The United Kingdom is one of the leading financial markets in the world. It is an influential power in commercial banking, insurance, Forex trading, and other sectors. The Forex trading sector in the United Kingdom is one of the largest globally, uniting firms from Britain and all around the world. The sector is completely legal and well-regulated in the country. The official regulator is the Financial Conduct Authority (FCA), known as one of the most reliable and high authority bodies globally. The regulator is primarily responsible for the global influence of top UK forex trading brokers operating under its jurisdiction.
Besides being a well-regulated market, the United Kingdom and FCA also support a range of international operations. Almost all countries can legally use Brokers licensed by FCA in the United Kingdom. It is one of the most open markets as well, allowing customers to withdraw money in currencies other than the British pound. As a result of comprehensive regulation and high authority, FCA is extremely popular among Brokers all around the world.
Forex Broker List
Due to the notable popularity of FCA regulated brokers, there are quite many of them. Such firms operate in different parts of the world and serve millions of people. The British regulator most certainly impacts the rest of the global Forex industry. However, regardless of how well regulated FCA brokers are, scams still occur among such entities. Even some of the best UK Brokers might end up in the middle of suspicious transactions. Therefore, comprehensive reviews of all brokers regardless of the regulator and its reputation is of utmost importance. This list of reviews has been put together by a team of professionals, ensuring that the information provided is valid, relevant, reliable, and up to date.
AvaTrade
Minimum deposit
100 USD
Licences
ASIC , FSC, FSCA, FSA, FFAJ, FSRA
Maximum leverage
400:1
Platforms
MT4, MT5
HotForex
Minimum deposit
5 USD
Licences
FCA, FSA, DFSA, FSCA
Maximum leverage
1:1000
Platforms
MT5, MT4, WebTrader
Plus500
Minimum deposit
$100
Licences
FCA, ASIC, CySEC, FSCA, FMA, MAS
Maximum leverage
1:30
Platforms
WebTrader
IQ Option
Minimum deposit
$10
Licences
CySEC, FSA
Maximum leverage
1:30
Platforms
Web
FCA in detail – what are UK forex brokers?
The Financial Conduct Authority is a relatively new body for the country with a long and rich history in this industry. The FCA was founded in 2013, but it is not the original authority of Britain. Rather, it was a successor of the Financial Services Authority (FSA) which was established in 2001 while ceasing operations in 2013 after the creation of FCA.
The FCA is the official regulatory body of the United Kingdom but operates autonomously from the British government, ensuring the highest level of independence. The body is structured as a company limited by guarantee, which is a legal description of a type of a corporation in the United Kingdom and some other commonwealth countries like Australia and Ireland. The mentioned structure is one of the prime reasons why FCA listed forex brokers are so successful and high on demand globally.
This structure is primarily used by no-profit organizations and bodies that serve a purpose beyond income. Instead of shareholders and owners, they usually have members of the assembly or those who made decisions on behalf of the authority. The FCA is a similar case as it does not have any shareholders but rather members of the board that make fair and unbiased decisions. The body does not get any funding from the government or private sources. Rather, all of the income generated by the FCA is through fees charged to UK forex brokers and other financial firms served by it.
The original financial regulator of the United Kingdom, FSA, was also independent of the UK government, However, its board members were appointed by the national treasury. This sparked some concerns regarding the true independence of the FSA.
The FSA was abolished during the post-2007-2008 financial crisis period as the government decided to reshape the regulatory framework. The FCA, the successor to the FSA, was created to provide more efficient and comprehensive services to the members of the financial industry. However, the current system of financial regulation in the United Kingdom is not as simple and easy. Many of the old UK forex brokers often come across difficulties in regard to finding a relevant authority. The FCA solved this issue but the Bank of England remains the regulator of large-scale financial policy and institutions.
Nowadays, the FCA is responsible for regulating and monitoring brokerages across the nation. Both the Forex sector and CFD transactions all fall under the responsibility of this authority with an official, FCA-regulated, and licensed broker. Therefore, the FCA offers wide coverage of regulation within the financial sector despite the great influence of the Bank of England and its sub-authorities.
One important factor when talking about the UK regulator in 2020 is Brexit – the withdrawal of the United Kingdom from the European Union. After the 2016 vote, despite the absence of the Brexit deal between British and EU officials, the FCA decided to negotiate with its European counterparts. As a result of talks and open statements, the FCA promises to keep a close and comprehensive relations with the EU regulators and their policies. The United Kingdom is leaving the European Union at the end of 2020. Up until that point, the FCA will work in alignment to the EU rules and regulations. This is extremely important for FCA regulated forex brokers. However, even after the final withdrawal date, the authority plans to keep its policy closely in line with the European Union.
The FCA is a world-known and celebrated regulator and it is not without a reason. Regulators operating in all countries and territories are meant to support and protect those that fall under their jurisdiction. That is what makes some of the regulators like the FCA stand out from the rest. Good protection tools and guarantees attract firms from different parts of the world, benefiting both the regulator and the national economy. The FCA is responsible for brokerage firms in its jurisdiction. The body offers a number of benefits, effective regulations, and guarantees that are quite impressive.
