What forex brokers are regulated in the UK?
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This guide lets you know everything about how the Financial Conduct Authority (FCA) regulates forex brokers in the UK. Read on to find out which brokers are regulated, as well as what the regulation involves and how it protects traders.
Regulated forex brokers in the UK
Here is a list of some of the top forex brokers that are regulated and have a FCA licence number. We have included each brokers name and regulatory licence number in the table. Find more details about how to check if a broker is regulated below.
|UK forex broker||FCA licence number|
|IG Markets Limited||195355|
|CMC Markets UK plc||173730|
|FxPro UK Limited||509956|
|Interactive Brokers (UK) Ltd||208159|
How to check if a forex broker is regulated in the UK
To find out if a forex broker is regulated in the UK all you need to do is find its registration number and check it against the Financial Conduct Authority’s list. Forex brokers state their register numbers in their legal disclaimers, which are usually found in the website footer. On a forex app, the information is normally available in the settings.
Once you have found it, head over to the FCA register and enter the number to find all of its registration and regulation details. Here’s an example using the forex broker, Capital.com.
Step 1. Go to the brokers website (in this case Capital.com). Scroll down to its disclaimer and find its FCA register number – 793714
Step 2. Visit the FCA register and enter the registration number. Click ‘Firms’ followed by ‘Search’.
Step 3. If the broker is regulated you will see a screen like this. Click the broker’s name for more information on its registration details.
What does FCA regulation mean?
Forex trading in the UK is regulated by the Financial Conduct Authority (FCA). Forex brokers who operate in the UK need to be regulated by the FCA, which is independent and formed by the government. It is funded through membership fees and forex brokers need to hold a minimum of £1 million in cash in order to maintain their FCA licence.
The FCA has many roles, and maintaining fairness and stability among broker platforms is one of its main tasks. Making sure traders are protected from unscrupulous brokers and scams are also high on its list of priorities. Here is a brief rundown of the FCA rules for forex brokers in the UK:
- Negative balance protection. Brokers are required by law to provide Negative Balance Protection (NBP) to all of their clients. This means retail traders cannot lose more than they initially deposited into their trading account. It’s a particularly important protection for traders that use high leverage forex brokers.
- Segregated client funds. The FCA requires all brokers to hold clients’ funds in a separate bank account to that which is used for operational purposes. If the broker becomes insolvent, traders’ funds are secure.
- Regulations on marketing materials. Brokers need to comply with strict rules surrounding marketing materials in order to meet FCA regulations. Brokers cannot advertise things to entice traders unfairly.
- Instant processing of withdrawals. When a trader asks for a withdrawal, a forex broker is required to process it instantly. Previously, it was common practice for withdrawals to take days to process, however the FCA has put a stop to this.
- Submit annual accounts. UK regulated forex brokers have to submit annual accounts to the FCA. Brokers need to hold a minimum of £1 million in operating cash which rises in line with their number of clients.
- Compensation scheme. The FCA has a compensation scheme called the financial services compensation scheme (FSCS). If a broker becomes insolvent, traders are able to claim up to £50,000 in compensation.
Yes you can use a forex broker that is located anywhere in the world. However if you opt for one that is not located in the United Kingdom you will not benefit from any of the strong regulation that is required. Other jurisdictions have their own regulations although the UK’s FCA is considered one of the strongest in the world.
Yes, forex trading is legal in the UK. For a forex broker to operate legally in the UK, they need to be a member of the Financial Conduct Authority which provides regulatory services.
eToro is the best FCA regulated forex broker. It’s one of the biggest brokers in the world and is regulated in the United Kingdom. Its licence number is FRN 583263. eToro has lots of forex pairs available to trade and has other features like social trading that make it a top platform.
The regulatory body in the UK restricts leverage to 30:1 for major currency pairs and 20:1 for minor pairs. Traders classed as professionals can access leverage up to 500:1. Outside of Europe it is possible to obtain higher leverage. Trading using leverage is risky and can lead to large losses and to protect retail traders, the FCA and other European regulators put limits on the amount of leverage available.
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