FCA-regulated forex brokers are among the most sought-after brokers due to extensive protection for retail traders.
Below you will learn more about the protections that FCA offers and why you should opt for an FCA-regulated broker.
|🌍 Country||United Kingdom|
|💰 Compensation Scheme||Yes|
|🔒 Negative Balance Protection||Yes|
FCA Regulated Brokers List
Below are some FCA-regulated brokers which are highly regarded among forex traders.
Please note that some brokers will not let you choose their FCA-regulated entity if you are not from the UK.
Pepperstone Ltd (UK) is authorized and regulated by the Financial Conduct Authority (FCA) with reference number 684312.
With Pepperstone, you can trade FX and CFDs with institutional grade spreads and fees from 0.0 pips.
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✅ 1:30 | 1:400 leverage
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What is the FCA?
The British Financial Conduct Authority (FCA) regulates and supervises financial firms and individuals providing financial services in the United Kingdom.
All forex and CFD brokers based in the UK must be authorized by the FCA in order to be able to provide services.
The FCA is considered the “Gold Standard” among financial regulators and provides excellent and comprehensive protection for retail traders.
FCA supervision involves intense scrutiny, thorough checks, and vigorous investigation of cases.
The British FCA follows ESMAs guidelines when it comes to leverage for retail clients, which means maximum leverage up to 1:30.
Retail clients can apply to become categorized as a professional-client and get considerably higher leverage (up to 1:500 with some brokers).
You must fulfill two of the three following criteria to apply:
- Have you placed 10 significantly sized trades per quarter in the last year?
- Do you have a financial instrument portfolio, including cash deposits, exceeding €500,000?
- Do you, or have you worked in the financial sector in a professional position, with knowledge of derivatives trading, for at least a year?
Professional clients get higher leverage but lose some protections that retail clients have:
- Negative balance protection won’t apply to you.
- The broker will use sophisticated language when communicating with you.
- The broker will assume you have the relevant level of experience when deciding whether their products are appropriate for you.
- Leverage restrictions won’t apply to you.
Security of Funds
Forex Brokers authorized by the FCA must keep all client deposits in segregated bank accounts, which ensures that your funds cannot be used for any other purpose than serving as collateral for your trading activity.
In addition, forex traders using an FCA-regulated broker have access to the FSCS (Financial Services Compensation Scheme) which offers coverage up to £50.000 in case of insolvency.
All FCA-regulated brokers are obligated to provide negative balance protection for retail clients.
The Financial Ombudsman Service is a free service given to consumers that use a financial services company based in the UK.
The Ombudsman resolves disputes between consumers and businesses that provide financial services, such as forex brokers.
If you have a dispute with an FCA-regulated broker, you can contact the Financial Ombudsman and file a complaint.
When you file a complaint, a case handler will first make an initial investigation:
- Ask the financial company for their side of the story
- Weigh up the facts of what’s happened, fairly and impartially
- Tell you and the company what they think via an initial assessment
Most disputes get resolved this way, but if not, you can ask for your case to be referred to an ombudsman.
The ombudsman will review your case again afresh, and make a final decision on the dispute.
If the decision is in your favor, the company has to do what the ombudsman has told them to do, i.e. paying you compensation.
The British FCA offers perhaps the best regulatory coverage for forex traders in the world. When using an FCA-regulated broker, you can rest assured that the broker is under intense supervision and your money is kept safe and secure.
We recommend all traders regardless of country of residence, to consider using an FCA-regulated forex broker.