The FCA has the FSCS (Financial Services Compensation Scheme) in place, aimed at minimizing the damages attributed to the liquidation of a brokerage. Such protection measures are rarely offered by regulators. The UK regulated forex brokers should be happy as the nation’s regulator provides absolutely remarkable service in this regard. The FSCA is able to cover up to £85,000 of capital deposits per one individual per broker through the FSCS in case of the broker liquidation. In case the broker went insolvent prior to the April 1st, 2019, the sum of protection is up to £50,000. Regardless of the case, the FSCA offers great protection and guarantees for the broker liquidation threat through its Financial Services Compensation Scheme.
Besides the protection scheme that it offers, the FCA also is a well-backed and monitored authority with a spotless reputation. The FCA approved forex brokers benefit from its name significantly. The body is authorized by the British Government to monitor, regulate, fine and if needed, investigate brokerages that fall under its scope. This already is a major guarantee to be backed by the national government of one of the world’s most powerful and influential nations. Such patronage is crucial in terms of regulators as it boosts confidence in the work done by them. Unfortunately, some regulatory bodies around the world encourage illegal behavior, scams, and are inattentive to violations of rules and guidelines set by them.
In efforts to curb the number of such examples, the FCA is strictly monitoring the process on the UK market, fining all bodies for violations. The authority charges as much as £200 million on average in fines each and every year for violations of rules. The FCA is known for working with a very simple yet beneficial framework that supports and encourages innovation and novelty while fighting against dishonesty and illegal activities. forex brokers in UK are often invited to participate in conferences and meetings to boost innovation while trying to cut illegal activities. Considering the high rate of success in this regard, the system is clearly working. Those who trust this system of the FCA should not worry as the authority is extremely reliable and fair. On the other hand, illegal activities will hardly get through the hands of this body.
The FCA does not hesitate to invest in infrastructure and human resources in an effort to work efficiently and serve its customers. The authority is headquartered in the British capital of London and has the state of the art equipment at its disposal. It owns financial monitoring technologies and is served by experienced, knowledgeable staff from all over the world. The FCA has an intense work relationship with the financial ombudsman service. The latter is a service that helps businesses and customers in resolving disputes and issues regarding finance. It truly comes in handy with the FCA as such disputes are not as rare with brokerages.
Along with many perks the regulator offers, forex trading brokers for British and Irish nationals can benefit from a very special allowance. Tax-free spread betting is one of the prime advantages of the FCA. This controversial practice has been widely criticized and acclaimed for different reasons. Many connect it to illegal activities and high risks of fraud. That is why the majority of the EU regulators do not allow it. However, the truth is that under transparent circumstances and in the hands of a responsible regulator such as the FCA, tax-free spread betting can be highly beneficial for all sides. The services are currently offered for only UK and Ireland resident clients due to restrictions in other countries.
The United Kingdom is one of the leading financial centers in the world. Brokerages are aspiring to be regulated by the FCA amid its benefits and an extremely free environment for business. Due to such circumstances, Britain is now home to 91 forex and CFD trading firms. The number of forex brokers in UK is gradually increasing due to the high demand for authority. This diversity of options ensures fairness, equality, and affordability on the market. The FCA regulated firms come at reasonable brokerage fees while the country is also home to more high-end entities.
Despite the high number of great advantages the FCA offers, there also are some flaws within its system. The leverage is potentially the most significant disadvantage with the authority. It once used to offer almost unlimited leverage but recently, the FCA changed the limited to 30:1 on Forex currency sets. This came as a shock for many of its clients since practically unlimited leverage was one of the biggest benefits of the FCA. However, the current 30:1 rate is completely in line with international standards and should not be a major problem for clients.
The other flaw for which the FCA often gets some criticism is the grey area for spot Forex contracts. The FCA listed forex brokers do not have an opportunity to use his instrument, which has caused some minor problems for a few brokerages. If the spot Forex trade occurs under the brokerage regulated by the FCA, it will practically be considered uncontrolled. However, for most of the FCA’s clients, this has not caused any major issues in the past. Yet, should one prefer spot Forex traders, the FCA regulation is not the right choice.
All in all, the FCA is well-known for being a reliable regulator, delivering quality service to its clients. Its first role in the chain is licensing and registering its clients. later, it effectively monitors and regulates them, ensuring that brokerage firms follow rules and regulations set by the FCA. Should one not be in compliance with those policy frameworks, the FCA has the power to initiate sanctions and even launch an investigation. The authority also is allowed to cease operations of the UK regulated forex brokers for a term of one calendar year. If needed the FCA can suggest that the ban continues indefinitely.
Addressing the elephant in the room: what criteria should brokerage firms meet to be regulated by the FCA? This range of requirements is essential for being registered by the authority. If the brokerage stops meeting the criteria after being registered it will face sanctions posed by the FCA. First off, the minimum amount of capital is what accounts for lots of attention. At least £125,000 for firms using a straight-through processing model and a minimum of £730,00 for market-makers is required to start the process. The client is asked to keep its operational expenses set separately aside from the client funds. Reporting is another crucial part of the criteria list. All brokerage firms are required to report their daily balance while submitting monthly and quarterly comprehensive financial overviews to the FCA. Moreover, all clients are asked to comply with general international and FCA principles.
