In this piece, we’ll review the top trading brokers in the UK and the basics of their regulation.

The foreign exchange market also referred to as forex or FX, is the world’s largest market with a daily trading volume of over $5 trillion a day. The size and ample liquidity of the foreign exchange market, as well as 24-hour trading five days a week, make it attractive for traders.

However, forex trading has no central exchange or clearing house, unlike stocks and commodities. The absence of transparency in the forex market has left it vulnerable to many instances of manipulation and malpractice. The Financial Conduct Authority (FCA) regulates forex trading UK and acts as a watchdog to guarantee fair and ethical business conduct in the United Kingdom’s financial market. Forex brokers regulated by the FCA must comply with some industry standards. The most important of these standards is the FCA requirement that companies keep customer funds separate from company funds. If the brokerage company becomes bankrupt, these segregated deposits cannot be used as company assets.

The January of 2015 event concerning the Swiss National Bank (SNB) emphasizes the significance of using an FCA regulated broker. Unexpected events sometimes called black swan events, can occur at any time and cause turmoil. The financial markets were tossed into chaos by the Swiss decision, and some forex brokerage firms suffered cruel losses with some filing for bankruptcy. Luckily for the clients of Alpari UK, the company was regulated by the FCA.

These ten FCA-regulated brokers are listed in no distinct order based on factors like execution quality, financial stability, and trading platforms available. In deciding which one to transact with among them, one might consider preferences like execution software, markets available, and the competitiveness of spreads.

OANDA: The Canadian-based brokerage firm offers competitive spreads, as low as 1.2 pips on EUR/USD pair. Oanda offers MetaTrader 4, alongside its proprietary fxTrade platform launched in 2001.

Interactive Brokers: Greenwich, Connecticut-based Interactive Brokers give direct access to interbank FX quotes and run on the ECN (Electronic Communication Network) market structure.

City Index: Founded in the United Kingdom in 1983, City Index provides forex trading, alongside spread betting and CFD’s. The MetaTrader 4 platform is available with enhanced functionalities and tools. A subsidiary of GAIN Capital (NYSE: GCAP), has been operating since 2001. The firm was one of the pioneers who brought currency markets to the retail trader.

FXCM: Exchange-listed FXCM offers an NDD (No Dealing Desk) model together with relatively competitive spreads. The company offers forex trading in a wide assortment of currencies including the Chinese yuan.

FxPro: London-based FXPro established in 2006 is an online brokerage firm providing retail forex trading and CFD’s. cTrader and MetaTrader 4 trading platforms are available.

IG Markets: IG Markets is a spread betting business established in 1974 under the name IG Index. The company offers trading in currency pairs such as EUR/USD, USD/JPY, and AUD/USD, with spreads as low as 0.8 pips.

IronFX: Iron FX is forex brand run by a Cyprus -based investment company IronFX Global Limited. The company is fully licenced to operate in the UK and offers above 200 different trading instruments.

Admiral Markets: Admiral Markets is an online forex broker with years of flawless service record. The company was established in 2001 and has since gained remarkable reputation as safe and trustworthy company. Admiral Markets was awarded with numerous recognition in different nominations.

FXOpen: FXOpen is a reputable Uk forex broker effectively offering ECN/STP environment, copy and social trading platforms and PAMM accounts to its customers. The company is known to be one of the first brokers to offer Islamic accounts services to adherents of sharia law.

The Bottom Line

Majority of the top-tier FCA-regulated forex brokers in the UK are based outside the country. In many instances, this implies that they are also regulated by other authorities such as the NFA (National Futures Association) in the US. While the retail forex business continues to grow and improve, traders must remain observant in scrutinizing where they place their money for investment.

By Ricardo Martinez

Ricardo Martinez has been active in the financial markets for around 10 years. In the early days in his career he was a trader and worked as market analyst in different online brokers advising clients on key decisions of trading instruments in foreign exchange and commodity markets. Ricardo is currently working as independent trader with diversified portfolio over different markets. His writing for LearnMarketonline is part of his commitment to share knowledge with traders.