Is eToro Regulated? eToro Regulation | eToro Review

Is eToro Regulated? eToro Licensing and Regulation

eToro was founded in 2006 by two brothers, Yoni and Ronen Assia and partner David Ring in Tel Avis, Israel. They launched the brokerage with the vision of creating a popular financial investment and trading platform that works for everyone. Since its launch nearly 12 years ago, eToro has grown significantly and is currently ranked as one of the top online forex brokers and also the top social trading networks. As far as regulation and oversight is concerned, eToro (Europe) Ltd. is a registered CIF or Cypriot Investment firm and is based in Limassol, Cyprus. The company’s registration number is HE200585. CySEC or the Cyprus Securities and Exchange Commission is responsible for regulating eToro and it does so under the license number 109/10.

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eToro also has its offices in London, United Kingdom and is a registered UK firm with the registration number 7973792. The Financial Conduct Authority or FCA is responsible for authorizing and regulating eToro UK under the firm’s reference number 583263. Both eToro (Europe) Ltd. and eToro (UK) Ltd. operate under and comply with the Markets in Financial Instruments Directive or MiiFID. Currently, the platform has more than 6 million users spread over in 170 countries around the world and this has allowed it to cinch the position of industry leader.

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There is no denying that eToro has gained a lot of recognition for being a key player in the cryptocurrency industry, but this is not all the platform has done. For more than a decade, eToro has headed the fintech revolution and has built up its reputation of being the leading social trading platform all over the globe. It may have started as a general trading platform, but has expanded considerably since then as it has added cryptocurrencies and other trading instruments for keeping up with the growing demands and changing markets. The three entrepreneurs behind eToro didn’t just want to make trading accessible; they were also interested in reducing the dependency on banks and other financial institutions.

The trading platform called WebTrader was launched by eToro in 2009 that offers a wide range of professional tools to traders of different skill levels. The brokerage took a huge step forward in 2011 with the introduction of OpenBook. This was the first social trading platform in the world and came with the then-new feature of CopyTrader. Through this trader, successful traders can be copied by pretty much ayone. eToro added stocks to the other offerings on its platforms like commodities and currencies, in 2012. A mobile app was also launched by eToro in 2013 for both Android and iOS devices, which also helped in expanding the platform’s reach.

This is also when eToro made its move towards cryptocurrencies and made it possible for traders to trade Bitcoins through CFDs.

The platform also made updates to its interface in 2015 in order to provide traders with a more innovative and intuitive experience. Another feature called CopyFunds was also added by eToro in 2016, which refers to managed portfolios that combine multiple assets or top traders in a market strategy. These are usually driven by machine-learning engines for maximizing returns. It wasn’t until January last year that eToro finally expanded its reach directly into the cryptocurrency market and it became possible for traders to trade a wide range of popular cryptocurrencies, such as Litecoin, Ethereum and XRP.

Trading Instruments

As far as the types of instruments that are available for trading on eToro, there is a host of options that investors can find when they opt for this particular platform to meet their trading needs. You will find a wide selection of indices, international stocks, currency pairs (forex), commodities, precious metals as well as Exchange Traded Funds (ETFs). As aforementioned, the pioneer cryptocurrency, Bitcoin, was introduced by eToro as early as 2014. However, as compared to the other brokers in the industry where it can be purchased or sold as a currency, eToro only allows traders to trade it as a CFD derivative.

Put simply, it means that traders who are using the social trading platform of eToro will buy and sell the cryptocurrency as a financial security that tracks the Bitcoin price in the open market.

The other cryptocurrencies that have been introduced on eToro include Litecoin, Ethereum Classic, Dash, Bitcoin Cash, Ripple and Ethereum.

Unique Features

The all-inclusive trading platform as well as the excellent educational platform of eToro are not the only features that have allowed it to gain the popularity it holds today. The most striking feature that eToro has to offer to its traders is its online financial trading community, which is amongst the largest in the world. Recently, eToro also made some replacements, which include its two popular OpenBook and WebTrader trading platforms. In place of these two, eToro chose to introduce a new all-in-one platform, which is designed to provide traders access to all its services across a wide range of devices.

Depending on the country and the region where the trader resides, there is a minimum first time deposit applicable when they sign up on eToro for an account and it ranges from $200 to $1,000. Not only does eToro provides traders with the option of opening a funded account, it also gives them access to a practice or demo account that can be used for signing up without incurring any cost. This practice account can prove to be immensely useful, especially for new traders, because it gives potential traders the opportunity of testing the trading platform without putting them under any financial obligation. They are provided with an initial deposit worth $100,000 in the form of virtual currency.

Apart from the feature of practice account and the standard funded account, there is also an Islamic account offered by eToro that carries a minimum deposit requirement of $1,000. Similar to a large number of other online forex brokers, no commission is applicable on traders when you are using eToro. Instead, the company chooses to earn by quoting a slightly wider dealer spread to their customers as this can serve as compensation. As far as the real time dealing spreads are concerned, they begin at 2 pips for the USD/JPY pair and three pips for USD/CHF, EUR/USD and USD/CAD.

