FCA- (Financial Conduct Authority) regulated Forex brokers in the U.K. are a natural choice for traders in both the U.K. and in other countries, thanks to its advantageous trader protections and investor-centric focus. See our top rated FCA brokers:
- Eightcap, Competitive pricing + excellent daily videos.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- Plus500, multi-asset and CFD broker.
Best FCA Brokers Comparison
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Regulators | ASIC, CySEC, FCA, SCB | CMA, CySEC, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FCA, FMA, FSCA, MAS |
Year Established | 2009 | 2011 | 2008 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP, Market Maker | Market Maker |
Minimum Deposit | |||
Average Trading Cost EUR/USD | 1.0 pips | 0.1 pips | 1.3 pips |
Average Trading Cost GBP/USD | 1.2 pips | 0.2 pips | 1.7 pips |
Average Trading Cost Gold | $0.12 | $0.18 | $0.34 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, Proprietary platform | Proprietary platform, Web-based |
Islamic Account | |||
Negative Balance Protection | |||
| Visit Website | Visit Website | Get Started Visit Website82% of retail CFD accounts lose money |
Eightcap
In Summary Competitive pricing + excellent daily videosEightcap maintains a UK-based and FCA-regulated subsidiary, Eightcap Group LTD, ensuring it has a presence in the primary global financial center and leading technology hub by venture capital investment. It offers UK-based traders the comfort of a domestically present broker under the stringent regulatory environment of the FCA. Eightcap offers the British Pound as an account base and deposit currency with four payment processors.
Low trading fees, deep liquidity, and tools like Capitalise AI, which provides a code-free environment to automatize trading strategies, add to the competitive advantage at Eightcap. Traders may use MT4 and MT5 or connect via TradingView.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
FXTM
In Summary Best all-around broker with high floating leverage and fast executionWe have made FXTM one of our top-rated brokers because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
Plus500
In Summary multi-asset and CFD brokerPlus500 is a global Forex broker founded in 2008. It maintains an excellent regulatory environment provided by the FCA in the UK, the CySEC in Cyprus, the ASIC in Australia, the FMA in New Zealand, the FSCA in South Africa, the FSA in Seychelles, and the MAS in Singapore. Plus500 offers traders a choice of more than 2,800 assets to trade, including nearly 900 options contracts, in a commission-free trading environment. This extremely wide range of choice can make Plus500 an appropriate choice for traders looking to pursue wide diversification of assets. Plus500 is licensed to offer CFDs through ASIC (AFSL #417727), and through the FMA (FSP #486026), for licensed CFDs in New Zealand. Plus500 trading services are also available in South Africa (Authorised Financial Services Provider #47546).
Pros & Cons
- Broad asset selection in equities and options
- Free and unlimited demo account
- Advanced free-of-charge analytical trading tools
- Global and regulated fintech platform
- Sub-standard trading platform without support for automated or social trading
Introduction to the FCA
The FCA is a relatively new body, having launched its operations in 2013, but its predecessor (the FSA) had been the UK’s main financial regulator for decades. While the Bank of England handles larger-scale policy, the FCA is responsible for monitoring the brokerage sector. Accordingly, Forex and CFD transactions will all fall under this organization’s authority with an FCA-licensed and regulated broker.
Is the FCA a Trusted and Reliable Regulatory Authority?
The UK’s world-renowned financial sector is regulated and therefore designed to ensure a safe, innovative Forex and CFD trading experience is available to traders. This advantageous structure delivers access to insured accounts, complaint mechanisms, strict marketing rules, and some unique protections that are only available to clients of UK-regulated Forex and CFD brokers:
- FSCS (Financial Services Compensation Scheme) - this offers protection covering up to £85,000 in capital deposits per person per broker in the event of broker liquidation. If the broker went insolvent before 1st April 2019, protection is extended to £50,000.
- Tax-free spread betting and other attractive financial instruments are permitted by the FCA.
- With freedom comes responsibility, and the FCA is extremely diligent when it comes to compliance and investigating non-compliant brokerages. Whereas EU regulators often frown on spread-betting, the FCA allows it - provided that the brokerage deals transparently with clients. The tax-free spread betting option only applies residents in the UK and Ireland.
- The FCA is empowered by the UK government to register, monitor, and investigate brokerages that fall under its jurisdiction. The FCA’s willingness to fine and suspend brokers which violate their clients’ best interests helps promote a safe, innovative financial environment where traders can take risks on the market and not on their brokerages.
