CNB is the abbreviation for the Central (National) Bank of the Czech Republic, and it is the supervising authority of the Czech financial market. When we say financial market, we mean the capital market (including the Forex market), pension funds, insurance, credit unions, etc. The CNB is a part of the European System of Central Banks and its main duties include managing the monetary policy in the country and circulation of the currency. Transparency, healthy competition, fair market conditions, and market integrity belong to the main objectives of the Czech Central Bank. Investors, depositors, and other participants in the market enjoy the protection of their rights under the law. The CNB is an autonomous institution, and no one has the right to interfere with its decisions, unless a legal basis is provided. The Czech Republic is a part of the EU, which means that it has to comply with the EU legislation. Regarding the Forex market, the CNB has to operate within the legal framework of the MiFD directive which refers to the securities and financial market in the EU. It promotes best practices, imposes high standards, and provides protection of consumers.
Forex in the Czech Republic
Since the Forex market has become an online virtual market, its popularity has not stopped rising. On a global level, Forex is the market with the biggest turnover counting billons and trillions of dollars per day. The Czech Republic has also become a home to many Forex companies which successfully run their business from the charming European country. A number of Czech traders keep the market busy by investing, losing, and winning, or simply, by being actively involved. International Forex companies based in the Czech Republic are usually those who have offices all over the world. Czechs can easily find a broker in their country who will enable them to safely enter the market.
CNB Regulated Brokers
CNB regulated brokers have to fulfill a set of criteria and run their business according to the best EU practices regarding financial markets. This means that they agree to be fair market participants and to use fair means to attract new and keep old clients. Misleading advertisements are strictly forbidden and liable to penalties, i.e. information provided by the broker has to be accurate and correct. This means that traders will not be tricked into joining a CNB regulated broker under false pretenses. Traders and investors appreciate such broker, as well as the CNB for preventing malversation and providing safety and security.
Top Forex Brokers in the Czech Republic
Some of the CNB regulated brokers count to the best brokers in the Czech Republic, as some of the globally renowned Forex companies have an office in Czech. But, some of the domestic Forex brokers are also in the top league. Let us see what are the necessary qualities a Forex company should possess to classify as a top Czech Forex broker.
The first thing is and always will be a proper license. Forex brokers without a license are extremely suspicious. Even if they have good intentions, it is highly risky to engage in a business relationship with no legal coverage. In the Czech Republic, only brokers who are approved by the CNB have the right to run their business. If you are looking for a Czech broker, search through the broker’s website until you find the list of licenses (or just one license). If you cannot find it, then, the broker is probably unlicensed. To be completely sure, you can their call customer support and ask.
How Safe Are CNB Regulated Brokers?
CNB is a major financial institution. As a central bank of a European Union nation, the bank cannot afford to act rashly or make decisions that would compromise their integrity. It is for this exact reason that all Forex brokers who receive CBN licenses can be considered extremely safe. Every broker who is issued a license by CNB has to comply with a set of regulations and rules that highly restrict any attempt of fraud or dishonest business. Many companies have applied for the license but due to the fact they did not meet all the requirements, were refused and turned back.
Unregulated Forex Brokers In Czech Republic
Of course, with the Forex market being so lucrative, many brokers would like a piece of the action and those who do not receive the proper permit may still attempt to trade without it. This type of offence is subject to extreme monetary fines or even jail time should a broker be caught operating without a license. While this is rarely the case, you may stumble upon a broker who is operating unregulated. Whenever you are registering with a broker from Czech Republic, we recommend looking for proof of a CNB license, as it is the only governing body in the country capable of issuing such licenses.
Reliable Forex Brokers
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Start Trading With CNB Brokers
If you are a Czech citizen or an international forex trader looking for action in Czech Republic, looking for a CNB regulated Forex broker is the only way to go. Fortunately, the Czech brokers receive their licenses directly from the country’s central bank, making them as secure as they come. You can start trading with CNB regulated brokers today, provided you meet the requirements and are from the countries allowed to trade with such platforms and a small deposit may take you a long way down the Forex trading path.