The FCA (Financial Conduct Authority) in the UK is the official regulatory authority that regulates all different types of online financial trading methods including forex trading. At the same time for any forex brokers that wants to trade online, it is necessary to open an account with a forex broker or a brokerage firm.
In this context, for a forex trader in the United Kingdom, firstly, it is very important to choose a broker that functions locally in the country or has an official local address. A broker in the UK, at the same time, is free to partner with a broker from anywhere in the world to carry out online forex trading.
How Unauthorized Firms Operate
There are many UK based forex brokers that claim to be authorized by the FCA but are not. They often provide a prestigious address in the country, which may be false, initially give the trader information that their trading has been successful and thereafter try and get the trader to invest more. Soon the returns stop and no further contact can be established with the broker. It is a good idea to check out their registration number with the FCA by calling the FCA’s helpline number to avoid being scammed.
If a trader deals with an unauthorized broker, they will not be covered by the FSCS or the Ombudsman Service. It is therefore best to prevent such things from happening.
Why Should a Forex Trader Choose An FCA UK Regulated Broker
To succeed in online trading and for the sustainability of the forex business, it is important for the online forex trader to choose a broker that is regulated by the FCA. This helps to secure investments of the trader and helps to raise the bottom line f the business. This article details some of the reasons as to why a forex trader should choose to work with an FCA regulated broker for the best outcomes and to succeed in online trading.
Reason #1: FCA Regulated Brokers: Customer Needs Are Important
If forex traders partner with FCA regulated brokers, the following points can be expected out of them: firstly, the traders will be treated in a fair manner and with due respect, the broker will issue clear communication to the trader on all matters, and, for a regulated broker, meeting customer needs are above profits.
Whereas it is not an obligation for unregulated UK based forex brokers to act in the interest of the customers that they have, a majority of them would anyway provide poor customer service. Unregulated brokers are known not to return customer calls, they entice customers with unreal bonus offers, and, in rare cases, may even steal money from the customers’ bank accounts.
If traders work with FCA regulated brokers they can rest assured that the brokers will place customer needs ahead of their profits and protect customers’ personal information as if it was their own.
Reason #2: FCA Regulated Brokers: Handle Globalization Issues
In these days of globalization, it is easy for rogue brokers to avoid the law of one land and slip into another. FCA takes care of such issues and can hand over relevant documents directly to foreign regulatory bodies in such a manner that minimum damaged is caused to the traders’ investment capital if such issues arise where a broker is located overseas and also to get over bureaucracy delays.
Though sufficient information regarding rules and regulations may not be easily available in emerging markets, it is safer if the trader works with an FCA UK regulated broker.
Reason #3: FCA Regulated Brokers: Accountability
Brokers that are regulated by the FCA are bound to comply with specific rules and meet some basic standards to remain regulated. In this context, it is also important to note that being an FCA regulated broker does not mean that there is one hundred percent guarantee of legal conduct by the broker. However, in the event of a breaking of rules, swift action of FCA on the concerned broker is imminent.
According to FCA regulations, the trader should be informed of all the terms and conditions that come along with financial transactions, purchases and trades conducted by the broker.
In addition to all of these, working with an FCA regulated broker in most cases means the traders have access to the best international FX rates, they get the facility of being able to view and compare multiple quotes in the matter of a few seconds, the brokers have no hidden fees, and they secure payments to many countries worldwide.