Best NFA Brokers 2021

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US-based traders looking for a US Forex broker should always make sure that their broker is a member of the National Futures Association (NFA). This is a legal requirement for US Forex brokers and helps to provide an additional layer of security against potential fraud.

I have intensively researched the tight field of US NFA regulated brokers offering Forex trading to identify the best NFA Forex brokers listed below.

Best NFA brokers 2021

  1. IG Markets – Best account fees.
  2. Forex.com - Best all-round trading conditions.
  3. Nadex – Best Forex options.

1
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Top US Forex broker
Over 17,000 tradeable assets
2
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
NFA regulated broker
In-house research and excellent educational center
3
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The only regulated binary options broker in the US
Short-term trades available from 5 minutes to one week

IG Markets

5.0/5 in this category
In Summary
No withdrawal fee

IG Markets is one of the leading forex brokers in the United States and it is easy to see why. IG Markets has a client base of nearly a quarter of a million people across the globe. Since they entered the United States market in 2019, IG Markets have won several awards such as the FX Weeks e-FX 2019 award for the Best Retail FX Platform of the Year. IG Markets is regulated by two different highly valued regulators in the United States including the NFA (National Futures Association) and the CFTC (Commodity Futures Trading Commission).

One of the most attractive aspects of IG Market’s offering is the very wide range of assets offered for trading.

Pros

  • Broad asset selection for Forex traders

  • Quality choice of trading platforms, including MT4

  • Autochartist signals integrated with the proprietary web-based platform

  • Superb educational tools for beginner traders

Cons

  • Limited deposit and withdrawal methods

  • Higher minimum deposit requirement, but within a reasonable demand

Forex.com

5.0/5 in this category
In Summary
Excellent trading conditions + NFA regulation

Forex.com was founded in 2001 in the United States, making it a truly American Forex broker. Forex.com is publicly listed under StoneX and was officially the biggest MT4 broker in the entire world as of early 2019. In addition to its regulation by the NFA as an NFA broker, and by the CFTC, it also operates internationally and has secured licensing from several top-tier regulators in major financial centers. Forex.com offers traders negative balance protection and a commission-free pricing environment. One of the most attractive features here for US Forex traders is the unusually wide range of Forex currency pairs and crosses on offer.

Pros

  • Lower minimum deposit

  • Islamic account available

  • Good reputation

  • Choice of account types

Cons

  • Withdrawal fee

Nadex

4.5/5 in this category
In Summary
One of the only US Binary exchanges regulated by the CFTC

The Northern American Derivatives Exchange, commonly known as Nadex and formerly named HedgeStreet, was founded in 2004. This Forex provider is in fact a subsidiary of the massive and very popular IG Markets. Nadex offers clients a variety of trading options comprising of commodities, events, indices and of course currencies. This NFA broker is also regulated by the CFTC (US Commodity Futures Trading Commission). With the oversight of the CFTC, traders can feel assured that Nadex is operating above board and that their investments will be protected. All client deposits are held completely separately from company funds to further ensure that Nadex clients’ money is safe.

Pros

  • Offers binary options, call spreads, and knockouts

  • Great reputation

Cons

  • Only 10 Forex pairs available

  • Higher minimum deposit

Does the CFTC maintain a Forex Brokers list? 

The CFTC, founded in 1974, is a trusted US regulator with oversight of the US derivatives markets. They include futures trading, swaps, and select options contracts. All US-based derivative brokers must register with the CFTC. While there is no CFTC Forex brokers list, the CFTC maintains a RED (Registration Deficient) list. It gives an overview of foreign entities operating without CFTC registration but offering products and services the CFTC believes require one.

Traders should avoid Forex brokers on the CFTC RED list. It increases the risks of fraud or scams. Inclusion on the RED list does not mean the entity violated any provision of the Commodity Exchange Act. The CFTC notes Forex as a sector with increased fraud complaints, together with cryptocurrencies, commodities, metals, and binary options.

Before opening a trading account with a broker, it is best to double-check if the broker operates with all the necessary registrations and licenses. The CFTC RED list offers one tool to avoid potentially fraudulent trading environments, but the CFTC also has a link to the NFA BASIC database. It lists the registration of market participants, their financial information, and the disciplinary or regulatory history.

