Why Trade with an FCA Regulated Forex Broker?
There are few genuinely strong regulators in the world; the Australian Securities and Investments Commission is one, the Cyprus Securities and Exchange Commission is another, and the UK’s Financial Conduct Authority (FCA) is probably the leading member of this group.
London, and the UK in general, is recognised globally for being a strong, reputable financial centre and so it stands to reason that the UK’s financial regulator also has a reputation for reliability and strength.
The FCA oversees all British firms and individuals offering financial services and applies one of the world’s strictest regulatory environments. This is also the case for Forex brokers operating in the country, with the FCA being very active in enforcing compliance with the rules and regulations governing CFD products and consumer protection.
The FCA has a long-standing reputation for guaranteeing trader security and dealing harshly with bad brokers. We will talk about the FCA’s broader role in ensuring a safe environment in more detail below, but first, let’s look at the current benefits of trading with an FCA regulated broker.
The FCA’s Role In Forex Trading
FCA-regulated Forex brokers are governed by rules that enhanced trust through enforcing market discipline, and adjust provider behaviour to prevent harm from happening to customers, and assisting when things go wrong.
The FCA’s role in Forex trading is to oversee the activities of the Forex brokers, to ensure compliance with rules that are designed to protect end-users and the overall economy.
A Forex broker that is regulated by the FCA is required to consider the interest of their customers and treat them fairly. Also, the FCA requires that information is shared with customers in a way that is easy to understand, fair and not misleading.
The mission of the FCA.
The Financial Conduct Authority (FCA) is the UK’s financial regulatory organisation. It replaced the Financial Services Authority in 2012, which had been compromised during the financial crash when it was revealed that flaws in the organisation had led to poor regulation. The FCA is more powerful and consumer-focused than the FSA was, which is good news for Forex traders as they are very well protected under the new regime.
The mission of the FCA is to regulate financial services through a framework of directives, and enforcement mechanisms. The board of the FCA reports to the Financial Services Ombudsman who can bring information to the attention of parliament, and the industry through a series of publications.
What consumers can expect from the FCA
In principle, a consumer should expect to get protection from the regulation and the enforcement of rules of the FCA. The framework is designed to help protect those who may have a lesser understanding of the financial markets, from those who have a better understanding of them.
This protection includes helping Forex brokers set up rules for how to handle complaints and correct any issues.
The FCA’s main purpose beyond the regulation of financial organisations is to provide customers with reliable information. Their website maintains a warning list, which is a list of organisations that are potentially seeking to defraud customers, as well as provide information on the regulated entities and the products they offer.
The customer centre is available weekdays from 8 am to 6 pm, and half-day Saturday from 9 am to 1 pm, which gives potential traders access to knowledgable financial specialists who can help answer questions, or take note of a complaint or report a scam.
All FCA Regulated Brokers
These are all the FCA regulated brokers we have reviewed. They are ordered by overall score, placing the best ranked broker at the top of the list.
Key achievements of the FCA
The FCA achievements taking into consideration their short history are significant. Since 2013, when the FCA started regulating the UK financial industry, London has become more acknowledged as a major global financial centre.
Before the FCA being set up, there was no mechanism in the UK to keep the retail investor safe from companies that promoted complicated financial products that have a high-risk financial impact on the consumer.
The immediate achievement of the FCA the development of the requirements for financial organisations designed to protect the consumer, and a set of policies to help those who have already been harmed get easy access to a remedy.
The FCA is also transforming attitudes of the companies and those who work in the financial sector in the UK. This change has meant for fairer products, marketing tactics, and the development of a more customer-centric approach.
In changing the way companies operate internally and how they work with clients to remedy issues they create, the FCA has accomplishment has made the financial sector in the UK and the companies that are regulated by it, much safer for the average retail Forex trader.
The history of the FCA
Commenced in December 2012 with the passing of the Financial Services Act of 2012, the FCA was founded in April 2013 to replace the Financial Services Authority (FSA) that had been in place since 2001.
The FSA acted in an arbitrator role and had a broader mandate to oversee the entire financial system. When the FCA was created, it became responsible for the policing of the UK financial activities and the banking system. At the same time that the FCA was founded, sister agencies of the Bank of England’s Financial Policy Committee and the Prudential Regulation Authority which take responsibility for other financial sectors.
The global reputation of the FCA
The FCA is internationally recognised as one of the most trusted and objective regulatory services. It is a traditional organisation, and the framework which governs was created in 2013 to manage the current-day marketplace. This activity has indirectly impacted many millions of UK households and has set a standard for other similar organisations worldwide.
FCA Structure
The FCA board is responsible for the overall framework implementation – which includes oversight of 6 committees which report into it, and the appointment of the Chief Executive to execute on the strategy set by the board.
The committee structure gives insights into the risks the FCA sees in the market, and how they work together in a system of self-regulation and gradual adaptation to prevent against new threats.
Risk & Strategy Committee evaluates the risks that are posed by the financial organisations on the market and are tasked to find strategies to mitigate those risks from being passed on to the consumers.
The Audit Committee monitors the effectiveness of the policies and the strategies used by the FCA.
The Regulatory Decisions Committee is the committee that takes actions against organisations that violate the rules. This committee acts on tips from the public and information from the investigators on the audit committee.
The Oversight Committee then works with the board of the FCA to manage their relationship with the parliamentary appointed Financial Services Ombudsman who is the UK’s official expert in sorting out problems with financial services. This relationship is valuable as this brings information to the government so that laws can be written, and government oversight is present.
Remuneration Committee is a committee that oversees a transparent process for how executives at the FCA are paid. This process ensures fair treatment of all staff and also respects that the FCA is a publicly funded organisation.
Similar to the Remuneration Committee, the Nominations Committee, acts as an internal mechanism to ensure the integrity of skills on the board so that the mandate of the FCA continues to be acted on effectively.
These committees, working with and feeding off each other, create a robust self-regulated system of rule-setting, auditing, enforcement and accountability to the people of the UK.
Summary
The FCA is a highly-valuable protective component of the UK financial services system that has been put in place to protect consumers with little financial knowledge from organisations with more knowledge selling them complex and risky financial products.
Any organisation that is regulated by the FCA is mandated to treat the customer fairly, and in the absence of a customer directive, make the decision that best suits the interest of the customer.
An FCA-regulated organisation takes responsibility for the accuracy and transparency of the information they promote and maintain discipline in their internal processes that are designed to protect themselves and their clients.
A Forex broker that is regulated by the FCA will expect their advice and support to be available in helping set up internal processes to protect and remedy issues that should arise in their business.
Overall, an FCA-regulated broker can be trusted to protect your funds, never communicate misleadingly, and has the client’s best interest in mind when doing business selling clients financial products and services.
Forex Risk Disclaimer
Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products.
Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.
Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)
Our Methodology
Our State of the Market Report and Broker Directory are the result of extensive research on over 180 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.
With over 200 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal.
In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.
All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers.
4.29
Accepts Filipino Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the DFSA
4.29