How to find UK registered brokers
When looking for the FCA regulated brokers, checking their registration and its validity is of utmost importance. Unfortunately, lots of scamming and illegal activities take place within the Forex industry. Such cases are the prime reason why regulators are trusted and essential for safe operations. Many forex brokers in UK use the name of the FCA illegally to promote themselves. Therefore, making sure that the license exists is crucial.
When looking for the broker, one can never trust their website saying that it is regulated by the FCA or any other regulator. Checking them on the list of the FCA-licensed and regulated brokerage firms is crucial to avoid becoming a victim of a scam or a dishonest brokerage. Luckily obtaining this information is far from difficult in the 21st century. The website of the FCA (fca.org.uk) has a ‘regulated broker’ page, which offers not only a list of such entities but also a number of useful legal documents. The authority states that all firms selling financial products in the UK market should be licensed and regulated by it. If some are not but keep operating in Britain, they should immediately be reported to the regulator.
The easiest way of checking the validity of the FCA certificate is through the registration base. The authority has a website that works as the official list of the FCA-regulated brokers. It can be found at register.fca.org.uk. Usually, this website is quite enough to find legit forex companies in UK. However, if there is uncertainty about something or there are more questions regarding the issue, other ways of contacting the FCA also exist.
The FCA has a hotline which is active during working hours. One can check whether the brokerage is regulated by the authority or not through these services efficiently and conveniently. Moreover, the call center operators will answer practically all questions regarding the information on a particular FCA-regulated brokerage or the licensing process. However, should this not be an option, the FCA offers an email service that is highly efficient and very responsive.
Besides the certification itself, checking its validity is also crucial. Some brokerages used to be regulated by the FCA but due to numerous issues, their licenses were ceased. Therefore, such firms are no longer subject to FCA regulation. Such mistakes can lead to significant losses as some brokerages use their old status to look more appealing. Many people have been tricked to trade with UK forex brokers that are no longer regulated by the FCA. Therefore, one should always check whether the license is active or not with the regulator. For this purpose, the hotline is the most reliable way of communication.
Sometimes the broker’s name can not be found on the list of registered firms but they actually hold active licenses. In this case, try contacting the brokerage itself and asking them information about potential different names of the firm or its subsidiaries. Often, brokerages are officially registered under different names, causing confusion over the legitimacy of the license.
How does FCA prevent FX scams in the UK?
As mentioned before, the FCA is a powerful regulator that has lots of tools at its disposal. Using such instruments, the regulator is able to constantly monitor the situation within its jurisdiction. The FCA has the right to fine entities operating under it or even to cease operations of particular bodies. Therefore, once exposed, scammers and entities involved in illegal activities are effectively dealt with.
However, in the process of preventing scams within the Forex industry, exposing and flagging dishonest brokerages is more important. The UK forex brokers list is already long and keeps expanding. To avoid leaving any illegal activities behind, the FCA requires comprehensive monthly and quarterly financial reports from its clients. After reviewing them, some brokerages are subject to further investigations or audits held by the FCA itself. Active monitoring makes scamming almost impossible among firms under the scope of this regulator.
Despite the FCA being highly effective with its clients, there is still a high risk of scammer firms that are left behind the regulator. The authority openly states that any entity selling financial services to the UK citizens should be regulated by it. However, many still remain operating illegally in the British market. To curb such activities, the FCA is leading an active information campaign, trying to track down illegitimate brokerages.
What is the 2nd best option?
The UK forex brokers regulation is one of the best globally. The FCA offers efficient, reliable, and competitive services while having a spotless reputation. Brokerages from all around the world truly aspire to comply with all of its criteria in an attempt to receive the regulator’s license. We have discussed its benefits in detail, ranging from an extremely large protection pool to a transparent process. For this very reason, there are almost no British brokerages that look for other regulators outside of the United Kingdom. However, for those who are unsatisfied with the changed leverage rules or are in an urgent need of the spot Forex trade, still have a handful of great options available.
For decades the United Kingdom had been a part of the European Union, the world’s largest single market economy uniting some of the leading and most developed countries globally. For this reason, relations and legal compliance between the FCA and other EU regulators remain extremely close. Practically any EU regulator operates within a similar framework as the FCA but some rules, protection pools, and the registration criteria still vary. Despite this being a rather rare occurrence, some new UK forex brokers still obtain the overseas regulator licenses due to different, usually rather specific reasons.
For someone looking for an alternative of the FCA, the German regulator BaFin (Federal Financial Supervisory Authority) is the best option. Headquartered in Bonn and Frankfurt, BaFin is an independent regulator, responsible for financial regulation in Germany. In terms of the overall framework, reliability, and transparency, BaFin is one of the closest regulators to the FCA. Should the German regulator not be a perfect fit for you, the CySEC (Cyprus Securities and Exchange Commission) can be a decent solution. The island nation of Cyprus is known for having a reliable regulator in an open market which is home to numerous influential firms. The country is also a member of the European Union which further guarantees the regulator’s reliability while bringing some added benefits to the CySEC’s license.
