UK Regulated Forex Brokers
UK regulated Forex brokers that are registered in the united kingdom are regulated under the FCA ( Financial Conduct Authority).
Forex brokers that are based in the UK have to be authorized by the FCA to run a brokerage for retail Forex trading.
UK Forex brokers are regarded as some of the most reputable Forex brokers. There are many fake website and brokerages that claim to be FCA regulated when in reality they are not. Stay clear of these so called brokerages and report them to the FCA directly.
Updated for 2021.
Here are some key points on UK regulated Forex brokers that are FCA regulated:
- Brokers keep their client funds in segregated accounts
- Negative balance protection.
- Have at least £1 million in operating capital
- Directs all brokers to submit yearly audit reports and periodic financial statements
- Retail Forex brokers are required to protect their clients under the FSCS (Financial Services Compensation Scheme)
- Protection for traders against “broker issues” by providing a guarantee of up to £85,000 in compensation through the FSCS ( Financial Services Compensation Scheme)
- A risk disclosure
- Maximum Forex Leverage cap
- Stringent management structures
- Proper reporting and auditing to clients and the the FCA
For more in-depth information on regulations visit https://www.fca.org.uk/
FCA rules on leverage and more
ESMA affects regulator within the EU (European Union) Including the FCA.
- Leverage limit on CFD and Forex trading to 1:30 for major FX pairs.
- Plus even less on non-majors, commodities, indices, share CFD and cryptocurrencies. The new rules also ban Binary Options outright, imposing new ruling on margin closing and mandatory negative balance protection for clients.
- A ban on all trading bonuses or incentives, such as deposit bonuses. They will also require standardized risk warnings be delivered to clients.
- Close out a clients position if their balance falls to 50% of the margin needed to maintain the position.
- Traders cannot lose more than there account balance. (negative balance protection)
- Risk warnings and disclosures in plain site.
With all this said, all these changes are put in place to benefit the traders and putting less risk in their hands.
*More on ESMA down below
UK Forex Brokers List
Forex Rank has compiled a list of the most reputable and trust worthy UK Forex brokers.
All have been verified to be regulated in the United Kingdom and in good standing under the FCA.
|Broker Type||Market Marker – non dealing desk|
|Regulations||IIROC, CIPF, FCA, ASIC, FSA|
|Account Base Currency||USD CAD EUR JPY GBP|
|Max Leverage||400:1, EU Clients 1:30|
|Trading Platforms||Metatrader 4, Web trader, Trading Station, NinjaTrader|
|Broker Type||Market Maker|
|Regulations||NFA, CFTC, RFED, FCA|
|Account Base Currency||USD CAD GBP|
|Trading Platforms||FOREXTrader, Metatrader 4|
|Broker Type||Market Maker|
|Regulations||IIROC, CIPF, NFA, FCA, CFTC, ASIC, MAS|
|Account Base Currency||AUD CAD EUR GBP HKD JYP SGD CHF USD|
|Trading Platforms||Web trading, Metatrader 4, Oanda desktop trading platform|
|Broker Type||Market Maker|
|Regulations||IFSC, CySec, ASIC, FCA|
|Account Base Currency||USD, EUR, GBP, JPY, CHF, AUD, RUB, PLN, HUF, SGD, ZAR|
|Max Leverage||888:1. *Leverage depends on the entity of the group and the financial instrument traded.|
|Trading Platforms||Metatrader 4/5, Webtrader|
|Broker Type||Market Maker|
|Regulations||FCA, CySec, CIMA, DIFC|
|Account Base Currency||USD, EUR, GBP, RUB, AED|
|Max Leverage||1:500, EU Clients 1:30|
|Trading Platforms||Metatrader 4/5|
|Broker Type||Market maker|
|Regulations||IIROC, CIPF, FCA, ASIC|
|Account Base Currency||USD CAD AUD EUR GBP|
|Trading Platforms||CMC Markets Platform, Mobile trading|
** Leverage applies to all the EU regulated entities of the group. Leverage depends on the financial instrument traded.
UK Forex Trading Brokers – Trading in The UK
The huge liquidity in the forex market and loose regulations in many countries have encouraged many scammers to enter the forex market.
If you want to become a professional trader, you should spend your time in finding the right forex broker.
Always choose a licensed and regulated forex broker to ensure the security of your invested funds, Why not trade a UK regulated broker?
The European trading sessions are highly volatile and this encourages the huge trading volume.
Financial dealers all over the world prefer the UK as their destination because of the advantages of the European economy.
To trade in the UK, all forex brokers must be authorized and approved by the Financial Conduct Authority.
The regulator is an autonomous regulatory body that oversees all non-banking financial transactions.
Until 2012, Financial Services Authority was responsible for regulatory activities.
However, in 2013, the UK government decided to form the FCA to regulate all types of non-banking financial institutions.
Even though UK’s economy is volatile after Brexit, UK forex brokers are free to provide forex services to all of Europe.
FCA Regulatory Guidelines – The Financial Conduct Authority
Forex brokers can trade in the European and UK markets only with a valid FCA license.
Potential investors and traders can use the FCA code to ensure the authenticity of the broker.
Financial Conduct Authority also has authority over EU brokers.
Every licensed and registered broker must submit for regular auditing and provide details of all financial transactions.
All the regulated brokers should use segregated bank accounts to hold the funds of clients.
This ensures that the brokers can’t use the customer funds for operations.
Only financially stable agencies are allowed to provide forex trading services to UK citizens.
One of the notable benefits of FCA regulated brokers is protection through Financial Services Compensation Scheme (FSCS).
