What is the FCA?
The FCA is one of the world’s most respected financial regulatory agencies. It is a very traditional but well-funded organization, making regulatory changes and issuing warnings to protect would-be traders and maintain fairness in the CFD industry.
There are few genuinely strong regulators in the world; the Australian Securities and Investments Commission is one, and the Cyprus Securities and Exchange Commission is another. 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, 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 dealing harshly with bad brokers. We will talk about the FCA’s broader role in ensuring a well-regulated environment in more detail below, but first, let’s look at the current benefits of trading with an FCA-regulated broker.
- Segregated Accounts: Like most good regulators, the FCA ensures that all brokers keep client funds segregated from broker operational funds and in Tier 1 banks.
- Operating Capital: To ensure that all Forex brokers can maintain their clients’ positions in the market, every FCA-regulated broker must have at least 1 million GBP in operating capital, which increases according to the number of traders and the trading capital. This is to ensure that all brokers can meet their financial obligations without fail.
- Instant Withdrawal Processing: Brokers must ensure that all withdrawals are processed instantaneously.
- Financial Service Compensation Scheme (FSCS): The FSCS is one of the most generous compensation schemes in the world. It protects traders against broker bankruptcy by providing a guarantee of up to 50,000 GBP in compensation.
All FCA Regulated Brokers
This is our list of all FCA-regulated brokers we have reviewed, sorted by overall rating. Those brokers with the highest overall score will appear at the top of the list.
Scroll for more details
What is the FCA’s Role In Forex Trading?
The FCA’s role in Forex trading is to oversee the activities of the Forex brokers, to ensure compliance with rules designed to protect end users and the overall economy.
FCA-regulated Forex brokers are governed by rules that enhance trust through enforcing market discipline, adjusting provider behaviour to prevent consumer harm, and assisting when things go wrong.
A Forex broker that is regulated by the FCA is required to consider the interests 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 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 protection from the regulation and the enforcement of the 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 handling complaints and correcting 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 and 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 knowledgeable financial specialists who can help answer questions, take note of a complaint or report a scam.
Key achievements of the FCA
The FCA’s achievements, considering its 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 was set up, there was no mechanism in the UK to keep the retail investor safe from companies that promoted complicated financial products with a high-risk financial impact on the consumer.
The immediate achievement of the FCA is 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 the attitudes of the companies and those working in the UK’s financial sector. This change has meant fairer products, marketing tactics, and the development of a more customer-centric approach.
The history of the FCA
The FCA replaced the Financial Services Authority in 2012, whose reputation had been impacted during the financial crash when it was revealed that structural flaws in the organisation had led to poor regulation. As a result, the FCA is more powerful and consumer-focused than the FSA was.
The FSA acted as arbitrator 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 took 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 it 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 organizations worldwide.
FCA Structure
The FCA board is responsible for the overall framework implementation – which includes oversight of 6 committees which report to it, and the appointment of the Chief Executive to execute 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 new threats.
The Risk & Strategy Committee evaluates the risks posed by the financial organisations on the market and is 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 action 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, the UK’s official expert in sorting out problems with financial services. This relationship is valuable as it brings information to the government so that laws can be written, and government oversight is present.
The 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 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 valuable protective component of the UK financial services system. One of its many roles is ensuring that consumers with little financial knowledge are treated fairly by companies providing complex and risky financial products, such as Forex brokers. In the absence of a clear customer directive, all FCA-licensed companies must make decisions that best suit the customer’s interest.
An FCA-regulated organisation takes responsibility for the accuracy and transparency of the information it promotes and maintains discipline in its internal processes designed to protect itself and its clients.
Overall, an FCA-regulated broker must protect your funds, never communicate misleadingly, and must have the client’s best interest in mind when selling 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: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. 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 about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).
Our Rating & Review Methodology
Our overall Forex Rankings report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers.
Editorial Team
Chris Cammack
Head of Content
Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.
Alison Heyerdahl
Senior Financial Writer
Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.
Ida Hermansen
Financial Writer
Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.
Vanessa Marcos
Financial Writer
Vanessa joined the team in 2023. Born and raised in southern Portugal, she has a BA in Journalism and a Master’s in Literary Theory, both from Lisbon University. Since 2011, she has worked in social media, copywriting, content management, ghost-writing, and SEO. Vanessa loves to write, and although she is a generalist in digital marketing, she always draws on her creativity in her work. She is constantly researching new subjects and finds the analytical depth of Forex trading fascinating.