| Updated: January 15, 2025UK traders who have yet to find their go-to broker are constantly on the lookout for a reliable and trustworthy Forex brand to guide them through the complex world of financial markets. With numerous options available, it is essential to choose a broker that not only offers competitive trading conditions but also provides a high level of security and protection. This is where FCA-regulated Forex brokers come into play.
Below you can find a list with the best Forex brokers regulated by FCA (United Kingdom):
Top 7 Forex Brokers with FCA Regulation
-
Pepperstone
- Australia & CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading Instruments- Forex
- Indices
- Commodities
- Cryptocurrencies
- Share CFDs
- ETFs
-
Plus500
- Multi-Level Regulated Broker
- Proprietary trading platforms
- Easy to use mobile app
Trading Instruments- CFDs on: Forex
- Crypto
- Indices
- Commodities
- Stocks
- Options
- ETFs
-
Swissquote
- Clients can hold multiple currencies in one account - CHF, EUR, USD, GBP and earn up to 5% interest rate.
- Beyond trading, Swissquote offers banking services, including savings accounts and mortgages
- Traders can use advanced trading platforms, such as MT4, MT5 and a proprietary mobile app for maximum flexibility.
Trading Instruments- Forex
- Commodities
- Stocks
- Crypto
- ETFs
- Bonds
- CFDs
- Options
- Futures
- Mutual Funds
- Indices
-
Tickmill
- Classic and Raw accounts available to suit various trading needs and requirements.
- Popular trading platforms, such as MT4 and MT5.
- Regulated by reputable authorities: ASIC and CySEC.
-
Admirals
- Trade using MetaTrader 4 and 5, as well as Admirals' specialized plugins for additional functionality.
- Access forex, shares, indices, commodities, ETFs, bonds, and cryptocurrency CFDs.
- Admirals is overseen by top-tier regulatory bodies: FCA, ASIC, CySEC, and EFSA, assuring transparency and customer security.
Trading Instruments- CFDs on Forex
- Indices
- Stocks
- Commodities
- Bonds
- ETFs
- Cryptocurrencies
-
IG
- Offers different account types, including DMA (Direct Market Access) one
- Offers turbo warrants on forex pairs, commodities, indices, and equities
- Supports popular platforms like MT4 and TradingView as well as ProRealTime, L2, and more
Trading Instruments- CFDs on Indices
- Shares
- Crypto
- Futures
- Commodities
- Options
- Interest Rates
- Sectors
- Bonds
- Knock-out trading
-
eToro
- Popular broker for social trading
- Trading is conducted on innovative in-house platform
- Offers both investing and trading products
Trading Instruments- CFDs on Forex
- Stocks
- Commodities
- Crypto
- ETFs
- and Indices
Brokers Compared by Spread
| Brand | Commission per lot | |
|---|---|---|
| Pepperstone | 1.00 (min) | $0 (Standard Account), $7 round-turn (Razor Account) |
| Plus500 | 1.2 | $0 |
| Swissquote | 1.7 |
|
| Tickmill | 0.1 | $0 on Classic Account; $3 per side on Raw Account |
| Admirals | 0.1 | $3 per lot |
| IG | 0.86 av.spread | $0 |
| eToro | 1.0 | $1 or $2 (stocks only) |
FX Brokers Deposit Method Comparison
| Brand | Minimum deposit | |
|---|---|---|
| Pepperstone |  |
$0 |
| Plus500 |  |
$100 |
| Swissquote | |
Standard Account: $1,000; Premium Account: $10,000; Prime Account: $50,000 |
| Tickmill | |
$100 |
| Admirals | |
$100 ($1 for Invest MT5 Account) |
| IG | |
$0 |
| eToro | |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
The Best Forex Brokers by Regulator
| Brand | Maximum leverage | |
|---|---|---|
| Pepperstone | |
1:30 |
| Plus500 | |
1:30 |
| Swissquote | |
1:30 (Europe), 1:100 (International), 1:50 (Middle East), 1:20 (Singapore) |
| Tickmill | |
1:30 |
| Admirals | |
1:30 |
| IG | |
1:30 |
| eToro | |
1:30 (1:400 advanced leverage at Seychelles entity) |
Forex Brokers Platform Availability
| Brand | FX pairs to trade | |
|---|---|---|
| Pepperstone | |
90+ |
| Plus500 | |
60+ |
| Swissquote | |
80+ |
| Tickmill | |
62 |
| Admirals | |
82 |
| IG | |
80+ |
| eToro | |
55 |
Comprehensive Comparison of the Best FCA Regulated Forex Brokers
| Brand | Min. Deposit | Trading Platforms | Spread | Regulation | Trustpilot |
|---|---|---|---|---|---|
 |
$0 |
|
1.00 (min) |
|
|
 |
$100 |
|
1.2 | ||
 |
Standard Account: $1,000; Premium Account: $10,000; Prime Account: $50,000 |
|
1.7 |
|
|
 |
$100 |
|
0.1 |
|
|
 |
$100 ($1 for Invest MT5 Account) |
|
0.1 |
|
|
 |
$0 |
|
0.86 av.spread |
|
|
 |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
|
1.0 |
|
The FCA (Financial Conduct Authority) regulates the UK’s financial services industry, and licensees are subject to strict rules and guidelines to ensure their operations are fair, transparent, and secure. In this publication, we will explore the benefits of FCA-regulated Forex brokers, including their licensing conditions and costs, instrument restrictions, leverage limits, and tax implications.
