Is MultiBank legit? And who are they?

Whether a financial provider like MultiBank is legit a very relevant question one can have. After all you trust MultiBank with your investment money and savings. It is also a very common question, we get this asked a number of times.

One thing worth bearing in mind: all the brokers that you find on BrokerChooser are regulated by at least one top-tier financial authority. So in this basic sense MultiBank is of course legit. Additionally, there are other factors you can take into account when you check the legitimacy of MultiBank, e.g. if MultiBank is listed on any exchange, provide two-step login, disclose transparently its financial result, etc.

Here, we've collected and summarized the common questions on broker legitimacy, enabling you to decide for yourself whether you consider MultiBank legit in your individual circumstances. We also compared MultiBank with two similar brokers.

Disclaimer: 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

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74-89% of retail CFD accounts lose money

When you assess a stock broker it's best to think through the following aspects:

• What authority or authorities regulate the broker? In other words who can you turn to if something goes south?
• Does it offer negative balance protection?
• How much protection do you have?
• For how long MultiBank has been in operation?
• Is it publicly traded itself?
• How transparent is it?
• How much do they protect your account from unauthorized access?
• What auditor audits the brokerage?

As you see there are a number of aspects above. But not all of them were created equal.

We think the most important feature is to be regulated by at least one trustworthy authority. With a CFD and forex broker, it's also a cardinal info whether the broker provides negative balance protection or not.

Comparing regulators

First and foremost, to gather a wider knowledge about one broker's legitimacy, you should check the regulators of it. For this purpose, we sum up below the most important things to know about regulators and how to interpret them for your individual case.

MultiBank is regulated in the following countries and provides the following investor protection:

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The investor protection amount and the regulator might differ based on which entity you belong to.

For the avoidance of doubt, it is

1. By and large your home country (i.e. your residence, not your passport) that will determine under which regulator you'll fall, should there be more than one regulator.
2. In some cases you might choose between regulators, and that being said, we recommend you choosing the higher-tier regulator, e.g. FCA over CySEC.

Don't forget that regulators are not created equal. Investor protection can also vary from authority to authority. There are top-tier regulators whose excellence lies within their features such as the presence of segregated accounts, the range of protection tools or the investor protection amount itself. Check out a few of the top-tier regulators in the table below. Most brokers reviewed by BC fall below one of the following four regulators:

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74-89% of retail CFD accounts lose money

As you could see above, MultiBank is supervised by the CySEC or Cyprus Securities and Exchange Commission. CySEC monitors the Cyprus Stock Exchange, registered brokers and companies, and the transactions taking place on the Stock Exchange.

CySEC also monitors licensed collective investment funds, registered investment service companies, companies that operate mutual funds and investment consultants. CySEC covers €20,000 or 90% of investor's claim (whichever is lower) per person per firm, in case of broker bankruptcy. They also introduced a negative balance protection. At MultiBank a non-Cypriot citizen is treated the same way as a Cypriot resident in case something goes wrong.

There are some brokers that provide additional insurance because they have private insurance (e.g.: eToro through Lloyd's, among the US brokers Charles Schwab and Ally have similar setups), which means that you have an extra legitimacy net above the regulatory. It's worth checking it out when you're choosing your broker.

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The subsequent bullet points are rather supplementary, “nice to have” features. Ticking them definitely adds to the legitimacy of an online broker, but not having them is not necessarily a big red flag.

Banking background

MultiBank doesn't have a banking background, which is not crucial, but would make a better case for their legitimacy. The reason is that even if it's not required by law that a struggling broker must be saved by its parent bank, in most cases you can count on this happening.

Broker listed on stock exchange

MultiBank is not listed on any stock exchange, hence it's harder to get detailed or any kind of direct information about its financial performance.

Why is being listed on the stock market useful? For two reasons:

• Listed companies by and large have stringent reporting requirements
• If something really goes wrong with the broker, you'll be able to tell it from the (rapidly falling) share price of the broker in most cases. In this unlikely scenario, you'll have time to move your funds and securities to another broker.

Annual financial statements on website

MultiBank doesn't publish annual financial statements. These are sort of financial reports, which generally contain information about a brokerage's income, profit and loss, retained earnings and cash flows. Not having these exposed to the public doesn't necessarily mean that a broker is not legit, it's just a factor that we should take into account when choosing where to invest or trade.

Mobile two-step authentication

MultiBank doesn't provide two-step authentication when logging in, which is not so pleasing, since it might be easier for hackers to compromise clients' accounts.

Broker ownership transparency

Ownership structure of MultiBank is public, everyone can check the owners of the company on their website, which adds to their legitimacy scores.

Broker management transparency

MultiBank is transparent about their management structure, which means that anyone can see who is in charge of management issues at the brokerage.

Broker is audited by the Big Four

MultiBank is not audited by one of the so-called Big Four auditors (KPMG, PWC, Deloitte, EY), which is not necessarily an issue, however it would guarantee another layer of legitimacy.

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74-89% of retail CFD accounts lose money

Now that we have gone through the most frequent and - as we think - most important legitimacy aspects of MultiBank, we hope that you feel armed enough with information for your future decision. In case you're still unsure, use our broker finder and meet the best online broker that suits your needs.

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