Regulated forex brokers in the UK can be beneficial for a variety of reasons. Not only have many of the top forex brokers been in the business for a very long time, but the majority are also regulated by the prestigious Financial Conduct Authority (FCA), one of the world’s most reputable regulators.
This instills a great deal of trust and professional experience. In this article, we are going to show you the best forex brokers that are UK regulated.
However, before we start it should be mentioned that not all UK regulated forex brokers deliver the same top-notch service. In fact, some go the extra mile offering unbeatable customer service, access to a wide range of markets, and user-friendly technology.
Don’t just give in to the first forex brokers that are UK regulated, because there are plenty to choose from.
Additionally, it should be mentioned that not all FCA UK regulated forex brokers are based there. A number are based offshore but have plenty of business there and/or want to be recognized by organizations like the FCA.
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Is Forex Trading legal in the UK?
The simple answer to this question is a resounding yes. All forex trading is legal in the UK under the FCA (Financial Conduct Authority) regulations. They are an independent body, established in 2012 to oversee the financial sector and compliance in the UK. They have quickly grown into one of the most reputed regulatory bodies in the world providing the very best protection for you as a forex trader.
How to trade forex in the UK
Trading forex in the UK is in fact not much different from getting started as a forex trader in many other parts of the world.
Typically, all top forex brokers will required the following from you in order to get started:
- Proof of ID – Passport is usually best for this one.
- Proof of Residence – A bank statement of utility bill dated within 3 months is usually fine for this purpose.
Once you have provided these documents to your UK broker, your account will typically be verified very quickly and often through automated systems. If there is any discrepancy then it may take the broker an additional day or two to complete the process, but then you will be ready to trade.
Top 10 Forex Brokers UK Listing for 2021
Here’s our list of the best British forex brokers.
British trader? Here’s what to look for in a forex broker
There are a few important key points to note if you are a British trader and choosing an FCA regulated broker regarding what is permitted and not in terms of the regulation. The FCA are well-known as one of the more stringent in terms of the rules they apply, though this is ultimately for your benefit and protection.
The first thing to keep in mind is related to leverage. Under FCA regulation like CySEC and ESMA brokers, this is capped at 30:1 for no professional traders. As a professional you can access as much as 400:1 leverage if you meet the criteria to qualify as a professional trader.
Unlike some other regulators though, the FCA do permit spread betting, so if this is something that interests you, then an FCA regulated broker could be the right choice. They do also ensure negative balance protection is offered to all traders and that all funds are held in segregated accounts. A further protective measure comes from the ICF (Investor Compensation Fund). They will cover up to £85,000 in losses due to bankruptcy or insolvency of your broker.
With those points in mind, here are three key things you should be mindful of when choosing a broker:
1. Look for UK regulated forex brokers
Regulation is vital. When choosing a UK forex broker, you should really be looking no further than choosing an FCA regulated broker as your first choice, since they are the most respected regulatory body in the region who will offer you the most protection as a trader.
2. Minimum trade size is important
When trading forex you should always have a look at the minimum trade size associated with your broker. In many cases, with a leverage of 30:1, you would need a minimum of £33 in order to open a position trading on a micro lot. In that case, you should aim to deposit more in order to have the best trading experience.
With that said, there are usually brokers who offer trading with a deposit as low as £10. So, take into account your intended deposit and find a broker that matches this need.
3. Are you into Betting and Trading? Try Spread Betting
Remembering that spread betting is legal in the UK and Ireland, if you are interested in trying this, then you should choose a broker that makes it available with a user-friendly trading platform. It is tax-free but known as being quite a risky trading strategy. If it interests you though, you should certainly check our listing of the best spread betting forex brokers to choose one.
How to verify if a forex broker is regulated in the UK
Of course, when you choose a regulated broker, you should take a moment to verify that regulation for yourself. This can be easily done for most UK forex brokers through visiting the FCA official website. Once you are there you can look for the FCA register and look for the company name of the broker (which often differs from the broker’s name). This company name can usually be found at the bottom of your broker homepage.
Is forex trading taxable in the UK?
Yes, forex trading is taxable in the UK. With that said, there are a number of categories. If your earnings fall below £12,500 then you will not have to pay any taxes. From there though, a capital gains tax of 10% on amounts up to £50,000, and 20% on amounts over £50,000 applies.
We are not professional tax advisors, thus we strongly suggest you contacting local authorities if you don’t know how to manage this aspect