History and Overview of the FCA (UK)
The Financial Conduct Authority (FCA) has been the primary regulator of the UK’s financial services industry since its inception in 2013. The FCA is considered a tier-1 regulator, which means that it is known for being among the strictest regulators the world over.
However, the history of financial regulation in the UK dates back to the 19th century, with the establishment of the Board of Trade in 1786. Over the years, the regulatory framework has undergone significant changes, with the creation of the Financial Services Authority (FSA) in 2001 and its eventual replacement by the FCA a little over a decade later.
The primary goal of the FCA is to protect consumers and promote competition in the financial services industry. It achieves this by setting and enforcing rules, monitoring the activities of financial institutions, and providing guidance to financial institutions on how to comply with local guidelines. The FCA’s regulatory powers extend to a wide range of financial services, including banking, insurance, investments, and Forex trading. Currently, banks, insurance companies, investment firms, and brokerage companies are among the entities that must adhere to the FCA’s rules.
Licensing Conditions and Costs
The FCA’s regulatory framework is designed to ensure that financial institutions operate in a fair and transparent manner and that consumers are protected from financial harm. Since the regulator plays a crucial role in maintaining the stability and integrity of the UK’s financial system, it demands that forex brokers adhere to strict rules if they wish to obtain and retain an FCA license. The licensing process involves several stages:
- Application fees: The FCA charges an application fee, which is dependent on the size of the firm and the type of services offered. Currently, the fees range from £270 to over £200,000.
- Anti-Money Laundering Regulations: Brokers need to ensure that they implement robust AML procedures. This way, bad actors will not be able to use the broker’s services for the purpose of money laundering and terrorist financing practices.
- Risk-management: Brokers are required to have a risk-management framework in place to ensure that they can withstand potential losses and maintain the stability of the financial system.
- Investor protection: The FCA demands that investors are provided adequate protection, including compensation schemes and clear disclosure of risks. In the unlikely event of a broker’s insolvency, the FCA’s Financial Services Compensation Scheme (FSCS) grants protection up to £85,000 per person per authorized firm.
- Segregation of client funds: Brokers need to segregate client funds from their own operating capital to prevent commingling and ensure that client assets are protected should the broker become insolvent.
How to Confirm License Legitimacy
Typically, a broker that caters to UK traders will include the FCA logo on its website, as well as a list of its licenses in the footer of the homepage. If you cannot find this information, the broker’s customer support team will also provide you with details regarding the licensing, so do not hesitate to reach out. However, it is essential to verify the legitimacy of a broker’s FCA license. You can achieve this by following the steps below:
- Check the FCA register: Visit the FCA’s website and search for the broker’s name or license number in the register of authorized firms. Make sure to select “Firms” in the search options.
- Verify the License Number: Ensure that the broker’s license number is correct and matches the one listed on the FCA register. If there are inconsistencies, there is a risk the website you have visited is attempting to impersonate an FCA-licensed broker.
- Contact the FCA: If you have any doubts or concerns, you can contact the FCA directly to verify the broker’s license status.