- The FCA’s track record as a fair and efficient regulator means that the brokers which it regulates are likely to provide excellent service and behave ethically. Should they fail to live up to this standard, the FCA is on hand to assist. FCA brokerages are well-monitored and operate within a system that rewards innovation and punishes dishonesty. With over £200 million in fines typically issued in a given year, this regulator certainly means business. Brokers found to have breached the code of conduct and regulations may also be suspended and have their products banned.
- The FCA has an extensive network of staff and financial monitoring technologies at its disposal. It works closely with the UK financial ombudsman service to resolve disputes.
- As a major financial center, the United Kingdom is home to more than 91 FCA regulated forex and CFD trading firms. This choice of brokers ensures tight, competitive spreads and reasonable brokerage fees.
- The FCA once allowed almost unlimited leverage, but as of mid-2019 leverage was reduced to a maximum of 30:1 on Forex currency pairs. This may disappoint some traders, but it is certainly in line with global best practices. Professionals may access higher leverage if they are able to demonstrate their expertise and experience. Still, opting for that “professional” classification route does diminish certain investor protections.
- With ample investor protections, FSCS insurance, and an investor-centric approach to oversight, the FCA-regulated and authorized forex and CFD brokers present many valuable advantages for traders based both within and outside the U.K.
There are three types of FCA intervention that may be made in order to protect traders:
- Pre-Consumer Stage
If the FCA identifies a dangerous product or service being sold, it may intervene to rectify the situation without receiving any client complaint. It can intervene to amend the development of regulated firms’ products or services.
- Active Consumer Stage
If the FCA failed to prevent a dangerous product or service from being rolled out to the market, it may intervene by demanding that the regulated firm cease offering the product or service and refund or make whole any clients who have transacted it.
- Post-Consumer Stage
If the FCA discovers that an obsolete product or service which is no longer being offered was dangerous and sold in breach of regulatory standards, it may intervene by forcing full refunds to some or all clients affected.
Why Choose an FCA-Regulated Broker
Forex and CFD brokers are not always known for automatically acting in clients’ best interests, especially when many brokers generate profit from client losses. Accordingly, the FCA’s strict regulations and investor protection mechanisms demand above-board dealings between clients and brokers, supporting a better environment for investors to thrive. This includes segregated accounts, differing capitalization requirements depending on execution models, and compensation schemes to ensure a better trader experience.
Financial industry regulations always seek to strike a balance between innovation, risk management, and client protections, and UK’s FCA is no different. The 2008 financial crisis highlighted the dangers of a poorly regulated market, and the years that followed have seen a greater focus on client protection. The UK financial markets have traditionally been leaders in this regard, with the FCA setting the standard for both trading freedom and client protection.
FCA Responsibilities
As outlined above, the FCA has existed in its current form for several years - and for many decades before that as the FSA. The UK government’s decision to split the FCA from its other financial regulatory bodies was taken in the hope that a specialized regulator for financial brokerages would deliver a better-regulated market.
So far, the FCA is widely seen as having lived up to this expectation and in fact exceeded it in some areas.
The FCA carries out several important functions:
- Licensing and registering financial services companies
- Ensuring that brokerages comply with FCA regulations and investigating complaints from clients
- Censuring financial companies that are found to have violated the FCA’s rules and regulations.
- Engaging with the government, banking sector, financial services client organizations to ensure a functional and efficient financial sector.
Investor safety is crucial in any developed financial market, and the FCA oversees one of the world’s biggest. Britain’s strategic location and history of success in trade and finance has allowed it to become one of the top financial destinations on earth.
UK based brokers have working hours in common with Asia, Europe, Australia, Africa, and North and South America. This allows the more than 50,000 FCA registered financial services companies to serve clients across the globe.
FCA brokers are subject to the regulator’s FSCS (Financial Services Compensation Scheme) which guarantees up to £85,000 in coverage for client funds in the event a broker is liquidated. Brokers found to be in violation of the FCA regulations face several forms of repercussions, including warning notices, fines, suspension of trading license, and product bans - depending on the severity of the violation.
Guidelines for FCA-Regulated Brokers
FCA regulated forex brokers must comply with the rules outlined below before they are authorized to sell their services to the public. All brokers are responsible for meeting these requirements and may lose their license if they fail to do so.