In the case of currency pairs such as AUD/USD and GBP/USD, you will see spreads of four pips whereas the spread for NZD/USD was about five pips wide. A spread of seven pips wide was available with USD/RUB pairs. Moving onto the dealing spreads in the case of other currency pairs that are not traded as popularly, they went as wide as 20 pips. As far as Bitcoin trades are concerned, the spreads are apparently 225 pips. From April 29th, 2018, eToro introduced real stocks on its trading platform and moved on from trading them as CFDs just like it did in the case of Bitcoin.

This means that now all countries will be real stocks and CFDs will only remain for some countries, which include Macedonia, New Zealand, Nigeria, Afghanistan, Australia, Leone, Sierra, Myanamar, Congo Republic, Nauru, Belarus, Liberia, Zimbabwe and Iraq. From 1st, August, 2018, eToro also became fully complaint with the new rules by ESMA.

Trading Platform

When eToro was introduced, their original trading platform had been primarily designed for inexperienced and new traders and included graphic animations for depicting currencies participating in a tug of water or racing against each other. Since then, the previous platforms of the broker have been consolidated into an award-winning and all-in-one eToro platform. You can also find it on both Android and iOS smartphones and it integrates all the features that were offered previously. Currently, the eToro app can be downloaded through Google Play or App Store. Some new features have also been introduced by eToro such as CopyPortfolio.

Deposits and Withdrawals

As trading on eToro can only be done in the form of US dollars, it means that whatever currency you use for depositing funds will be converted into USD upon receipt. As mentioned before, the minimum amount that you need to deposit in order to start trading through the eToro account is between the range of $200 and $1,000. The amount is actually subject to the regional regulations of a customer’s account. For instant, the minimum deposits on Neteller range from $200 to $1,000 and can go as high as $10,000. In the case of GiroPay and Webmoney, there is a requirement of $200 to $1,000 minimum and a $30,000 and $50,000 maximum deposit, respectively. There is a maximum deposit of $5,000 that can be made on Yandex, based in Russia.

For the convenience of their clients, eToro gives its clients the option of funding their account and making deposits through Visa, MasterCard, bank wire transfer, Diner’s Club debit and credit cards, Skrill Limited UK, PayPal, Webmoney UK, Wirecard, Neteller, Wirecard i.e. Wire and Credit Card, Yandex and China Union Pay. In the case of withdrawals, the trader has to fill out a withdrawal form in the website’s Cashier’s section and under the ‘Withdrawal’ tab. You have to enter the amount on the form and you will then be informed about the withdrawal process via email. Typically, funds can be withdrawn through PayPal, credit card or bank transfer.

When withdrawals are being made for the first time, it is essential for a trader to provide a clear copy of their Passport, which includes their written signature. They also need to submit a clear copy of their utility bill, which should not be older than three months and should have been sent to your address of residence. Moreover, if the initial deposit for funding the account was made via credit card, traders are also required to submit a clear copy of both sides of the credit card as well. A fee of $25 is charged by eToro for every withdrawal. It can take up to five days for the withdrawals to be processed and their might be further delays if you are using third party withdrawal methods.

Customer Support

In regard to customer support, you can get assistance from eToro 24/5 via telephone and email, from Monday to Friday. The response time in the case of email is about 48 hours. A live chat function has not been introduced by eToro as yet, but the feature of a personalized digital service called ‘Nano Rep’ has been provided. In order to access this feature, all you have to do is click on the button that can be found on the bottom left corner of the customer service page at eToro.

There is also a ‘Customer Service Wall’ that can be found on eToro, where traders can use a forum type format for getting in touch with the platform’s customer service. Most of the queries regarding customer service are handled by referring traders to Online Guides that can be found in eToro’s Knowledge base. In the situation where a client wants to talk to a representative, a ticket is opened up and the customer is contacted by a representative as quickly as possible.

Customers have the option of choosing their representative by clicking on their photograph, which is accompanied by a brief bio on the customer service team page at eToro. As of now, customer service can be available at eToro in several languages including Spanish, German, English, Italian and French.

Conclusion

eToro is a prominent online broker and is at the forefront of social investing, which has garnered it a lot of popularity amongst traders and investors. With their newly integrated eToro social investment and trading platform, and also their mobile app, the brokerage is able to provide traders with great opportunities in this exciting and unique new field. Furthermore, there is also a Trading Academy, a Trading eCourse, a blog and live webinars that can come in handy for educating new and novice traders.

It is easy to use eToro’s proprietary online and social investment platform and there is a free practice account available, which is a huge plus. The successful clients on eToro are also rewarded in the form of a great following and cash prizes when they enter competitions.

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