Forex brokers regulated by the Financial Conduct Authority (FCA) in the United Kingdom are a natural choice for UK traders.
The United Kingdom, being one of the most famous financial world hubs, has always been an appealing destination for financial services firms due to its stability, strong economic and political positions. In addition, the UK maintains a high level of the overall regulatory framework and financial regulation.
Besides money protection, the FCA requires all brokers to cover their clients under the FSCS (Financial Services Compensation Scheme), which provides a guarantee of up to £50,000 in compensation in the event of insolvency.
Overall, every investor or trader who uses FCA Regulated Brokers is well protected.
In this article, we’ll go over the top ten FCA brokers in the UK and explain all you need to know about each one. But first, let’s take a closer look at FCA.
What is FCA?
The Financial Conduct Authority (FCA) is a key independent financial regulatory authority in the United Kingdom. It is the United Kingdom’s official financial markets regulator. Its major mission is to monitor and investigate the operation of financial institutions, including brokerages and is situated in London, United Kingdom.
With that in mind, the primary goal is to guarantee that the code of conduct is fair and that all UK businesses follow it. It is regarded as one of the most genuine regulators in the world, not only in Europe.
The FCA is also the prudential regulator for more than 18,000 financial service firms, which means it requires them to maintain a certain level of capital and ensures their eligible clients’ investments up to £50,000 through the Financial Services Compensation Scheme (FSCS).
The FCA has fined a number of regulated brokers for fraudulent actions. Brokers are well aware that Watchdog is extremely stringent, perhaps even more so than other forex regulatory organizations throughout the world.
What is the Role of the FCA?
The FCA works as both a conduct and a prudential regulator, taking a market-based approach to firm regulatory supervision. The FCA undertakes the following specific functions as a regulator of the conduct of firms functioning in the financial services industry in the United Kingdom:
- The marketing of financial products is regulated.
- Payment systems are regulated.
- Bank supervision in the United Kingdom
- Maintaining the new set of requirements for independent financial advisers that were established in 2012.
The Advantages of Using an FCA Broker
- Since many brokers are more reliable than others, the financial industry has a long history of exploiting individual traders when effective restrictions are lacking. One of the FCA’s main responsibilities is to establish rules to ensure that retail traders are treated fairly and to discipline brokers who break these laws.
- When you trade with an FCA broker in the UK, you have the backing of the UK government to ensure that your trades run smoothly. Brokers who are regulated by the FCA are less likely to engage in unscrupulous tactics such as mixing customer funds with their own.
- They’re also more likely to be fair with your trades. That means you shouldn’t have to deal with slippage as a cost of trading profitably, or random execution delays that could stop you from making profitable trades.
- Another important aspect of trading with an FCA broker is that if you have an issue with your broker, there is a method for mediation. If your broker does something you don’t think they should, you can file a complaint with the FCA, and the authority will investigate. This ensures that brokers are held accountable to their clients.
- Trading with an FCA broker also provides you with some protection in the case that your broker goes bankrupt. The FCA manages the Financial Services Protection Scheme, which covers retail trading accounts up to £85,000. So, if your FCA broker declares bankruptcy and is unable to restore your funds, the UK government will jump in and compensate you for the funds you would have lost anyway.
Best FCA regulated Brokers in the UK
Now that we’ve covered what the FCA is and why picking an FCA licensed broker is a good idea, here’s a brief rundown of some of the finest FCA regulated brokers in the UK.
This list gives you a quick overview of several platforms, allowing you to make more educated choices.
- eToro– 0% commission applies to stock and ETFs investment
- IG Markets– Low-cost transactions
- Fineco Bank– Best FCA Broker with no spreads
- Capital.com– Best FCA Broker for Beginners in the UK
- Plus500– Most cost-effective FCA-regulated broker
Now below is detailed information on our selected FCA regulated brokers.
eToro could be the broker for you if you’re seeking for an FCA-regulated broker with zero-commission stock trades and a functioning and easy-to-use platform, as well as a great copy trading option. Currently, our top FCA-regulated broker in the UK is eToro. This broker allows you to trade thousands of global equities, including over 800 different ones. CFDs can be used to trade stocks or you can buy stocks altogether for long-term investment. In addition, eToro offers CFD trading on over 40 FX pairs and dozens of commodities, as well as the option to buy 15 cryptocurrencies outright. eToro is also a leading ETF broker with a large variety of ETFs.
