5 Best Regulated Forex Brokers in 2021

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Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

The Forex market attracts thousands of new traders around the world every day. One of the most critical requirements for a successful trading career is trading with one of the many regulated Forex brokers.

1
AvaTrade
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.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
2
FXTM
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.
Best all around broker
High floating leverage + fast execution
3
FP Markets
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.
ECN-style trading
Daily market research and Autochartist access
4
Plus500
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.
Best platform for new Forex traders
Trailing stop losses
5
Markets.com
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.
Marketsi strategy builder helps traders trade smarter
Competitive trade execution with low slippage

Top Regulated Forex Brokers

AvaTrade Highly regulated, choice of fixed or floating spreads.
FXTM Best all-around: high floating leverage + fast execution.
FP Markets ECN trading with leverage up to 1:500.
Plus500 Wide range of CFDs + trailing stop losses.
Markets.com Excellent educational offerings.

AvaTrade
5.0/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade was founded in 2006 in Dublin, Ireland. They are one of the largest and most famous Forex / CFD brokers in the world and became well-known for offering their clients a choice of fixed or floating spread cost of trading models. They enjoy an extremely high and strong level of regulation, making them a favorite for traders who are extremely nervous about the security of their deposit, which in Ireland can be protected by a strong investor deposit protection provision. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava’s maximum leverage offered runs as high as 400 to 1.

Unique Features

Headquarters

Ireland

Year Founded

2006

Type of Broker

ECN/STP

Minimum Deposit

$100

Maximum Leverage

1:400

Type of Platform

MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based

In addition to their longevity and safe reputation, clients know that through AvaTrade they have access to a broad range of asset classes through which diversification can be achieved successfully: AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. Even better, and unusually, 2 bonds and 6 ETFs are also on the menu. The diversity offered here stands out.

Whether you are located within the European Union or not, all branches of AvaTrade will offer you negative balance protection, above and beyond what is mandated by the law. This means that under no circumstances will any client of AvaTrade ever be held liable by the firm for an amount larger than their deposit.

 

AvaTrade Pros & Cons

Advantages

  • Well-regulated globally, with the Bank of Ireland, the primary regulator

  • Low minimum deposit and in-depth educational tools

  • Wide asset choice across seven sectors

  • Superior mobile trading platform

Disadvantages

  • Low leverage for retail traders

  • High quarterly inactivity fee

  • Unacceptable cost for AvaProtect

FXTM
5.0/5 in this category
In Summary
Best all-around: high floating leverage + fast execution

We have made FXTM our top-rated broker 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.

Unique Features

Headquarters

Cyprus

Regulation

CySEC, FCA, FSC, CMA

Year Founded

2011

Type of Broker

Instant/Market Execution

Minimum Deposit

$10

Maximum Leverage

Flexible

Type of Platform

MetaTrader 4, MetaTrader 5

FXTM, or “ForexTime”, has been around for a long time: they were founded in 2011. Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U.K., Cyprus, Mauritius, and South Africa. The brand is owned by private companies incorporated in the U.K., Cyprus, and Mauritius. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks. Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers.

FXTM offers traders a choice between two of the most popular execution models: customers may open either an ECN-type account, or one that trades by “straight-through processing”. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer.

Through their Mauritius regulator, FXTM offer leverage as high as 1000 to 1. In the U.K. and Cyprus, they are limited by law from offering more than 30 to 1.

If you are looking for a broker with a good copy trading program, it is worth taking a serious look at FXTM’s “FXTM Invest” copy trading program.

FXTM Pros & Cons

Advantages

  • Excellent client deposit protection

  • Low minimum deposit

  • Free MT4 add-ons and VPS hosting

  • Good educational tools

Disadvantages

  • No cryptocurrencies or exotic currencies

  • Low leverage for retail traders

  • Internal withdrawal fees and an inactivity fee

FP Markets
5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500

fpmarkets is an Australian brokerage which launched in 2005. Headquartered in Sydney, Australia’s financial capitol, they have carved out a solid niche for themselves as the best Forex / CFD broker enjoying ASIC regulation. Australian regulators are much more relaxed about leverage than their counterparts in the U.S.A., U.K., and the E.U. and so fpmarkets can offer a maximum leverage as high as 500 to 1.

For most traders, the standout unique selling point of this broker lies in the incredibly wide range of tradable assets offered, providing an opportunity to trade over ten thousand individual stocks and shares. These go beyond the typical U.S.A. and U.K. companies and include a good selection of publicly traded shares on the Hong Kong and Sydney exchanges, as you might expect from an Australasian-facing broker like fpmarkets. Also, over 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin are also on the menu here.

Unique Features

Headquarters

Australia

Regulation

CySEC, ASIC

Year Founded

2005

Type of Broker

No Dealing Desk

Minimum Deposit

$100

Maximum Leverage

1:30

Type of Platform

MetaTrader 4, MetaTrader 5, IRESS

They offer an unusual hybrid ECN/STP execution model which means that their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.

