Protection: Negative Balance Protection
The Financial Conduct Authority (FCA) in the UK is one of the most reputable regulatory watchdogs in the world for regulating forex brokers and other financial entities.
Forex traders would prefer to open trading accounts from FCA regulated forex brokers because of the watchdog’s stringent regulatory laws, protection of client funds and companies insolvency compensation rules etc.
After Brexit comes into force, FCA license is only available for UK traders, not for EU clients. Forex companies must get a EU passport if they want to reach EU clients.
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1. Safety of Client Funds：
FCA requires investment companies(including forex brokers) to open segregated accounts for their client funds; from this point, the client funds are protected.
The FCA handbook details are as follow
A firm, on receiving any client money, must promptly place this money into one or more accounts opened with any of the following:
(1) a central bank;
(2) a CRD credit institution;
(3) a bank authorised in a third country;
(4) a qualifying money market fund.
2. Requirement on Forex Brokers' Reports：
Annual accoounts and reports; Annual controllers reporting; Client asset reports; Client money and assets reporting; Market data reporting; Product sales data reporting; Remuneration data reporting; Reporting complaints; Transaction reporting.
Generally speaking, FCA-regulated broker profile will be found at the Financial Services Register page on FCA website. Try to find it and check if it will match the info from the broker website.
The detailed steps are as below:
1. Find the licensed/reference no.(preferred) or name of the forex broker, which you can get from the broker's website;
2. Enter the reference no. or name into the search bar on https://register.fca.org.uk/s/;
If you can't find the broker's profile on FCA wesbite, it's probably an unauthorised broker and please keep away of it.
3. And you'll get the broker's contents on FCA website. At this time you will click the 'What can this firm do in the UK?' and check if the broker has the authorization to provide 'Rolling spot forex contract' to 'Retail' customer;
4. If all the steps above have been done, don't forget to check the most important information: check if the firm details published on FCA website matches the ones you'll go to trade with, especially the website and email etc.
If no, please keep away the broker because it's probably an unauthorized firm and your money will fall in danger.
When you have disputes with a FCA-regulated broker, you can proceed the following ways:
1st way: The recommended way is to contact the broker directly and discuss with them to find a solution.
2nd way: If you're not satisfied with the broker's solution, try to contact FOS in UK, which aims at solving the disputes between the forex broker and the investor.
You can either send the complaint to the email: firstname.lastname@example.org or make an online complaint form and submit it.
Emailed Complaint Form: https://www.financial-ombudsman.org.uk/contact-us/forms
Online Complaint Form: https://help.financial-ombudsman.org.uk/help
3rd way: If the 2 ways above can't solve the dispute, the last way is to issue a case to the court in UK.
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