If the UK regulated Forex brokers registered with FCA files for bankruptcy or go through premature liquidation, the FSCS insurance scheme provides insured protection for a maximum of £85,000.
Under this scheme, the registered agencies must keep a percentage of their profits in a pool to compensate the clients.
Traders can enjoy maximum protection with this scheme.
The Financial Conduct Authority regulations provide flexibility to brokers as well.
In the US, the forex brokers must adhere to extreme guidelines that stop them from providing certain trading services.
UK forex brokers are free to provide hedging option for traders. There is no limit on the maximum leverage that a broker can offer.
This is beneficial for traders because they can choose a forex broker with a higher leverage.
You should understand that a higher leverage means a higher risk.
Before choosing a UK forex broker, you should check with the Financial Conduct Authority (FCA) website to ensure that the broker is authorized.
Regulated and licensed brokers will always show their license number on the website.
To protect traders against financial frauds, FCA enforces regulations and also monitors compliance.
Or you can check out our Forex Broker List page.
WAIT There's More..
Leverage Rules For FCA Regulated Brokers.
- 1:30 for major currency pairs;
- 1:20 for non-major currency pairs, gold and major indices;
- 1:10 for commodities other than gold and non-major equity indices
- 1:5 for individual equities and other reference values;
- 1:2 for cryptocurrencies
What happens if a regulated UK broker becomes insolvent?
If an UK regulated forex broker files for bankruptcy, FCA ensures that traders are compensated via the Financial Services Compensation Scheme (FSCS).
The (FSCS) makes it possible for the trader to get maximum compensation of £85,000 when their broker goes bankrupt.
This means if a broker is insolvent, traders would be entitled to get compensation of up to £85,000.
How secure are my funds when trading with a UK based forex broker?
With the regulatory role played by the FCA, your funds are safe when you trade with a regulated broker.
They mandates all forex brokers in the UK to always have at least £1 million operating capital.
This helps to make payment to customers done real-time and also ensure that the traders’ funds are kept secure if the company happens to go insolvent.
The mandate of brokers keeping segregated forex accounts with that of their traders also ensures the safety of funds you invest with an UK forex broker.
The trading restrictions imposed on UK based Forex brokers
Contrary to what is obtained with the forex brokers in the US, brokers in the UK don’t impose forex trading restrictions on traders.
Traders are free to trade with any trading technique of choices like hedging and leverage.
They additionally provide a greater diversity of trading and spread betting and binary options are considered legal in the UK.
Given the fact that spread betting is not taxable in the UK, many people find it as an attractive substitute to Forex trading.
The payment options that UK based forex brokers’ offer
UK Forex brokers support varieties of payment options.
Traders have options like credit card payments (Visa, MasterCard, Diners Club International, Union Pay etc), online payment processors like (Paypal, Neteller, Skrill, QIWI, Perfect Money etc), payments through bank check and bank wires.
Bank wire transfers are commonly processed within 24 hours of your withdrawal request.
Nevertheless, the funds are credited into the trader’s bank account only after two to five days.
The Financial Conduct Authority and Forex Trader Protection
The Financial Conduct Authority is the UK regulatory body.
It serves as the consumer watchdog organization and gets its funding from all the regulated financial services companies which include forex brokers.
The regulators duty is to license and regulate UK financial institutions.
It works together with the Bank of England (BOE) and the Prudential Regulatory Authority (PRA).
The FCA is associated with the MiFID derivative and the EEA requirements in respect to the rules and regulations that govern Forex trading.
The regulatory framework offered by the FCA ensures that the Forex brokers function in the interests of traders, and to provide a vigorous trading environment.
Preventing financial malpractice is the central goal of the role played by the FCA.
They frowns upon and squarely deals with scams, fraud, and malfeasance, promotion of the advantages of Forex trading or related activities.
Brokers regulated within UK work hard to protect traders from unscrupulous Forex brokers.
It is thus unlikely that you will be scammed when you trade with an FCA regulated forex broker given the 1 million pounds minimum account balance and segregated account requirements among other regulations that brokers must comply with.
How the UK regulated brokers helps to minimize the traders’ risk?
The Financial Conduct Authority is a regulator that safeguards the interest of traders.
They limit the leverage that is offered by brokers and in so doing, the FCA control the amount of risk the traders are exposed to.
The financial regulator as well does its utmost to handle financial abuse and misconduct in the Forex trading.
All FCA regulated brokers must comply with the strict regulations in the UK.
If any customer is financially abused or defrauded, the FCA conducts an inquiry and carries out investigation accordingly.
If companies act in an irresponsible and reckless manner, they then can revoke its license and inflict severe punishment against the company.
With the requirement of the maintenance of segregated accounts, client money is held separate from the broker’s money.
This is an essential precaution when traders make claims against the company or when for any reason the company is liquidated, goes bankrupt or is defrauded.
Also, the maximum leverage of (1:30), helps to minimize traders’ loss from a high of 1:500 leverage as it was set earlier.
High leverage boosts traders’ loss when trades go against the trader. The FCA effort is to prevent such occurrences.
FCA Forex Regulation PROS.
- Regulated Forex brokers in the UK gives traders peace of mind that their funds are in safe hands.
- Traders who open an account with UK regulated Forex brokers are assured of their funds’ separation from that of the brokerage company account, the maximum leverage trading condition imposed by FCA limits traders loss while at the same time ensuring their safety all the time.
- Additionally, in the event of any complaint, the trader has dispute resolution procedure available to him or her. These are a few rules that are set up by the FCA to keep traders funds safe and ensure a healthy trading environment.
About This Article
Author: Mark Prosz
Sources of information and credits for this post include: