FCA Regulated Forex Brokers

Richard Montana | November 10, 2022

The FCA is one of the most well-respected regulators in the forex brokerage industry. They set the standards which FCA regulated forex brokers most abide to which can give traders confidence that are using a company who has clients best interests in mind. Without any regulation, you may not have anywhere to turn if something was to go wrong. This is one of the main reasons that traders look for an FCA forex broker when they start trading.

What is the FCA?

For the purposes set forth in the Financial Service and Markets Act of 2000, the Financial Conduct Authority (FCA) serves as an independent governmental authority responsible for regulating the activities of both retail and wholesale financial services organisations in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.

What does the FCA do?

The FCA aims to protect consumers by making sure that FCA-authorised companies treat their customers fairly, provide them with appropriate products or services and value their customer’s safety above their own profit or income. By improving market integrity and encouraging competition, the FCA attempts to make the financial markets more efficient, which can benefit both traders and investors alike.

Any business carrying out a regulated activity in the UK must be authorised by the FCA, unless they are otherwise exempt. Well-prepared applications for FCA authorisation can complete in as little as 6 months, although incomplete applications can take much longer.

What is the difference between the FCA and FSCS?

The FCA regulates the behaviour of financial services firms and protects consumers. It aims to make sure financial markets work well so that consumers get a fair deal. When something goes wrong, that is where the FSCA comes into play.

The Financial Services Compensation Scheme (FSCS) protects consumers when authorised financial services firms fail. If the firm you’ve been dealing with has failed and can’t pay claims against it, the FSCS can step in to pay compensation. FSCS offers a completely free service to consumers and it’s funded by the financial services industry.

How do I check if a forex broker is regulated by FCA?

On the brokers website you should find a license number which is usually located near the footer. You can lookup this licenses number on the FCA register to confirm if they are authorised by the FCA to carry out regulated financial service activities. It lists all the firms and current or previously approved individuals involved with regulated activities.

What is an FCA regulated forex broker?

If a forex broker is FCA regulated, they would have had to have gone through a rigorous application process. They would have been thoroughly checked initially and need to constantly adapt to ensure that they keep up to date with the latest rules and regulation that the FCA implement. This is a big commitment which is why you will find some of the best forex brokers are FCA regulated.

The company’s market viability will be evaluated via a study of its business strategy, budget, resources, implemented systems, and controls upon application. All of the brokers directors and key employees will be subject to in-depth interviews to ensure that they can meet the requirements and have the necessary experience to run the brokerage in the right manner.

In addition to the transparency and integrity that an FCA regulated broker must show, it is also very expensive for them to get a license in the first place. Whether they are an STP forex broker or market maker forex broker, the costs go into the hundreds of thousands.

This is why you often see offshore forex brokers entering the industry as the licenses are cheaper and rules not as stringent. Whilst they are able to provide certain trading product and services that an FCA regulated broker may not be able to, they certainly cannot offer the same protection to UK traders.

Who are the best FCA regulated forex brokers?

If you are looking for an FCA regulated forex broker then you won’t be short of choice. Once you have determined the broker is regulated by looking up their license on the register, you can further narrow down your search by looking at the other important broker features including what financial instruments they provide, trading fees, platforms, apps, tools, education, funding and support. You can see a selection of our best FCA regulated forex brokers in the table below.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.
IG Review

ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA

$250

1974

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
2.
IC Markets Review

ASIC, CySEC, FSA, SCB

$200

2007

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
3.
Markets.com Review

ASIC, BVIFSC, CySEC, FCA, FSCA

$/£/€100

2008

1:300

79.90% of retail investor accounts lose money when trading CFDs with this provider.
4.
FXTM Review

CySEC, FCA, FSC, FSCA

$10

2011

1:300

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
5.
City Index Review

ASIC, FCA, MAS

$100

1983

1:200

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
6.
Admirals Review

ASIC, CySEC, EFSA, FCA

$1

2001

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
7.
eToro Review

ASIC, CySEC, FCA

$200

2006

1:30

68% of retail investor accounts lose money when trading CFDs with this provider.
8.
Axi Review

ASIC, FCA, SVGFSA

$1

2007

1:500

70% of retail investor accounts lose money when trading CFDs with this provider.
9.
ActivTrades Review

CSSF, FCA, SCB

$500 (SCB), $1000 (CSSF, FCA)

2001

1:400

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
10.
FXGiants Review

ASIC, FCA

$100

2015

1:1000

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Advantages of FCA regulated forex brokers

  • Provide clients with protection
  • Trade with peace of mind
  • Transparent pricing and operations
  • Must comply with strict rules and regulations

Disadvantages of FCA regulated forex brokers

  • Restriction on trading conditions such as limited leverage
  • Cannot provide certain cryptocurrency products
  • Can apply limitations on accounts and trading

Conclusion: should I use an FCA regulated forex broker?

If you are a forex trader located in the UK, then I would certainly be looking to trade with an FCA regulated forex broker. This will give you confidence and protection, so you only need to focus on your trading. You wouldn’t want to spend time worry about if your broker would go bust as this could impact your performance and lead to poor decision making.

Trading with an FCA forex broker does mean there may be some limitations to what you can and can’t do, but you will find that some FCA brokers also have offshore branches where you can also open an account if you wish. Some of the best forex brokers will not just be regulated by the FCA but other top tier regulators such as the ASIC and CySEC.

About the Author

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Richard Montana
Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

Review Methodology

For all of our broker reviews, we research, validate, analyse and compare what we deem to be the most important factors to consider when choosing a broker. This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. You can read more about our review process.


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