC vs BaFin: Which EU Regulator Offers Better Protection?

Cyprus and Germany are the two most popular EU regulatory hubs for forex brokers. We compare CySEC and BaFin on enforcement, compensation schemes, oversight rigour, and what it all means for your trading account.

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What is BaFin and which forex brokers are regulated by it?

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Free: Broker Regulatory Cheatsheet