Best Regulated Forex Brokers 2019
Forex is an incredibly large market, with trillions in trading volume made every year. While most trades are made online, this makes it especially important to have some form of protection and safeguarding to the users that will never meet the recipient of their hard earned funds. Regulatory authorities ensure that brokers are transparent, honest and protecting the best interests of the users. They also ensure that trades are managed in a fair way. Some of the major regulators in this industry include CySEC in Cyprus, FCA in the UK and ASIC in Australia. When a broker falls under the umbrella of any of these regulators, you as a trader can be rest assured your funds and privacy are being respected. They also offer an investor compensation scheme which protects your deposits up to a certain limit.
With so many regulated brokers available to choose from, how can you know who to work with? That is where we come in. We have conducted in depth research into the industry’s leading regulated brokers to come up with the best of the best. We consider product, the service and trading conditions. We also take into consideration the feedback from our users.
The brokers below represent the best Regulated brokers
|Broker||Rating||Official Site||Regulations||Min Deposit||Max Leverage||Trading Platforms||Foundation Year||Publicly Traded||Trading Desk Type||Currencies||Commodities||Indices||Stocks||Crypto||Commission on trades||Fixed spreads||offers promotions||Official Site|
By 42 User Reviews
BaFin, CNMV in Spain, CySEC, FCA, IFSC
MT4, xStation 5
By 5 User Reviews
IRESS, MT4, MT5
By 61 User Reviews
CySEC, DFSA, FCA, FSCA, SCB
cTrader, MT4, MT5, Proprietary
No dealing desk
By 18 User Reviews
ActivTrader, MT4, MT5
No dealing desk
By 14 User Reviews
By 46 User Reviews
76.4% of retail CFD accounts lose money
ASIC, CySEC, FCA, FSB, ISA, MAS
No dealing desk
76.4% of retail CFD accounts lose money
By 26 User Reviews
80.6% of retail CFD accounts lose money
CySEC, FSCA, VFSC
80.6% of retail CFD accounts lose money
Here’s a list of Best Regulated Brokers
XTB is an online brokerage company dealing in FX and CFD, more specifically they offer Forex, Indices, Commodities, Stock CFD’s, ETF CFD’s and even crypto trading. The company was established in 2002, though initially it was referred to as X-Trade.
XTB is regulated by 5 leading regulators and its members have an investment insurance cover:
FP Markets is the brokerage arm of First Prudential Markets Pty Ltd, an Australian firm which was established in 2005. In over 14 years of brokerage operations, FP Markets has grown to become a foremost online forex and CFD broker.
FP Markets is authorized and regulated by the Australian Securities and Investments Commission (ASIC). They operate with the Australian Financial Services License (AFSL) number 286354. ASIC is reputed for imposing stringent rules on brokers.
FxPro is a forex and CFDs broker that was established in 2006. To better serve its international clientele base, FxPro has established offices in major cities around the world. With its quality 24/5 customer support service, traders at FxPro can be assured that all their trading needs will be catered to by this broker. The broker offers both true ECN (non dealing desk) and dealing desk access a the trader prefers.
ActivTrades is an online forex and CFDs broker that was established in 2001. They were originally based in Switzerland but later relocated to London in 2005. The company is registered in England as well as Wales under the registration number #05367727. As a UK based financial services provider, they are authorized and regulated by the UK’s Financial Conduct Authority (FRN 434413).
Alpari has a rich history dating back to 1998. In 2014, Alpari relaunched as Alpari International which is the business name of Exinity Limited, a company that is regulated by the Financial Services Commission (FSC) of the Republic of Mauritius.
Alpari International is the business name of Exinity Ltd who is regulated by the Financial Services Commission (FSC) of the Republic of Mauritius.
Plus500 is a leading online forex and CFD provider. The company was founded in Israel in 2008. Today, it has regional offices in UK, Cyprus, Australia and Singapore. Plus500 offers over 2,500 trading instruments that can be traded on its platforms.
Plus500 has multiple regulations from different countries. These regulatory bodies impose stringent rules to ensure that investor funds are adequately protected. Regulation includes FCA, ASIC, CySEC and MAS.
FXPRIMUS is a Cyprus based Forex and CFDs broker that was established in 2013. FXPRIMUS is a fully regulated broker under the Cyprus Security Exchange Commission (CySEC). The broker offers online trading services for financial instruments such as spot forex, spot metals, equities, market indices and other types of CFDs. Today, FXPRIMUS serves clients in over 200 countries around the world.
What is a Forex Regulation?
The foreign exchange market or forex market is the largest example of a free market at work. It turns over on a daily basis more than 4 trillion dollars worth of transactions. However despite the amount of money that flows through the forex market, it is an OTC (Over the Counter) market and is unregulated. Trading in the forex market is decentralized and there is no central exchange that is specially geared towards the handling of forex transactions. Even with the decentralized and unregulated nature of the forex market, trading on an institutional basis poses no problems due to the fact that the parties involved such as banks trust each other.
However as forex trading becomes more accessible and popular among retail traders, the forex markets has started to become more prone to fraud. In order to curb fraudulent activities in the forex markets, many countries are beginning to regulate forex trading activities by requiring forex brokers to be regulated by regulatory agencies such as the UK’s Financial Conduct Authority and the National Futures Association in the U.S. Within their respective jurisdictions, these regulatory agencies act as the watchdog for traders dealing with forex brokers operating under their jurisdictions.
Why should you pick a regulated forex broker?
Given the fact that the forex market is decentralized and unregulated, you might be asking why you should only choose to work with regulated forex brokers. It is important to bear in mind that regulations exist in a market to ensure that the parties involved in a transaction conduct their business in a fair and ethical manner. By requiring forex brokers, banks, institutional investors and support industries to operate within a set of rules as defined by the forex regulatory agencies, traders and investors can have the confidence to invest in the forex market and this promotes the growth of the industry.