One of the unique features of eToro is that all CFD trading with this broker is completely commission-free. To trade, you simply pay a spread, which on eToro is often lower than the industry average. One can invest in stocks and exchange-traded funds (ETFs) without paying any fees. eToro does demand a £4 withdrawal charge, but considering that there are no monthly account charges, it’s simple to overlook.
eToro’s trading tools are also noteworthy. You’ll have access to a unique charting platform with over 100 technical studies and drawing tools, thanks to the broker. Furthermore, each stock on eToro is backed by in-depth analyst analysis to assist you in making informed trades. The web and mobile trading platforms of eToro are both available.
This broker offers a social trading network through which you may connect with millions of other investors from all around the world. You may trade ideas with other traders, follow shaped traders to see what they’re trading, and even replicate professional traders’ actions.
2. IG Markets
For semi-frequent traders, IG offers a superb share dealing experience with cheap U.K. commission rates and also no commissions on U.S. stocks. The massive worldwide broker has worked its way up to become one of the most well-known FCA brokers.
Because IG Markets is situated in the United Kingdom, it is an even better option for you. You can trade utilizing the company’s award-winning platform or third-party systems like MetaTrader 4 and L-2 Dealer.
The IG trading app is simple to use and has many of the same features as the main trading platform. Within the app, you may effortlessly move between share dealing, ISA, and SIPP accounts, as well as a link to a spread betting or CFD account.
In addition to the trading app, IG also has a standalone mobile app for its IG Academy instructional centre. The IG share trading interface features HTML5 charts, a variety of technical indicators and drawing tools, as well as good usability. The screening, technical analysis, and social/community research conducted by IG are all excellent.
All of these characteristics combine to make IG our top broker and an ideal choice for anyone looking for low-cost transactions in a SIPP or ISA account.
3. Fineco Bank
Fineco Bank has a lot to give, but one aspect that jumps out to us is their approach to stock trading. UK shares cost £2.95 each transaction, US shares cost $3.95 each trade, and European shares cost €3.95 each trade. There are no spreads to think about, and there are no account penalties for inactivity or other reasons.
This broker has over 10,000 shares to choose from, so you won’t be disappointed with the selection. There are approximately 1,000 ETFs, over 5,500 bonds, and thousands of stock alternatives to pick from. Fineco Bank also offers commission-free share CFD trading, though only for a small number of equities (about 850).
PowerDesk is a powerful trading tool offered by Fineco Bank. You may completely personalize the charting interface, use any of numerous technical indicators, and stay up to date on the market with a real-time news service. Fineco Bank also features an online stock screening tool, which we found to be really useful for finding new stocks to trade from all over the globe.
In addition to the FCA, Fineco Bank is governed by the Bank of Italy. It’s also a publicly traded firm on the Milan Stock Exchange, so investors keep a close eye on it and it issues regular financial reports. From 8 a.m. to 9 p.m., Monday through Friday, customer service is available by phone, email, and live chat.
Capital.com is a flexible FCA-regulated broker that appeals to both novice and experienced traders. Over 3,000 financial products, including thousands of worldwide equities and 142 FX pairs, are available for trading at the broker. CFDs are used for all trading, and Capital.com does not charge any commissions.
The fact that Capital.com’s trading interface is so user-friendly is one of the reasons we think it’s a good choice for beginner traders. You can quickly filter through this broker’s thousands of CFDs and store the ones you’re interested in into personalized watchlists. Furthermore, Capital.com provides a detailed report on the costs you’ll be charged when you place a trade, so you’ll never be left guessing how much a trade will cost you.
We also like the fact that Capital.com has a large online library of trading resources. You’ll find in-depth articles on the fundamentals of trading as well as daily market analyses to aid your study. Every few days, Capital.com also uploads films highlighting a popular asset or trend, which might help you come up with trade ideas.