How the NFA Regulates Brokers 

The National Futures Association is not a government regulatory body but a self-regulatory organization (SRO) for derivatives in the US. Despite not being a regulator, membership is mandatory for many market participants and required for all market participants dealing in swaps. Therefore, all US-based Forex brokers should list membership with the NFA on their website. NFA brokers pay membership and assessment fees, which is how the NFA funds operations. It counts more than 4,000 member firms and 55,000 associates, with its headquarters in Chicago, the US hub for commodities and futures trading, with a representative office in New York.

NFA members must adhere to well-communicated standards, and the NFA ensures that US futures markets and the retail Forex market also operate under uniform standards. The aim is ensuring the safety, security, and transparency of the derivatives marketplace across the US for all market participants, from retail to professional.

NFA Forex Regulations 

The most important NFA rules impacting Forex traders using NFA brokers are:

  • Maximum leverage of 50:1 on Forex, lowered to 30:1 for some less liquid currency pairs (exotics).
  • FIFO (first in, first out) rule – if traders have multiple positions open in the same Forex currency pair or cross, the positions can only be closed in the same order as which they were opened.
  • Hedging is prohibited.
  • Regulated brokers must hold a minimum of $20 million to ensure customer protection.

NFA regulated Forex brokers, in theory, ensure fair market practices to all clients, but that does not guarantee the absence of fraud. It does reduce the likeliness of it, but the biggest ones in history occurred under the watch of the NFA, together with the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Despite such occasional shortcomings, US-based traders should always trade with one of the NFA-regulated Forex brokers, as there is significantly more upside in doing so than not.

Pros and Cons of NFA Regulated Brokers 

The main advantages of using an NFA regulated broker are:

  • Access to a regulatory channel to resolve disputes with your broker without needing to resort to litigation.
  • Knowing your broker is highly regulated and well-capitalized, and properly segregating client accounts.
  • Knowing that your broker has a reputation to protect.
  • They may provide US tax-friendly accounting.

The main disadvantages of using an NFA regulated broker are:

  • Cap on Forex leverage at 50:1, although this should be more than enough leverage for anyone’s needs.
  • FIFO rule, but this can be avoided by slightly varying the position sizes.
  • Lack of access to CFDs and certain other assets, although CFD are not efficient vehicles for US persons anyway.

NFA Broker Check 

Traders can locate the existence of NFA membership on the bottom of the homepage of a broker and then conduct an NFA broker check. The NFA allows visitors to check the status of all members via its search tool BASIC. Entering the name of a firm or individual in question will return any available information from the NFA database. It also includes regulatory action from the NFA and CFTC with complete details. The NFA also provides the monthly updates Futures Commission Merchant (FCM) financial data reports, offering information about the required net capital and the adjusted net capital of member firms. The “File a Complaint” button allows traders to report malpractice or fraudulent activity to the NFA, which it then must investigate.

Retail Forex traders in the US have a limited choice of brokers, and it is illegal under US law for non-NFA regulated brokers outside the US (where the trading environment is more competitive) to open accounts for US persons. Note that it is not illegal to be the person opening the account in this case.

Trading with NFA Forex brokers will limit the risk of fraud and notably increase the security of their deposits. Therefore, all US traders should conduct an NFA broker check using BASIC before opening a trading account.

Final Thoughts 

US persons – especially US residents – wishing to trade Forex, face a choice between using an NFA regulated broker, or using an offshore broker outside the US which is not regulated. It is not illegal to use an offshore broker, but very few Forex brokers outside the US will now accept a US person as a client for fear of getting into trouble with US authorities, so traders wishing to go offshore are likely to find they have limited choice and may find problematic issues even with brokers where they are able to open an account. For these reasons, and as US regulations are not as restrictive as they are often claimed to be, it will usually make sense for a US Forex trader to open an account with an NFA regulated broker.

FAQs 

What is NFA in Forex?

NFA stands for the National Futures Association, a non-governmental regulatory organization in the USA. Membership of the NFA is obligatory for any Forex broker within to operate within the USA.

Is Forex.com regulated by NFA?

Forex.com has been a member of the National Futures Association (NFA # 0339826) since 2004.

Is a SEF an NFA member?

SEFs (swap execution facilities) do not have to be NFA members in the USA, but they may contract with the NFA to receive a regulatory service.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.