CFD and forex brokerage
Brokering contracts for difference (CFDs) and rolling spot forex needs an investment firm licence under MiFID II, for Annex I Section C(4) and C(9) instruments, and typically combines dealing on own account with order execution. Mandatory leverage limits, negative balance protection and standardised risk warnings apply, and the licence passports across the EEA.
Definition
Offering retail and professional clients contracts for difference and rolling spot forex, usually as dealing on own account or order execution.
- MiFID II, Annex I, Section C(4) and C(9) instruments: official text
Which licence you need
Licence families that typically permit this activity:
- IF · Cyprus
Cyprus Investment Firm (CIF) authorisation
CySEC
- IF · Czech Republic
Investment Firm licence
CNB
- IF · Estonia
Authorisation as an investment firm
FI
- IF · Germany
Investment firm licence
BaFin
- IF · Ireland
Investment Firm Authorisation (MiFID II)
CBI
- IF · Italy
Investment firm licence (SIM)
CONSOB
- IF · Latvia
Investment firm licence
LB
- IF · Lithuania
Financial brokerage firm licence
LB
- IF · Luxembourg
Investment firm authorisation
CSSF
- IF · Malta
Investment services licence (Category 1, 2, or 3)
MFSA
- IF · Netherlands
Investment firm licence
Investment firm licence (Vergunning beleggingsonderneming) under Wft Article 2:96 and MiFID IIAFM
- IF · Poland
Brokerage House licence (dom maklerski)
KNF
- IF · Slovakia
Investment firm licence
NBS
- IF · Spain
AV) investment firm licence
CNMV
Where it can be licensed
Frequently asked questions
What retail leverage restrictions apply to CFD brokers in Europe?
European regulators cap leverage tightly for retail CFD traders, with lower limits on the more volatile underlying assets. Brokers must also apply margin close-out rules and guarantee negative balance protection on every retail account.
Can a CFD broker operate a B-book model where it trades against clients?
Yes. A broker licensed for dealing on own account can internalise client flow, running a B-book. It still has to disclose its execution policy, manage conflicts of interest openly and meet the same market conduct and best execution standards as anyone else.
Sources
- MiFID II Annex I, Section C(4) and C(9) instruments · retrieved 2026-09-24
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