Over the centuries, the United Kingdom has managed to preserve some of the world’s most cherished achievements of human civilization. The education it provides is one of the highest quality, its monarchy is one of the oldest on the planet, and the geopolitical standing has barely shaken despite undergoing various hardships and two World Wars. The UK economy is also famous for being extremely strong and far-reaching, both within the European Union (EU) and in the international arena. The opportunities for profit that it offers are plentiful, and almost every sector of the British national economy is showcasing a gradual growth.
It does not, therefore, some as a surprise that in the best traditions of the ancient monarchy, the UK has been crowned as the “Forex market king”. Indeed, the size and the rapid of the British FX market are astonishing. The recent findings show that the overall amount of traders in the country reaches a total of 280,000, which, consequently means that roughly one in every 165 internet users is somewhat involved in trading Forex. The guide that you are about to read is aimed at providing both the beginners and the experienced traders with comprehensive information on the best Forex brokers in the UK, the regulatory body and measures operating in the country, and whether or not is advisable to start trading Forex there.
As we have just mentioned, the UK FX market is duly treated as one of the biggest and most developed ones in the world. By definition, it means that the amount of Forex trading brokers in the UK is quite high. While in the grand scheme of things such a notion is a good illustrator of the market’s successful and sustainable growth, it might also mean that those who are looking for the right broker to join might end up feeling overwhelmed and stressed by the variety of options available. Our guide aims to make the task a bit easier for both amateur and experienced traders alike, by providing both with a comprehensive list of the top brokers in the UK, their success rates, requirements, and security mechanisms in place. Please read it until the end to ensure that you possess all the information necessary to make the right choice.
CySEC, IFSC, ASIC
100 currency units
CIMA, FCA, NFA
The legal age required to start trading in the UK is 18, and anyone who has reached it and is capable of meeting the requirements issued by the broker of their choice is able to start trading. When it comes to the costs of doing that, it is safe to say that it is completely free of charge. What we mean by that is that you won’t be required to pay additional fees for joining the broker, however, you will need to make a deposit that will later be used for your trading session. The minimum deposit amount varies depending on the broker that you choose – some of the top Forex brokers in the UK will be asking for as little as 5 USD, while others might be looking at a starting point of 500 USD.
There is a good reason why the British FX market and the Forex trading brokers in the UK are considered as the most trustworthy, reputable, and prestigious, both across the EU and, quite possibly in the world. The local regulatory measures are both efficient, strict enough, and not damaging to the overall growth of the market at the same time. By definition, overall trading experience in the UK is defined by transparency, accountability, and safety of the traders and their respective funds. However, should this really be such a surprising notion for one of the largest and fastest-growing FX markets that currently exist? Below we will dive deeper into the various types of regulations that the Forex trading brokers in the UK have to oblige by, and the specific benefits of each one of them.
The main regulatory body in the Uk is the Financial Conduct Authority (FCA), which was established in 2013 instead of the old Financial Services Authority. It is currently responsible for overseeing 58 000 various financial services, including banks, mutual societies, financial advisers, and, of course, the Forex trading brokers in the UK. With such an extensive scope of responsibilities, this body sets itself an ambitious maintaining healthy competition, customer safety, and integrity of the sectors under its direct regulation. Judging by the overall state of the UK markets, including the FX market, one can definitely see that the body is doing an amazing job of performing its functions efficiently, all while not being an extension of any governmental structure. But what exactly are the comprehensive FX market regulations that seem to be working so well?
As with the other regulatory bodies, the main function of the UK’s FCA is to issue licenses to the local brokers. The main trick of doing that is finding a perfect balance between having enough regulations to ensure that only the most reputable and reliable brokers will be permitted to provide their services to the local populace, and, at the same time, the conditions that are in place do not hinder the overall sustainable growth of the FX market. The reason why some of the best Forex trading brokers in the UK are so famous for their perfect reputation is the ability of the FCA to encourage the development of the Forex market, all while having local brokers abide by the comprehensive regulations that are completely in line with the standards issued by the Markets in Financial Instruments Directive (MiFID) and the European Securities and Market Authority (ESMA).
The most efficient way in which the FCA keeps the Forex trading brokers functioning flawlessly is by requiring them to submit regular audits and reviews of their activities. Those regular check-ups are needed for the UK regulatory body to make sure that the local brokers perform their functions and provide their services in full obedience with the standards that the body itself, and the ESMA have issued.
Such a requirement is not only useful for the FCA in terms of assessing whether or not the brokers carefully follow its instructions, but is also an integral part of monitoring the pitfalls within the market and coming up with the ways to improve them. Finally, by demanding detailed reports from its brokers, the FCA fulfills its role of the overarching customer protectorate and reduces cases of fraud and misuse of funds from little to almost non-existent.