Normally as part of the regulatory process, a forex broker must be registered and licensed by the regulatory agency that is in charge of regulating forex trading activities in the country that they are operating in. Apart from the need to be licensed, regulated forex brokers are also required to submit regular audits in order to ensure that they meet the regulatory requirements and industry standard. For example, most forex regulatory agencies will require that the broker hold sufficient liquid capital that will enable them to execute and complete the forex contracts initiated by their clients. In addition, the broker must also be able to return all its clients’ money in the event it becomes insolvent.
Major Regulatory Bodies
Forex regulations differ from country to country. For each regulatory agency, they have their own specific regulatory requirements and their area of jurisdictions. Enforcement policies also vary from region to region. Normally for major financial centers such as London or New York, the regulatory agencies in charge are stricter in their enforcement of breaches of regulatory requirements due to the need to protect the reputational integrity of the financial industry for that region. Nevertheless, below are some of the major regulatory bodies which every forex trader should be aware about:
- Australia: Australian Securities and Investment Commission (ASIC)
- British Columbia Securities Commission
- Ontario Securities Commission
- Investment Industry Regulatory Organization of Canada (IIROC)
- Cyprus: Cyprus Securities Exchange Commission (CySEC)
- Denmark: Danish FSA
- France:Banque de France Autorité de Contrôle Prudentiel (ACP)
- Germany: Bundeszentrale für Finanzdienstleistungsaufsicht (Bafin)
- Hong Kong SAR: Securities and Futures Commission
- Indonesia: Badan Pengawas Perdagangan Berjangka Komoditi
- Italy: Commissione Nazionale per le Società e la Borsa
- Financial Services Agency,
- Japan Investor Protection Fund
- The Financial Futures Association of Japan
- Japan Securities Dealers Association
- Kanto Local Finance Bureau
- Russia: The Commission on Regulation of Financial Markets Participants Relationships
- Licensed clearing member of the Singapore Exchange
- Monetary Authority of Singapore
- Spain: Comisión Nacional del Mercado de Valores
- Sweden: Swedish Financial Supervisory Authority (Finansinspektionen)
- Groupement Suisse des Conseils en Gestion Indépendants
- Association Romande des intermediares financiers
- Swiss Federal Department of Finance
- Organisme d’autorégulation fondé par le GSCGI
- Commission fédérale des banques
- Swiss Financial Market Supervisory Authority (FINMA)
- Turkey: Capital Markets Board of Turkey (CMB)
- United Arab Emirates: Dubai Multi Commodities Centre
- United Kingdom: Financial Services Authority
- United States:
- Financial Industry Regulatory Authority, Inc.
- New York Stock Exchange
- Office of the Comptroller of the Currency
- Securities and Exchanges Commission
- Commodities and Futures Trading Commission
- National Futures Association
It should be noted that member states in the European Union (EU) share a common regulatory framework under the Markets in Financial Instruments Directive (MiFID) passed by the European Parliament. The objective of the directive was to harmonize the regulation of financial services providers operating within the European Economic Area (EEA). This means an EEA authorized forex broker will be able to “passport” its services legally to another member state through the authorization obtained from its home country. For example, a CySEC regulated forex broker is permitted to operate in the UK by “passporting” its CySEC license to the UK’s FCA.
How can regulations protect you?
Regulations play a huge role in protecting the traders/investors interest as they compel the financial service providers such as forex brokers to act in a fair and ethical manner.
- For example a major requirement of the regulator is for the segregation of funds. Brokers must maintain segregated accounts for their clients’ fund and their own operational funds in order to prevent possible abuse by the broker. In addition should a broker become bankrupt, its creditors are not allowed to tap into the broker’s clients fund as settlement of the broker’s debt.
- Another important regulatory requirement imposed by the regulatory agencies is the requirement that forex brokers warn their potential clients of the high risk involved in forex trading. This rule was put in place to forewarn traders that they face a possibility of losing all their investments due to the risks involved.
- Related to the above requirement is the need for brokers to categorize their clients as retail investors or professional investors. This is due to the fact that professional investors are regarded as experienced traders and are well versed with the risks involved in trading forex. As such, brokers have to take additional efforts to educate their retail clients of the nature of risks involved with forex trading.
- Another way which regulations protect retail traders is the leverage which forex brokers are permitted to offer to their clients. Forex brokers in the U.S are only permitted by the NFA to offer their clients a maximum of 1:50 leverage ratio.
- Regulators provide a level of protection to the investors by guaranteeing a certain amount of compensation should the broker become insolvent. For instance CySEC provides compensation to the tune of 20,000 EUR for deposits lost.
Guidelines to regulated brokers
As mentioned earlier, the regulatory requirements for forex brokers vary from region to region. Nevertheless, although the specific details of the regulatory requirements may vary from region to region, there are some commonalities with all the regulations imposed by the various regulatory agencies:
- Brokers are required to maintain sufficient liquidity to meet all contractual obligations.
- Brokers are required to maintain segregated accounts.
- Brokers are required to submit regular audits to verify their compliance on their capital adequacy ratio.
- Leverage ratios are capped to a certain limit.
There is no doubt that investors benefit from working with a regulated broker as opposed to an unregulated broker. To help investors verify the regulatory status of a broker, most regulatory agencies maintain an online database which investors can access in order to verify whether a broker is truly regulated by the specific agency.
We have researched deeply into the very best regulated brokers in the market and can save you the trouble of searching for yourself. Here is our list of the best-regulated Forex brokers in 2017, with a view to their reliability, technology, service standards and ancillary products.