Traders can scalp and hedge at this broker, whose fast ECN execution speed makes it a natural home for scalpers. Clients may choose between the MetaTrader 4 and MetaTrader 5 platforms, and shares can be traded through the IRESS trading platform which includes access to level 2 exchange data.

FP Markets Pros & Cons

Advantages

  • Choice of trading platforms and auxiliary trading tools

  • Very competitive cost structure and excellent asset selection

  • Low minimum deposit requirement and leverage of up to 1:30

  • Well-regulated and trustworthy

Disadvantages

  • Availability of Iress geographically restricted

  • Limited commodities and metals selection

FP Markets is an Australian multi-asset broker with more than $1 billion in daily trading volume, serving clients from 80+ countries. Founded in 2005 in Australia, FP Markets grew into a trusted brand over the past 15+ years with more than 100 employees. The upgraded MT4/MT5 trading platforms, via the Trader Tools consisting of twelve plug-ins, present clients with a competitive edge. We have conducted an in-depth review of this CFD broker to provide traders with a complete overview of the trading environment at FP Markets.

Plus500
4.5/5 in this category
In Summary
Wide range of CFDs + trailing stop losses

Plus 500 offers a wide choice of Forex pairs and non-Forex assets as commission-free CFDs. While this broker neither supports automated trading solutions nor social trading, manual traders have a clean user-interface, guaranteed stop-loss orders at an additional cost, alerts on price movements, and a trader sentiment indicator. This FTSE 250 listed broker maintains a safe and secure trading environment and offers a wide range of equity CFDs and an extensive selection of options contracts, allowing more sophisticated trading strategies. Plus 500 takes an opportunistic approach to Bitcoin and cryptocurrencies, offering a choice of 14 crypto pairs for traders.

Unique Features

Headquarters

Israel

Regulation

CySEC, FCA, ASIC, FMA, FSB, MAS

Year Founded

2008

Type of Broker

Market Maker

Minimum Deposit

$100

Maximum Leverage

1:30

Type of Platform

Proprietary platform, Web-based

Traders using smartphones or tablets will feel at home at Plus 500, where a report suggests mobile devices account for over 40% of all executed trades. Plus 500 does not offer in-house research and does not source it from third-parties, while the limited educational content is below average. It does maintain a News and Market Insights section, where it uploads commentary several times per week, but not necessarily daily. Despite its few shortfalls, it remains a highly ranked CFD provider on Google Play and Apple App Store, particularly with millennial traders.

 

Plus500 Pros & Cons

Advantages

  • Well-regulated globally

  • Broad asset selection in equities and options

  • Guaranteed stop-loss order

Disadvantages

  • Low leverage for retail traders

  • Sub-standard trading platform without support for automated or social trading

  • No research and limited, below-average educational content

  • Lack of trading tools

Markets.com
4.5/5 in this category
In Summary
Excellent educational offerings

Markets.com, part of UK-publicly listed and FTSE 250 constituent Playtech PLC, offers traders one of the most trusted, secure, and competitive brokers. It operates four subsidiaries regulated in the UK, Cyprus, Australia, and the British Virgin Islands, with the latter two presenting the best trading conditions. Markets.com serves traders via Marketsx and investors through Marketsi. Besides its proprietary trading platform, Markets.com deploys the MT4 and MT5 trading platforms. Traders also have access to fourteen quality trading tools, consisting of sentiment, technical, and fundamental indicators. They provide clients of Markets.com with a notable competitive advantage.

Unique Features

Headquarters

Cyprus

Regulation

CySEC, FCA, ASIC, FSCA

Year Founded

2008

Type of Broker

Market Maker

Minimum Deposit

$100

Maximum Leverage

1:300

Another benefit at Markets.com remains its asset selection. Forex traders have a choice of 67 currency pairs and 25 cryptocurrency pairs. Equity traders get access to 2,027 equity CFDs, 60 ETFs, and 40 index CFDs. Completing the selection are 28 commodities, 23 in-house created blends (in-house thematic portfolios), and four bonds. Markets.com also provides Forex traders with one of the best commission-free cost structures starting from 0.6 pips on the EUR/USD currency pair. It translates into $6.00 per lot or $12 per round lot. Equity traders pay a fixed commission of $10 or a currency equivalent per side for a total cost of $20 per trade. Other noteworthy advantages include the personalized financial live-stream service XRay, its Investment Strategy Builder, its outstanding order execution statistics, and its transparency.

 

Markets Pros & Cons

Advantages

  • Very Competitive Forex Fees

  • Very Wide Choice of Assets

  • Choice of Trading Platforms

  • Excellent Customer Support

Disadvantages

  • Commodities and Indices Fees Higher than Forex Fees

What is Forex Regulation?

