FSA Regulated Forex Brokers

Forex trading is not regulated like an exchange. All forex trades are not centralized at an exchange but are rather counter party agreements. The forex market revolves around the interbank market. The largest financial institutions act as market makers and make bid and ask spreads for currency pairs. The different UK forex brokers that offer an individual trader access to forex market interact directly with the banks in interbank market as clients. The broker with the best credit with banks can offer competitive bid ask spreads to their clients.

When looking to open a forex trading account, it is important to research the broker. The broker should be FSA regulated. Read online reviews about the broker and do an online search for any legal actions against the broker. Carefully read all fine print and rules for opening an account. There may be some rules regarding withdrawal of money if you received a bonus. Discuss with broker to make sure you understand them. When opening a new account it is best to open a small account. Trade with little capital to test the service before depositing more funds.

Forex brokers in U.K. are regulated by FSA or Financial Services Authority. FSA regulates financial service firms and exchanges. FSA has set certain requirements that forex brokers are required to meet.

1. The banks in which client funds are kept must be regulated by FSA.
2. Keep client funds separate from company funds. Client funds can never be used by company, including in the event of insolvency.
3. Financial reports of company are to be submitted to FSA regularly.

Hence when opening an online forex trading account in U.K., it is important to check if it is an FSA regulated broker or not. The UK forex broker reviews can be helpful in this regard. In the event of bankruptcy, the funds you hold at the company are safe and cannot be used on behalf of broker. Should the broker go bankrupt, its clients can apply for cover by the Financial Services Compensation Scheme. Under this, Clients receive 100% of the first $30,000 plus 90% of the next $20,000, with maximum of $48,000.

There is a long list of FSA regulated brokers in U.K. You can also check to see if the broker you are interested in is regulated by FSA by checking FSA register or UK forex broker reviews.
Following is a list of just a few FSA regulated brokers in U.K.: Alpari UK, ICAP, IG Markets, City Index, MF Global UK, CMC Markets UK, Deltastock, RBS, Saxo Bank and UWC.
UK forex brokers who are FSA regulated will usually advertise this boldly at their websites.