5 Best ESMA Forex Brokers in 2021

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Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

ESMA regulated Forex / CFD brokers offer traders one of the world’s tightest regulatory regimes with a high level of customer protection. Maximum leverage on Forex is capped at 1:30 while bonuses are banned, although neither of these issues should deter traders. Many of the best Forex brokers in the world enjoy their status as an ESMA regulated entity. We have reviewed them all and present our detailed broker by broker findings below.

1
FXTM
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best all around broker
High floating leverage + fast execution
2
FP Markets
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
ECN-style trading
Daily market research and Autochartist access
3
AvaTrade
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
4
Markets.com
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Marketsi strategy builder helps traders trade smarter
Competitive trade execution with low slippage
CFD service 72% lose money
5
Plus500
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best platform for new Forex traders
Trailing stop losses
Get Started
CFD service 72% lose money

FXTM
5.0/5 in this category
In Summary
Best all-around: high floating leverage + fast execution

We have made FXTM our top-rated broker because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.

Unique Features

Regulation

CySEC, FCA, FSC, CMA

Minimum Deposit

$50

Type of Platform

MetaTrader 4, MetaTrader 5

FXTM, or “ForexTime”, has been around for a long time: they were founded in 2011. Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U.K., Cyprus, Mauritius, and South Africa. The brand is owned by private companies incorporated in the U.K., Cyprus, and Mauritius. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks. Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers.

FXTM offers traders a choice between two of the most popular execution models: customers may open either an ECN-type account, or one that trades by “straight-through processing”. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer.

Through their Mauritius regulator, FXTM offer leverage as high as 1000 to 1. In the U.K. and Cyprus, they are limited by law from offering more than 30 to 1.

If you are looking for a broker with a good copy trading program, it is worth taking a serious look at FXTM’s “FXTM Invest” copy trading program.

FXTM Pros & Cons

Advantages

  • Excellent client deposit protection

  • Low minimum deposit

  • Free MT4 add-ons and VPS hosting

  • Good educational tools

Disadvantages

  • No cryptocurrencies or exotic currencies

  • Low leverage for retail traders

  • Internal withdrawal fees and an inactivity fee

FP Markets
5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500

fpmarkets is an Australian brokerage which launched in 2005. Headquartered in Sydney, Australia’s financial capitol, they have carved out a solid niche for themselves as the best Forex / CFD broker enjoying ASIC regulation. Australian regulators are much more relaxed about leverage than their counterparts in the U.S.A., U.K., and the E.U. and so fpmarkets can offer a maximum leverage as high as 500 to 1.

For most traders, the standout unique selling point of this broker lies in the incredibly wide range of tradable assets offered, providing an opportunity to trade over ten thousand individual stocks and shares. These go beyond the typical U.S.A. and U.K. companies and include a good selection of publicly traded shares on the Hong Kong and Sydney exchanges, as you might expect from an Australasian-facing broker like fpmarkets. Also, over 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin are also on the menu here.

Unique Features

Regulation

CySEC, ASIC

Minimum Deposit

$100

Type of Platform

MetaTrader 4, MetaTrader 5, Web-based, IRESS

They offer an unusual hybrid ECN/STP execution model which means that their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.

Traders can scalp and hedge at this broker, whose fast ECN execution speed makes it a natural home for scalpers. Clients may choose between the MetaTrader 4 and MetaTrader 5 platforms, and shares can be traded through the IRESS trading platform which includes access to level 2 exchange data.

FP Markets Pros & Cons

Advantages

  • Choice of trading platforms and auxiliary trading tools

  • Very competitive cost structure and excellent asset selection

  • Low minimum deposit requirement and leverage of up to 1:500

  • Well-regulated and trustworthy

Disadvantages

  • Availability of Iress geographically restricted

FP Markets is an Australian multi-asset broker with more than $1 billion in daily trading volume, serving clients from 80+ countries. Founded in 2005 in Australia, FP Markets grew into a trusted brand over the past 15+ years with more than 100 employees. The upgraded MT4/MT5 trading platforms, via the Trader Tools consisting of twelve plug-ins, present clients with a competitive edge. We have conducted an in-depth review of this CFD broker to provide traders with a complete overview of the trading environment at FP Markets.

AvaTrade
5.0/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade was founded in 2006 in Dublin, Ireland. They are one of the largest and most famous Forex / CFD brokers in the world and became well-known for offering their clients a choice of fixed or floating spread cost of trading models. They enjoy an extremely high and strong level of regulation, making them a favorite for traders who are extremely nervous about the security of their deposit, which in Ireland can be protected by a strong investor deposit protection provision. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava’s maximum leverage offered runs as high as 400 to 1.

Unique Features

Minimum Deposit

$100

Type of Platform

MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based

In addition to their longevity and safe reputation, clients know that through AvaTrade they have access to a broad range of asset classes through which diversification can be achieved successfully: AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. Even better, and unusually, 2 bonds and 6 ETFs are also on the menu. The diversity offered here stands out.

Whether you are located within the European Union or not, all branches of AvaTrade will offer you negative balance protection, above and beyond what is mandated by the law. This means that under no circumstances will any client of AvaTrade ever be held liable by the firm for an amount larger than their deposit.

