What you need to know about Forex trading in Italy

If you’re considering Forex trading in Italy, it’s worth knowing as much as you can about how the industry works. Understanding the market and all its players, will also mean you’ll have no problems finding great Forex brokers in Italy. We’d like to help with your understanding, by looking at the Forex market in Italy, and help you find the right Italian Forex broker for your needs.

The regulation of Italian Forex brokers falls under the jurisdiction of CONSOB

Wherever you’re participating in Forex trading, there will be a local regulatory body that is responsible for overseeing the market. In Italy, Forex regulation is carried out by CONSOB (Commissione Nazionale per le Societa e la Borsa), otherwise known as the Italian National Commission for Companies and the Stock Exchange. For many years CONSOB has taken the hard line approach regarding investments it sees as very risky. In some ways this explains why it has been so harsh on binary options brokers. As yet, however, Forex brokers in Italy haven’t been targeted. How long it will stay that way we really can’t say. But keep us as one of your favorites, and we’ll keep you updated with any new developments.

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The current state of play for Forex traders in Italy

Italy hasn’t really kept up with some of the other European countries, with regard to Forex trading. Countries with a much bigger presence, such as Germany and UK, have developed way beyond the Forex brokerage business in Italy. Interest in Forex has waned considerably in recent years, and many Italian Forex traders use brokers registered in other European countries.

It’s hardly surprising that this is the way it has gone, and the blame can be put at the door of the Euro. This single EU currency has pushed other currencies into the deepest and darkest recesses of history. Before the Euro, Italy’s own currency the Lira, was a force to be reckoned with. Which meant the conditions were right for Forex market business to take place in Italy. When the Euro was adopted Italian brokers had to compete with other markets in Europe. And the conditions in those markets were much more favorable.

The fact that the Italian economy was in need of a bailout package from the European Central Bank hasn’t helped much either. Trade conditions are better in other EU countries, so Forex brokers have tended to concentrate their efforts there.

We aren’t saying there aren’t any good homegrown Italian Forex brokers. On the contrary, in fact. A number, albeit small, have decided to stay and stick it out. The brokerage companies in Italy are either locally based, or branches of offshore brokerages who have simply decided to set up shop in Italy.

Different types of Forex brokers in Italy

Italy flagWe’ve already mentioned that there are two types of brokers, and now we’ll be looking at them in a little more detail.

Homegrown Forex brokers in Italy
These brokers operate using their own proprietary platforms, or are a customized brand, based on the offering and packages of foreign Forex trading companies. Some of these companies offer products that have been developed for Italian customers, and the products are tailored to benefit traders in the Italian market.

Brokers that are branches of established brands
These brokers will already have been operating in other more developed markets, for example the UK, Cyprus and Germany. These branches have to obtain a license from CONSOB, in order to operate.

What the future holds for Forex in Italy

The jury is still out for Forex in Italy, but there is a glimmer of hope that it will regain its place in the market. Established companies have spotted the underserved market and are keen to cash in. CONSOB will of course be helping, as so far it seems that it’s on the side of Forex trading. CONSOB have succeeded in narrowing the field in relation to investment options, and the Italian public currently has only stocks or Forex they can invest in.

Forex traders in Italy can rest assured that their protection is taken seriously by CONSOB, as it has a strong regulatory influence over brokers offering Forex services in Italy. And this is guaranteed whether the broker is Italian or an offshore company.

And that’s not all the good news for investors looking to trade in foreign currencies in Italy. CONSOB has started the process towards full cooperation with UK and French licensing bodies to identify unregistered Forex brokerage companies. For example, a forex broker doesn’t have to be based in Italy to offer Forex services. Thanks of course to the internet. They may claim to be licensed either in the UK or France, but how can a trader be sure it’s true? After all the logo looks bona fide. The new initiative between these 3 countries means there is nowhere to hide. A trader can quickly and easily confirm, via CONSOB, that the company really does have a license.