With daily turnover approaching $7 trillion, the low capital requirements to start a portfolio and high leverage combine with countless trading opportunities that drive demand. Many professional firms and multi-national companies deal with Forex every day, and retail traders remain indirectly exposed in numerous ways. A rapidly rising number of them show interest in the attractiveness of Forex trading. They open new online Forex broker trading accounts to get access to the fast-moving market, keeping demand for trading services elevated.

 One of the most critical requirements for a successful trading career is trading with one of the many regulated Forex brokers. I cannot stress the significance of it enough. Never deposit with an unregulated Forex broker, regardless of how attractive an offer they make. The negatives outweigh any short-term positive marketing-related push. One of the worst nightmares of profitable Forex traders is the inability to withdraw their earned capital because their unregulated Forex broker does not honor it. Therefore, traders must ignore any offers from unregulated sources and pay attention to competitive trading environments maintained by regulated Forex brokers.

Not all regulators are the same, and trading from the proper jurisdiction provides a competitive edge. The UK was home to the best regulatory trading environment maintained by the Financial Conduct Authority (FCA). It changed following counter-productive regulatory changes by the European Securities and Markets Authority (ESMA). It made EU-based Forex brokers the least competitive globally. With the Brexit transition period ending at 23:00 on December 31st, 2020, European Central Time (ECT), the UK financial sector is expected to make changes and return to its previous glory. London remains the financial center of the world and is ideally positioned to expand its leadership position. UK Forex brokers have always been among the industry leaders. Australia offers Forex traders another excellent and competitive trading environment. The Australian Securities and Investments Commission (ASIC) ensures one of the best regulatory jurisdictions. Since former hotspot Cyprus and the Cyprus Securities and Exchange Commission (CySEC) fall under ESMA jurisdiction, one exciting regulatory environment to monitor is South Africa and the Financial Sector Conduct Authority (FSCA). South Africa shares the same time zone as Cyprus, is an English-speaking country and a G-20 member.

Forex regulation is a set of rules by an authority with enforcement powers that ensures brokers treat customers fairly. It also enables the financial health and stability of the system and provides dispute resolution. In some cases, an investor compensation fund in case of bankruptcy by a broker exists. Not all regulators grant equal protection and enforcement, and some maintain an uncompetitive trading environment like the ESMA, which applies to all EU-based brokers. I highly recommend that traders always trade with one of the thousands of regulated Forex brokers. While it cannot guarantee against fraud and malpractice, as well-documented cases in the US and Cyprus have shown, it offers a layer of protection and security that traders should demand from their brokers. Traders should seek a minimum of five years under a well-regulated environment and must also check the track record. Many brokers faced fines but continue to cater to clients. It shows that an attempt to take advantage of unknown retail traders was made, but the regulator caught them.

Why Should You Choose a Regulated Broker?

Most traders conduct some research and due diligence to identify a trustworthy Forex broker and often follow the best-marketed one or the one with the most appealing offer, usually in the form of bonuses and promotions. While the majority of brokers and all traders hope for the best outcome, issues may arise. They do not necessarily originate from malpractice, but a technological glitch, communication error, administrative backlog, or a third-party mistake may occur. Trading with a regulated broker provides traders access to a qualified team to resolve those issues. Regulated Forex brokers must adhere to financial regulations and maintain a certain amount of capital reserves before receiving a license to operate. Frequent audits ensure that client deposits and earnings reflect the accurate value, and regulated Forex brokers must segregate client funds from corporate ones. The processing times of financial transaction is faster and more transparent. It also enforces the protection of information provided by traders during the registration process.

Regulated Forex brokers must satisfy know-your-client (KYC) and anti-money laundering (AML) stipulations, adding another layer of security. A compensation fund protects against any unexpected financial failure of the broker, which remains dependent on the jurisdiction. Some take out additional insurance protection or apply for membership with the Hong-Kong-based Financial Commission, an independent self-regulatory organization and external dispute resolution (EDR) body focused on the Forex market. The Compensation Fund provides coverage for traders up to €20,000 per case if the broker defrauded traders. It emerged as a favorite to many regulators. It enables brokers to register in business-friendly jurisdictions while offering superior protection. Regulated Forex brokers also process withdrawals swiftly, act in the best interest of clients, and stay clear of manipulating prices or stop-loss hunting. An ECN execution model generally provides more safety than a market maker model. The broker is not the counterparty and receives compensation via volume-based commissions rather than a mark-up on spreads and client losses.