 

AvaTrade Pros & Cons

Advantages

  • Well-regulated globally, with the Bank of Ireland, the primary regulator

  • Low minimum deposit and in-depth educational tools

  • Wide asset choice across seven sectors

  • Superior mobile trading platform

Disadvantages

  • Low leverage for retail traders

  • High quarterly inactivity fee

  • Unacceptable cost for AvaProtect

Markets.com
5.0/5 in this category
In Summary
Excellent educational offerings

Markets.com, part of UK-publicly listed and FTSE 250 constituent Playtech PLC, offers traders one of the most trusted, secure, and competitive brokers. It operates four subsidiaries regulated in the UK, Cyprus, Australia, and the British Virgin Islands, with the latter two presenting the best trading conditions. Markets.com serves traders via Marketsx and investors through Marketsi. Besides its proprietary trading platform, Markets.com deploys the MT4 and MT5 trading platforms. Traders also have access to fourteen quality trading tools, consisting of sentiment, technical, and fundamental indicators. They provide clients of Markets.com with a notable competitive advantage.

Unique Features

Regulation

CySEC, FCA, ASIC, FSCA

Minimum Deposit

$100

Another benefit at Markets.com remains its asset selection. Forex traders have a choice of 67 currency pairs and 25 cryptocurrency pairs. Equity traders get access to 2,027 equity CFDs, 60 ETFs, and 40 index CFDs. Completing the selection are 28 commodities, 23 in-house created blends (in-house thematic portfolios), and four bonds. Markets.com also provides Forex traders with one of the best commission-free cost structures starting from 0.6 pips on the EUR/USD currency pair. It translates into $6.00 per lot or $12 per round lot. Equity traders pay a fixed commission of $10 or a currency equivalent per side for a total cost of $20 per trade. Other noteworthy advantages include the personalized financial live-stream service XRay, its Investment Strategy Builder, its outstanding order execution statistics, and its transparency.

 

Markets Pros & Cons

Advantages

  • Very Competitive Forex Fees

  • Very Wide Choice of Assets

  • Choice of Trading Platforms

  • Excellent Customer Support

Disadvantages

  • Commodities and Indices Fees Higher than Forex Fees

Plus500
4.5/5 in this category
In Summary
Wide range of CFDs + trailing stop losses

Plus 500 offers a wide choice of Forex pairs and non-Forex assets as commission-free CFDs. While this broker neither supports automated trading solutions nor social trading, manual traders have a clean user-interface, guaranteed stop-loss orders at an additional cost, alerts on price movements, and a trader sentiment indicator. This FTSE 250 listed broker maintains a safe and secure trading environment and offers a wide range of equity CFDs and an extensive selection of options contracts, allowing more sophisticated trading strategies. Plus 500 takes an opportunistic approach to Bitcoin and cryptocurrencies, offering a choice of 14 crypto pairs for traders.

Unique Features

Regulation

CySEC, FCA, ASIC, FMA, FSB, MAS

Minimum Deposit

$100

Type of Platform

Proprietary platform, Web-based

Traders using smartphones or tablets will feel at home at Plus 500, where a report suggests mobile devices account for over 40% of all executed trades. Plus 500 does not offer in-house research and does not source it from third-parties, while the limited educational content is below average. It does maintain a News and Market Insights section, where it uploads commentary several times per week, but not necessarily daily. Despite its few shortfalls, it remains a highly ranked CFD provider on Google Play and Apple App Store, particularly with millennial traders.

 

Plus500 Pros & Cons

Advantages

  • Well-regulated globally

  • Broad asset selection in equities and options

  • Guaranteed stop-loss order

Disadvantages

  • Low leverage for retail traders

  • Sub-standard trading platform without support for automated or social trading

  • No research and limited, below-average educational content

  • Lack of trading tools

Top ESMA Regulated Brokers

FXTM Best all-around: high floating leverage + fast execution.
FP Markets ECN trading with leverage up to 1:500.
AvaTrade Highly regulated, choice of fixed or floating spreads.
Markets.com Excellent educational offerings.
Plus500 Wide range of CFDs + trailing stop losses.

Forex Brokerages Working Under ESMA Regulations

Forex/CFD brokerages operating under ESMA regulations carry two very notable regulatory conditions which are worth understanding. Firstly, the maximum leverage which can be offered to clients trading Forex currency pairs is thirty to one. This means that the largest trade you can open is your total account size multiplied by thirty. Some traders will not like the idea of being limited to a maximum leverage of thirty to one, but it is worth considering how much money you could become liable for at a much higher level of leverage in the event of a sudden huge price movement.

Closely connected to this is a further restriction which prevents any retail client from being liable under any circumstances for an amount beyond the funds which are already sitting in the brokerage account. This “negative balance protection” is a welcome one, as in the past when there have been huge sudden price movements which slip right through brokerage stops, such as the huge Swiss Franc move in January 2015, clients could suddenly find themselves legally liable for large sums far exceeding their deposit. The sudden volatility triggered by that event and effective freezing of the entire global market in Swiss Francs for about an hour resulted in traders leveraged by more than 1:3 seeing instant losses exceeding their account equity with no ability to immediately exit the trade. This is now a danger which belongs to the past if you trade with an ESMA regulated Forex/CFD brokerage. However, it is also true that many brokers who are not regulated by ESMA offer negative balance protection as it has come to be seen as a fair practice.

Now that you have considered ESMA-related issues, you can consider what the broker has to offer. Is the cost of trading there competitive or not? Check spreads, commissions, and other incidental fees. Remember that some brokers can offer very competitive fees on certain asset classes, such as Forex, while the cost of trading commodities might be high, for example, so check the fees section in the reviews carefully depending upon what instruments you intend to be trading the most. Traders who are planning to keep trades open over the New York rollover at the end of the trading day there should also consider the overnight swaps typically offered. Unfortunately, some brokers abuse this typically “hidden” fee.

Finally, examine the “nice to have” elements, such as the range of tradable instruments, quality of customer support, and trading platforms. Going through the process in this order should ensure you end up opening an account with the best ESMA regulated Forex broker for you.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.

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