While the FCA has granted licences to a wide array of legitimate and reputable firms, there are brokers that have attempted to target traders of a specific jurisdiction without valid authorization. Some have even resorted to faking their licenses.
The FCA frequently issues warnings regarding scams, which can help you keep up to date on what to look out for. In addition, There is also a list of firms that are not authorized, which can be browsed easily thanks to the provided search bar.
Instrument Restrictions
In the UK, retail traders are permitted to trade currencies, stocks, indices, and a plethora of other financial instruments. Both contracts for difference (CFDs) and spread betting are legal as well. There are some restrictions on certain instruments, however.
Since 2020, the sale of derivatives and CFDs, in particular, on cryptocurrencies has been banned under FCA regulations. This applies strictly to retail traders, as brokers are allowed to offer crypto CFDs to professionals.
Another ban left brokers prohibited from selling binary options to retail consumers, seeing as they have been associated with high-pressure sales tactics and exaggerated returns, leading to significant losses for many investors.
Of course, traders should keep in mind that regulations are not the only factor that determines whether a given broker will offer specific instruments. There are online brokers out there that fail to offer forex trading, while some focus exclusively on forex. Thus, traders are advised to browse a given broker’s instrument selection before registering.
Leverage Limits
The FCA has implemented leverage limits on Forex trading, which apply to all UK-licensed brokers. The maximum leverage limits are as follows:
- Major currency pairs: 1:30 for major currency pairs, such as EUR/USD and USD/JPY.
- Other currency pairs: 1:20 for minor and exotic currency pairs, such as EUR/GBP and USD/CAD
Forex leverage can be a potent tool for traders that can amplify potential gains. When one uses leverage, however, they also face greater risks of incurring substantial losses when things go south. Even small price movements can wipe out a trader’s account balance in a matter of minutes if they use excessive leverage.
With the above issue in mind, the FCA’s limits aim to promote a safer and more stable financial environment for UK-based investors. The decision to impose such restrictions is part of the FCA’s ongoing efforts to protect retail consumers from the potential risks associated with CFD trading.
Do UK Traders Pay Taxes?
In the UK, trading taxes are complex and vary depending on the type of trade and whether the individual is a retail or professional trader. The UK’s tax authority, HM Revenue & Customs (HMRC), views trading as a business activity, subject to income tax and capital gains tax. This means that traders are required to report their profits and losses on their tax returns.
It’s essential for UK traders to understand their tax obligations and seek professional advice to ensure compliance with HMRC regulations. Here are a few key factors to keep in mind as an aspiring forex trader:
- Profits from trading are subject to income tax, with rates ranging from 20% to 45%.
- Capital gains tax applies to profits made from forex and CFD trading, with rates of 10% or 20% depending on the individual’s tax status. Spread bettors are exempt from such taxes.
- Losses can be offset against profits, but there are limits on the amount of losses that can be carried forward.
- If you wish to become a professional trader, you will be subject to an income tax ranging from 20% to 45%.
Conclusion
Choosing a reliable and trustworthy Forex broker is crucial for your trading success. If you reside in the UK, this means that you will need to stick to brokers that operate under the supervision of the FCA.
FCA-regulated Forex brokers offer a high level of security and protection for your investments, as well as competitive trading conditions. By understanding the licensing conditions and costs, verifying the legitimacy of a broker’s license, and being aware of instrument restrictions and leverage limits, you can make informed decisions about your trading activities. Additionally, as a UK trader, you must be aware of the tax implications of your trading profits.
Why You Should Trust RationalFX
When it comes to making informed decisions about forex brokers, it’s essential to rely on trustworthy sources. RationalFX, a company with over 17 years of experience since its founding in 2005, has established itself as a credible authority in the industry. With an impressive collection of over 2500 reviews on Trustpilot, boasting a score of 4.2, it’s clear that Rational FX has built a reputation for providing reliable and unbiased information.
What sets Rational FX apart is its rigorous evaluation process, which considers over 30 different criteria when selecting forex brokers. This comprehensive approach ensures that every aspect of a broker’s service is taken in consideration, including regulation, forex spreads, trading platforms, deposit methods, and reputation. With its wealth of experience, transparent review process, and outstanding customer feedback, Rational FX is a trusted source for anyone seeking reliable information on forex brokers. You can reach us via e-mail at [email protected] or contact us through our social media accounts here: Facebook, YouTube, or leave a feedback here.