Major Regulatory Bodies

All countries have a financial regulator, but there are several major regulatory bodies for the Forex market with a distinct cluster of brokers. Below is a list of the most dominant ones for Forex traders to be familiar with and to recognize:

  1. Australia - Australian Securities and Investments Commission (ASIC): A member of the UK Commonwealth of Nations, Australia quietly grew into another Forex hotspot with excellent and competitive regulation.
  2. Belize - International Financial Services Commission (IFSC): The IFSC is another trusted regulator that offers excellent trading conditions and serves as a significant Forex broker location, especially for Latin American expansion.
  3. Canada – Investment Industry Regulatory Organization of Canada (IIROC): At a federal level, IIROC oversees Forex regulation in Canada, with a legal duty to supervise and regulate investment dealers although the provinces have their own localized regulations. The IIROC has a reputation of a strict regulator – many analysts would say overly strict, although Canadian residents are certainly well protected. In any case, much of the overly harsh Canadian regulation is imposed at provincial level, especially in Alberta.
  4. Cyprus - Cyprus Securities and Exchange Commission (CySEC): A former haven for Forex brokers, the ESMA turned it into the least competitive and most recognized Forex regulator. Numerous high-level scams operated under its oversight.
  5. Dubai - Dubai Financial Services Authority (DFSA): Regional traders, thanks to the DFSA, have a secure and competitive trading environment. Dubai is the financial service center of the Middle East, gaining traction among Forex brokers.
  6. Mauritius - Financial Services Commission (FSC): Another well-known regulator with a business-friendly environment preferred by many Forex brokers.
  7. Seychelles - Financial Services Authority (FSA): The FSA maintains an offshore center for many financial firms. It remains a top location for Forex brokers with an active regulator.
  8. Singapore - Monetary Authority of Singapore (MAS): Singapore remains an excellent gateway to Asia, is a growing Asian financial hub, and an attractive destination for Asian-focused international Forex brokers.
  9. South Africa - Financial Sector Conduct Authority (FSCA): An up-and-coming regulator set to benefit from missteps by the EU.
  10. Switzerland - Swiss Financial Market Supervisory Authority (FINMA): The global banking center provides well-trusted regulatory oversight with a forward-thinking approach.
  11. UK - Financial Conduct Authority (FCA): The FCA remains the best overall financial regulator globally. Many of the best-regulated Forex brokers operate under its jurisdiction. Following Brexit, the competitiveness the UK lost under the ESMA will return and enable UK-based brokers to increase their market share further.
  12. US - Commodity Futures Trading Commission (CFTC): Three of the most significant brokerage frauds occurred under its oversight over the past decade. This regulator cripples financial innovation, and US traders operate under the least competitive framework.

The above listing includes the most prominent national regulatory bodies. The reader is encouraged to explore our detailed listing of financial regulatory bodies for each country set out in alphabetic order.

How Forex Regulations Protect You

Forex regulations protect traders by ensuring that brokers segregate client deposits from corporate funds. They also provide an enforcement mechanism against broker fraud, police the financial sector, and issue warnings. Traders can check their websites and databases to retrieve information about brokers. Regulators require brokers to submit trade execution and financial data and command minimum capital requirements before granting an operating license. Some regulations remain counter-productive, like the ill-advised ESMA crackdown on leverage and bonuses, but traders should never trade with an unregulated Forex broker. Trading with uncompetitive EU-based brokers can harm profitability and limit competitiveness, but there are many viable options. I urge all traders to conduct their due diligence and select any of the regulated Forex brokers in competitive jurisdictions with a clean track record.

FAQ

Is Forex trading regulated?

Most Forex trading remains unregulated in the over the counter (OTC) market, but all trustworthy Forex brokers maintain regulation. Traders should never trade with unregulated Forex brokers, regardless of the offer they receive.

What does a regulated broker mean?

A regulated broker satisfied requirements by the supervising authority to receive an operating license. It includes financial stability, staff training, support infrastructure, risk management, and compliance.

Are Forex brokers regulated?

Many Forex brokers have an operating license from one or multiple regulators, but numerous brokers operate as unregulated entities, including subsidiaries, from well-known brokers.

How are brokers regulated?

The level of regulation depends on the authority. Not all regulated Forex brokers provide the protection and security that traders believe. Some rules and stipulations render the trading environment uncompetitive. Others do not enforce regulations or punish violations. I recommend trading with a broker operating under the oversight of the regulatory bodies mentioned above.

Do I need a license to trade Forex?

No, a license for individual traders who manage their capital in their portfolios does not exist. Some brokers will demand traders fill out a questionnaire to determine if they are fit to trade. Several countries ban retail Forex trading, and traders should consult legal advice if in doubt.

Can I trade Forex without a broker?

Yes, it is possible to trade Forex via a bank, exchange office, or peer-to-peer. Trading via an online Forex broker is more convenient and efficient.

How do I know if my broker is regulated?

Each broker provides its regulatory information at the bottom of their homepage. Traders can confirm it by checking the license number against the database of the issuing regulatory authority.

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.

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