IG MarketsVisit IG Markets68% of retail CFD accounts lose money
PepperstoneVisit Pepperstone74-89% of retail investor accounts lose money when trading CFDs
FxProVisit FxPro72.87% of retail investor accounts lose money
XTBVisit XTB79% of retail investor accounts lose money
AdmiralsVisit Admirals76% of retail investor accounts lose money
eToroVisit eToro76% of retail CFD accounts lose money
CMC MarketsVisit CMC Markets78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
FXTMVisit FXTM81% of retail investor accounts lose money
City IndexVisit City Index70% of retail CFD accounts lose money
ActivTradesVisit ActivTrades75.7% of retail CFD accounts lose money
A FCA forex broker refers to a forex (Foreign Exchange) brokerage firm which is regulated and authorized by the UK authority called Financial Conduct Authority (FCA).
The FCA are the financial regulatory body of the UK. Founded in 2012, this independent regulator has fast become one of the most trusted names in the financial regulation field.
They have garnered this reputation for excellence through their positive, protective attitude toward traders and the transparency with which they operate in a top-tier nation and region. If a forex broker wants to provide services in the UK, they must be FCA registered, although certain exceptions where forex brokers are already registered with other very respected bodies such as CySEC, or under ESMA regulation can apply.
In order to create the ranking of the best FCA regulated brokers we took into account several factors including:
- An active FCA license and local offices
- The costs and fees applied
- The ability to create GBP accounts
- The possibility to trade in spread betting
What are the best FCA forex brokers?
Below is our curated list of the best forex brokers regulated by the FCA, with details and information about the regulation, the features, and the characteristics.
How does the FCA work?
Similar to other top financial regulatory bodies, the FCA works to provide the following services within the financial sector:
- Promoting the growth of the UK market
- Financial firms oversight
- Customer protection
All of the above roles are critical to the smooth running of the financial sector in the UK and in gaining the trust of the traders within that sector. As an independent body, the FCA has broad powers of discretion particularly on the brokers that they allow to operate in the United Kingdom. Therefore, they will often work in collaboration with the likes of ESMA in allowing certain brokers to operate within the UK, and vice versa on the understanding that these brokers will be compliant with FCA regulation. This collaboration provides a degree of positive flexibility to forex traders, particularly after Brexit.
What are the characteristics and benefits of FCA?
When it comes to the more exact rules and regulations put in place by the FCA, these can be quite stringent at least in terms of leverage which is limited to a 30:1 maximum as it also is by CySEC for retail customers. This can be increased but only for those considered professional traders. A professional trader, after satisfying certain criteria, can access leverage of up to 400:1.
Unlike some regulatory bodies, CFDs and some other derivative products are deemed legal to trade as are cryptocurrencies. Furthermore, FCA is one of the few regulatory bodies that permit spread betting.
Still traders are kept very well protected with negative balance protection and segregated accounts holding both mandatory. The ICF (Investor Compensation Fund) provided by the FCA also protects investors for amounts up to £85,000 in the case of insolvency or bankruptcy.
What are the prohibitions with FCA?
There are a couple of things that are certainly not allowed when you are trading under FCA regulation from a broker perspective, and this includes enticing traders through any kind of bonus.
All bonus types, including welcome and deposit bonuses, are not permitted. Loyalty or active trading programs that can help reduce your cost of trading though, are allowed.
Differences between FCA regulated and FCA licensed brokers
This difference is something to take note of under FCA regulation. FCA regulated brokers are those that go through the entire FCA registration process for brokers to offer their services within the UK. This can be a long and costly process.
An FCA licensed broker on the other hand is one that has not gone through this process, but is regulated in another area or by another authority and is recognized and approved for trading in the UK under license from the FCA. A perfect example of this is the operation of ESMA regulated forex brokers from the EU that are allowed to operate in the UK.
How to check if a broker is FCA regulated
Double-checking the FCA regulation of your chosen broker could not be easier. Simply, head over to the FCA official website as a first step. When you are there, you can easily search the FCA register using the business name of your broker. This business name sometimes differs from the trading name and can often be found at the bottom of your broker homepage.
How does FCA intervene in case of financial abuse?
The FCA does have and use broad discretionary powers to issue fines and bans to brokers who do not follow the regulations set down by the body. They act particularly in the interest of traders and as recently as March 2020 moved to ban short-selling of stocks in more than 80 companies to protect the economy during the coronavirus pandemic.
How FCA can help you
If you think a broker is not acting in a legal way,or that they have breached FCA regulation in any way, you can contact FCA going on their FCA Official Website to follow up and investigate the matter.
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