One of the most common requirements that almost every regulatory body imposes upon its brokers is the necessity to keep the broker’s operational funds separately from the funds of its traders. There is strong reasoning behind it because prior to making this requirement a common standard, the market has often witnessed that in case of the broker going bankrupt, the money of its clients got frozen, or even lost completely. On top of that, there was always a threat of broker misusing the trader’s funds, whether intentionally or not, which is why a clear need to add an extra layer of customer safety became apparent. As previously mentioned, this measure is very common across the EU, however, the FCA was among the first regulatory bodies to adopt it in an attempt to provide traders with some scarcely needed peace of mind.
Leverage in Forex trading is always a subject of a heated debate on whether or not it is an unnecessary risk that can ultimately bring no good, or whether they can become one of the best tools that the Forex trading brokers in the UK can provide to its clients. While it is true that leverage can significantly increase the profits of a skilled, experienced trader, it is also true that for the beginner it can result in major losses and additional money that needs to be repaid as a debt to the broker. In order to prevent this from happening, the FCA has introduced caps on the leverages that make sure that traders are protected from the unwanted financial losses at all times.
The maximum leverage rate you can get from your Forex broker in the UK is set to 1:30, or 30:1 – doesn’t make any difference. What does make a difference is that you’re always in a more or less stable area in terms of leveraging your positions, because one can hardly overstate the dangers this feature comes with.
This particular notion that is applied to all of the Forex trading brokers in the UK, is, nonetheless, not exclusive to this country only. The aim of this regulation is to make sure that the broker is not operating on the verge of bankruptcy, and, thus, does not subject its traders to any unnecessary risks. This also a requirement that has to be met at all times, as the failure to do so might result in the broker having to face appropriate measures from the FCA. In the UK, the minimum required sum depends upon the type of license that the broker aims to obtain.
There are three main types of licenses, each with the minimum capital requirement of their own – dealer license, intermediate license, and the restricted broker license. The cheapest of all is the restricted broker license – it only allows brokers that possess it to provide and market financial services, without a possibility to hold traders’ funds, and the cost of such a license is 50 000 EUR. An intermediate license is usually obtained by the Straight Through Processing (STP) brokers, and the minimum amount for it is 125 000 EUR. Finally, the most expensive of all, the dealer license or the “market maker” license, as it is often referred to would have to be obtained by a broker that has a hold of 730 000 EUR of trading capital.
As you can probably tell, the minimum trading capital is closely tied to the services that the Forex trading broker in the UK is permitted to provide. Without going into too much detail we can, nevertheless, confirm that such regulation has long been showing great results at ensuring the protection of the traders’ funds, and the detailed approach of the UK’s FCA has proven to be extremely efficient.
FCA has established a strong reputation as the regulatory body that takes customer protection extremely seriously and is well-known for going the extra mile to reinforce it even further. While many regulatory bodies state that in order to obtain a license from them, the broker has to be sufficiently qualified, the FCA conducts a thorough assessment to determine whether it is truly the case.
Some of today’s best Forex brokers in the UK once had to go through a nuanced process of submitting a detailed plan and complete information of the relevant personnel to obtain the license from FCA. Such measure, although seemingly bureaucratic at first sight, ends up being that additional layer of security that most of the traders seek for their own peace of mind. Indeed, one is bound to agree that knowing that broker, or, in this case, the variety of Forex trading brokers in the UK are officially regarded as sufficiently qualified professionals, who are less likely to put you and your funds at risk. This is just another way in which the FCA demonstrates the continuous dedication to customer protection.
Most of the regulatory bodies across the world are defined by their overarching goal of operating in the best interests of the traders, however, in doing that, the FCA is showcasing a remarkable dedication. This entity does not only put forward strict conditions that the brokers have to meet if they want to obtain the FCA license, but also carefully control their operations upon the issue of the license. A good example of that is the close attention that the FCA pays to the Forex trading brokers that are potentially involved in malicious activities, such as trading against their clients. Doing that is strictly prohibited in the UK, and the failure to abide by this rule results in immediate strict punishment. Similarly, marketing potentially risky trading without providing a clear disclaimer of what it could potentially result in is also punishable by the FCA.
Having assessed the UK FX market, we can say that it is easy to recommend utilizing its benefits to both the beginners and the returning traders. British Forex market is one of the largest in the world and is duly entitled as the king of Forex markets. On top of the impressive outreach and the rapid speed of sustainable growth, the market is carefully regulated by the FCA, which puts customer security ahead of everything else. If you are a British citizen, we can assure you that Forex trading brokers in the UK are some of the safest and most prestigious in the world, and there is a handful of opportunities for lucrative profits within this fast-growing market.