The broker must hold the minimum amount of capital as per their FCA license equivalent to £125,000 for straight-through processing (STP) models and £730,000 for market-makers.
The broker must keep client funds separate from its operating expenses at all times.
Reporting - the broker has to report their daily capital balance and submit monthly and quarterly financial documents to the FCA.
The broker must manage their business in line with best practices and demonstrate this to the FCA on request.
The broker must disclose the risk involved with each trading instrument to its clients and always act in the client’s best interest.
The broker must not offer any services that violate FCA regulations, including highly leveraged trades.
If the FCA suspects a brokerage of violating its regulations, it has the legal authority to investigate and impose fines on the broker - or revoke their license altogether.
How Does the FCA Supervise Financial Services Firms?
The FCA applies the Guidelines outlined previously as a supervisory benchmark. It supervises bigger firms using proactive methods and smaller firms using reactive methods. Sectors are also subject to stress test exercises to attempt to identify and disrupt any systematic risks which may exist.
The FCA is featured in the financial news on a regular basis due to the actions it takes against non-compliant brokers and the information it shares with the public for the sake of investor and consumer safety.
A recent example includes a broker added to the FCA’s scam list for “cloning” an FCA-authorized firm. 4fxroyal was caught imitating Royal Forex and copying some of the FCA registration details to defraud customers, landing the scam company in the FCA’s crosshairs. Now listed as a scam firm on the FCA website, prospective traders should always make extra effort to conduct thorough due diligence before registering and capitalizing accounts.
If a client believes that a broker has misled them or is not dealing with them in an ethical manner, they are welcome to report the incident to the FCA. The regulator is efficient and diligent at investigating potential violations by the companies it oversees.
How to Protect Your Capital by Investing Your Money with FCA Forex Brokers
Funds you deposit with an FCA-regulated Forex broker are protected in two ways.
Firstly, it is not easy for any broker to secure FCA authorization. A broker must apply to the FCA, and meet several requirements focused on capitalization of the company and the care it takes to protect clients from the possible effects of any future attempted fraud or bankruptcy. Therefore, any Forex broker which is regulated by the FCA is a relatively safe broker with which to deposit your capital.
Secondly, depositors with any FCA-regulated Forex broker have the integrity of their deposits protected by the FCA under the terms of the Financial Services Compensation Scheme (FSCS).
What is the FSCS?
The Financial Services Compensation Scheme (FSCS) protects every depositor with an FCA-regulated Forex broker, up to a maximum of £85,000 per depositor per broker, in the event of the broker’s insolvency. This means that if you deposit less than this amount with an FCA-regulated Forex broker, you can get the balance of your deposit refunded by the FSCS if the broker goes bankrupt without having to wait for the conclusion of the bankruptcy proceedings. If you have a balance greater than £85,000 at one broker, you are only protected by a maximum of £85,000. One way to ensure better protection if you have a sum greater than that to invest is to make sure you split it between different Forex brokers so you never have a balance greater than that at any one broker. This can ensure you are fully covered.
How Do I Determine the Authenticity of an FCA-Regulated Forex Broker?
It is easy to determine the authenticity of any broker regarding FCA regulation. Firstly, any broker regulated by the FCA will almost certainly advertise this fact on their website, either on a dedicated page entitled regulation or in small print at the bottom of the major or possible all pages on their website. The text should include details of the regulation including a registration number. In order to verify this, you can check it by conducting a search of the FCA’s website, where the details of all FCA-regulated Forex brokers are recorded. If the broker in question is not listed there, they are making a false claim.
Scams Associated with FCA-Regulated Brokers
The FCA ensures a high level of regulation with strong regulatory oversight, and not only claims this, but its claims are widely seen to be true by industry analysts.
It is true that from time to time, brokers are fined for certain violations by regulators, and this can happen among FCA-regulated brokers just as it can happen anywhere else.
As such, it is almost unheard of for a real scam Forex broker to secure FCA regulation.
For example, in 2014, the FCA fined FXCM £4 million for withholding profits which should have been passed on to clients.
If you think Forex brokers have an especially bad reputation, consider the fact that the biggest fine ever issued by the FCA against any regulated firm was levied against Barclays, a publicly traded major global bank, to the tune of £284 million, for failing to control its Forex business.
Bottom Line
Choosing an FCA regulated broker makes a lot of sense for traders who value reliability, transparency and the peace of mind that comes with a well-regulated financial sector.
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