Capital.com also integrates with TradingView for traders who desire more flexibility. This one-of-a-kind charting programme allows you to borrow technical indicators from other traders and analyze price movements with a selection of tools available from only a few brokers.
Capital.com is governed by the FCA as well as the Cyprus Securities and Exchange Commission (CySEC). As a result, there are always two pairs of eyes on this broker. Capital.com also provides customer service via phone, email, and live chat 24 hours a day, 7 days a week.
Plus500 is among the UK’s most cost-effective FCA-regulated CFD brokers. For FX trading, spreads start at only 0.6 pips, and for key stock indices like the S&P 500, spreads start at only 0.5 pips. There are no commissions on any trades, and there are no monthly account charges, deposit, or withdrawal charges.
This broker offers a diverse range of assets to trade, making it a smart choice if you want to develop a well-diversified portfolio. Plus500 offers moreover 2,000 stock CFDs, as well as 70 currency pairings, 25 commodities, and 26 indices.
Plus500 offers a user-friendly website & mobile trading platform that will appeal to a wide range of investors. It’s jam-packed with technical indicators and sketching tools, as well as an integrated news feed and an economic calendar, so you can remain on top of the market’s key happenings.
We also enjoy that the trading software provides a market sentiment score, which allows you to track how asset momentum shifts during the trading day. However, we discovered that price notifications are not connected between Plus500’s desktop, web, and mobile platforms, which is a significant flaw.
In addition to the FCA, Plus500 is regulated by a number of other top-tier financial watchdogs. CySEC and ASIC, as well as regulators in New Zealand, Israel, Singapore, and Seychelles, oversee this broker. Customer care is available by live chat and email 24 hours a day, 7 days a week.
How to Begin trading with an FCA Broker?
Are you ready to trade with an FCA broker? We’ll guide you through how to get started with eToro, a platform that offers a large range of assets, zero-commission trading, and extensive charting and research tools.
Step 1: Open an Account
To get started, go to eToro’s website and sign up for a new account by clicking ‘Join Now.’ You can establish an account using your email address or by logging in with Google or Facebook. Before new customers may start depositing and withdrawing money, the FCA asks them to authenticate their identification.
So, in order to get started with eToro, you’ll need to prove your identity. To complete this step online, simply submit a copy of your driver’s license or passport, as well as a copy of a recent bill that shows your residence.
Step 2: Fund Your Account
After that, you must fund your new account. A $50 minimum deposit is required by eToro, which can be made via a debit or credit card, bank transfer, PayPal, Neteller, or Skrill. Card and e-wallet transfers are quickly accessible for trading.
Step 3: Start Trading
You’re now ready to begin trading on eToro. Enter the name of a stock, FX pair, commodity, or any financial instrument offered by eToro from your account dashboard. To open a new order form, click ‘Trade.’
Enter the amount of money you want to trade in the order form. You can choose to use leverage on your trade depending on whether you’re buying an asset outright or trading CFDs. Then, if wanted, choose a stop loss and take profit price, and click ‘Open Position’ to start trading.
Finally, even though some of the most well-known FCA-licensed forex firms are headquartered abroad, the vast majority have been regulated by other organizations as well. As the trading business evolves, it will become increasingly important to cultivate a critical mindset in order to analyze a broker’s credibility before funding an investment.
All UK government trading regulations are followed by FCA-regulated brokers, and they are obligated to follow rules designed to safeguard retail traders. Because the FCA is one of the world’s most respected financial watchdogs, you can rely on an FCA broker.
Frequently Asked Questions
What are the top-tier financial regulatory agencies?
The FCA is largely regarded as one of the most important financial regulators in the world. Other top-tier regulators include FINRA in the United States, ASIC in Australia, CySEC in Cyprus, and FSA in the Seychelles.
Is it true that FCA-regulated brokers are more expensive?
Non-regulated brokers are not always more expensive than FCA brokers. Even if they aren’t, the added security that comes with using a regulated broker is well worth the money.
Is there a restriction on leverage for CFD trading set by the FCA?
Yes, the FCA limits the amount of leverage that retail CFD traders can employ. Forex has a 30:1 leverage, indices have a 20:1 leverage, most commodities have a 10:1 leverage, and equities have a 5:1 leverage.