What Makes Trading With Forex Brokers UK Attractive?
The United Kingdom has a long and celebrated history in the financial markets and is considered as a great contributor to the global economy. London is often termed as the financial capital of the world, mainly due to its geographic location and its proximity to different time zones. The UK session sees the maximum volumes in the Forex markets, and responsible for close to 50% of all currency transactions over the course of a trading day. Therefore, any grave consequences of the UK economy can have far-reaching effects on the global financial markets, which make it a significant contributor towards maintaining the integrity of the global economy.
The UK has several laws and regulatory guidelines that promote ease of doing business in the country and grants an incredible amount of freedom for investors to invest in any financial markets of their choice. The UK Government has legalized several financial products such as spread betting, CFD trading, and binary options trading, which come with a host of tax benefits. Spread betting is entirely exempt from any capital gain tax or stamp duties, which allow investors to enjoy 100% of their profits without any restrictions. The UK is also open to new and innovative financial products and does not limit the freedom of their traders by imposing any trading restrictions on leverage or trading strategies.
Apart from the unhindered access to capital markets, the UK authorities are also very severe in their investor protection laws, which have some of the most accomplished and extensive regulatory frameworks in the entire world. The UK has several customer protection laws and investor compensation schemes that are designed to protect their traders from any broker related issues and financial scams. Forex Brokers UK are highly preferred by traders from around the globe due to the incredible reliability and authenticity, which give priority to customers more than anything else.
The Legal Guidelines & Regulatory Framework For Forex Brokers In UK
The UK was initially a part of the European Union, but after the country’s much-publicized referendum (popularly known as the ‘Brexit’), the country has decided to exit the EU and forego all the benefits that come with it. The Brexit has created a tremendous amount of political and economic uncertainty in the Euro Zone and has sent all investors and market players reeling in its wake. Although the EU referendum was designed to gain complete independence from the EU membership, the UK authorities still work with all known European organizations for continued economic collaboration and investor welfare.
During its tenure under the EU membership, the UK played a vital role in creating different regulatory guidelines and policies that ensured the safe and secure performance of the financial markets. The UK was considered to be at the forefront of regulatory policies, which paved the way for the ECB and the European MiFID to enact several policies for safeguarding investor rights. Even after the exit from the EU, UK regulators still work with other leading regulatory organizations from the EU to create new policies and monitor the activities of financial firms to ensure that they adhere to all the regulatory policies established from time to time.
The UK has its own version of a regulatory organization, known as the Financial Conduct Authority (FCA), which is responsible for monitoring and supervising the activities of all financial companies operating in the UK. The FCA was primarily known as the Financial Services Authority (FSA) during the early years, but ever since the UK Government reformed its regulatory policies, the regulatory duties have been split up between the FCA and the Prudential Regulation Authority. The latter organization is responsible for regulating the banking sector and other macroeconomic policies, while the FCA has been assigned the job of regulating all financial entities operating in the financial markets.
All Forex brokers in UK are regulated by the FCA under a series of regulatory guidelines that are aimed at improving the overall reliability of the companies and their service offerings. Primary regulatory policies imposed on companies include larger minimum capital requirements for Forex brokers, routine auditing of all firms for transparency in financial transactions, protection of customer rights through investor compensation funds, security of client funds, and protecting investors against financial fraud and consumer abuse. The FCA also provides access to Financial Ombudsman services for resolving disputes between brokers and their customers, failing which all parties are free to approach the court for a resolution to a problem.
The UK has indeed the best regulatory environment that is mostly free from scams or fraudulent activities, which is in part due to the strict regulatory regime and the investor-oriented attitude of the FCA. The FCA makes sure to investigate all claims sent forward by traders, and is quick to address any malpractices by penalizing the concerned companies and revoking their licenses. FCA also prioritizes its policies to impart strict sanctions on any FX brokers that do not adhere to the regulatory guidelines of the FCA or the European MiFID derivatives.
- Licensed by CySEC, ASIC & FCA
- Min Deposit $5
- Offers different MT4 platforms
- Does not accept Paypal
- Does not offer EFTs
Discovering The Best UK Forex Brokers Online
The UK is an attractive destination for Forex brokers, with some of the industry’s best FX brokers being located in the heart of London’s financial district. Despite the British referendum, hundreds of companies are flocking to the region to set up a dedicated FX brokerage due to the core stability of the region, its regulatory policies, and a strong economy. Most of these retail UK Forex brokers offer their services through an online medium, which is considered to be a tried and tested platform for acquiring traders from all over the EU and across the world. Under the EEA agreement, which the UK still honors, FX brokers in UK have the necessary authorizations to offer its services to traders from any part of the EU, without setting up individual brokerages in other EU member countries. Conversely, Forex brokers from across the European Union are also given regulatory approval to offer their services to UK traders, provided they adhere to all European regulatory guidelines under the ECB and the MiFID derivatives.
Finding the top UK Forex brokers may not be as hard as one might assume, as it is easy to find a UK FX broker through online sources. The FCA website provides an excellent online database that lists all FCA regulated companies, which is an important tool that you should use while searching for your preferred UK Forex trading company. While searching for a top UK Forex broker, your top priority must be to choose a broker that has a verified physical address in the UK, which can be confirmed by the FCA website. Due to the global nature of the Forex market, it is natural for traders to witness a significant number of financial scams and fraudulent information that are designed to mislead traders. Unreliable brokers may often claim to be located at a particular geographic location, when in reality, they might be located in some tax haven that does not have any sound regulatory policies.
It is common for Forex brokers to claim that they are from the UK, but they might be domiciled in an entirely different country. Due to the popularity of virtual addresses and virtual office locations, brokers can make use of a virtual UK address, a UK phone number, and a UK postcode, which can seem like a valid address. Some brokers might also go to great extents by fabricating false regulatory status by claiming to be regulated by the FCA with a make-believe license number. In these instances, always cross-reference the regulatory licensing data with the official figures on the FCA website, which should be able to provide the best information about a company.
The FCA and other leading UK regulators release periodic newsletters and other news materials to inform and instruct traders about all the popular scams in the market. They also provide numerous educational resources to offer the best information online that can help traders to stay secure against the most common financial malpractices. If in doubt, always visit the official FCA website for information on a company that claims to be located in the UK and regulated by the FCA.
List of Top UK Forex Brokers For Safety of Your Investments
We have compiled a list of the top UK FX brokers in the market that are regulated by the FCA, and offer genuine FX products to its clients without endangering their investments in any manner. Our list of recommended UK Forex brokers should be able to provide you all financial products that are legally approved by the FCA.
Resolving Customer Issues With UK Forex Brokerages
The FCA has published various guidelines for brokers to take care of their consumer complaints, which make it easy for traders to contact the relevant authorities in case of any grievances. The top UK Forex brokers make it their priority to deal with all consumer issues in a diligent manner, while larger issues are dealt by the Financial Ombudsman, which acts as an arbitration service. Due to the extensive regulatory protocols that are prevalent in the UK, traders from Europe enjoy the best services that are relatively free from any financial malpractices.
On the other hand, international traders should also receive a high quality of service, albeit with reduced protection due to the limitation of the FCA and the European regulators in dealing with international clients. To prevent UK brokers from taking advantage of any overseas customers, the FCA seeks regular audit report of all financial transactions performed by the company, which can give a clear indication of all trader accounts and their trading capital.
However, if you are not satisfied with the services of a company, you can get in touch with the FCA and the Financial Ombudsman for arbitration. If all matters fail, you may approach the UK courts, which should be able to provide you with sufficient support for your claims, provided they are genuine.