The Best UK Forex Brokers of 2020
Are you searching for the best forex brokers in the UK? You’ve come to the right place. At TopRatedForexBrokers, we help British traders to get most out of their forex careers by putting our industry knowledge to good use.
Our experts have reviewed over 200 forex brokers based in the UK to bring you a definitive list of the very best. That’s no mean feat either, as the UK is home to many exceptional, popular brokerage companies.
So why are UK forex brokers considered to be among the best in the world? It all comes down to reputable and strict regulation from the FCA. This means that when you trade with any of our selected UK forex brokers, your relationship with your broker will remain fair and transparent at all times.
On this page, you can also learn:
- How forex brokers are regulated in the UK
- What you should expect from the best UK forex brokers
- How to open a forex account with a UK broker
- How Brexit may affect UK forex traders
Our list of the best forex brokers in UK are:
- HF Markets
- AVA Trade
Best and most trusted forex brokers in the UK 2020
How we find the best UK forex brokers for you
As a British trader, finding the best forex broker in the UK can be a challenge, as there are so many licensed brokers to choose from. However, they don’t all provide the conditions you need to trade successfully.
The good news is that we’ve done the hard work for you. We’ve reviewed an extensive list of UK forex brokers and picked the best of the best. Each broker featured on this page has been carefully tested using our specific methodology to ensure accurate and objective evaluations.
Our process consists of assessing over 200 different criteria points across 10 vital categories. Our ten key categories include looking at the reputation of the brand, the trading instruments they offer, their customer service and their fees.
When reviewing UK forex brokers, we also consider country-specific aspects, such as:
- Regulation – A quality UK forex broker will be authorised by the Financial Conduct Authority or an equivalent European regulatory body. If a broker is not licensed correctly, they don’t make it on to our list of the best UK forex brokers.
- Account types – The best UK forex brokers will boast a variety of account types, suited to different types of traders. In particular, they will offer professional accounts which come with higher leverage limits.
- Quick and easy registration – By law, UK forex brokers are obligated to verify your identity, determine your funding sources, and assess your forex knowledge, before they offer you a live trading account. Our recommended brokers make this lengthy process as efficient as possible.
- Localised payment methods – When reviewing UK forex brokers, our experts give extra points to those who allow you to fund your account conveniently. This includes offering quick transfers from leading banks, such as HSBC, Barclays, NatWest and Lloyds, and accepting payments from popular e-wallet services like PayPal and Skrill.
- Attractive spreads – Our experts only ever recommend brokers with fair fees and spreads. For British traders, we look for brokers who offer competitive spreads on GBP currency pairs, as we know this is what you’re likely to be most interested in.
- UK focussed assets – All of our best UK forex brokers offer instruments that are important to British traders. This includes stocks from large UK companies, such as GlaxoSmithKline, Unilever and Vodafone, and indices such as the FTSE100.
How is the UK forex market regulated?
A UK forex broker will either be licensed by the Financial Conduct Authority of the UK (FCA) or by another EEA regulator, or both.
The Financial Conduct Authority replaced the Financial Services Authority in 2013. Its main role is to ensure that UK markets work efficiently for individuals, businesses, and the country’s economy as a whole. To do this, they check that all financial institutions are operating in an honest, effective, and fair manner.
The FCA is accountable to Her Majesty’s Treasury and works in conjunction with the Prudential Regulation Authority. The PRA belongs to the Bank of England and helps to develop professional standards designed to protect the markets. If a financial firm fails, the PRA works to limit the impact it has on taxpayers and financial markets.
Forex brokers registered with the FCA must:
- Have a minimum operating capital of £1,000,000
- Regularly submit financial statements and audit reports
- Be a member of the Financial Services Compensation Scheme (FSCS). The FSCS offers you compensation of up to £85.000, should your broker file for insolvency.
European Economic Area regulatory authorities
As a UK forex trader, you can also choose to trade with any broker who holds a licensed from an EEA member state. This includes brokers who are regulated by:
- Cyprus Securities and Exchange Commission (CySEC ) in Cyprus
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) in Germany
- Swiss Financial Market Supervisory Authority (FINMA) in Switzerland
- Finanstilsynet (FSA) in Denmark
- Autorité des Marchés Financiers (AMF) in France
- Comisión Nacional de Mercado de Valores (CNMV) in Spain
- Financial Market Authority (FMA) in Austria
- Comissão do Mercado de Valores Mobiliários (CMVM) in Portugal
- Malta Financial Services Authority (MFSA) in Malta
The European Securities and Markets Authority (ESMA)
UK forex brokers must also follow rules and regulations set by the European Securities and Markets Authority (ESMA). Some of these restrictions include:
- Regular retail accounts must only offer leverage of 30:1 for major currency pairs, 20:1 for all other currency pairs, and 2:1 for all cryptocurrencies
- All accounts must adhere to a 50% margin closeout rule
- All accounts must offer negative balance protection.
- Brokers must not offer trading bonuses to retail clients.
As you can see, forex trading in the UK is highly regulated. Whilst this may seem a little annoying, it means that when you trade with the best brokers in the UK, you’re completely protected at all times.
How to verify that a forex broker is licensed in the UK
The easiest way to choose a safe and regulated broker in the UK is to select one from the list on this page. All of the brokers featured here have outstanding reputations and licences from either the FCA or an EEA counterpart.
If you are considering another broker, however, you’ll first need to identify the broker’s registration number. This is a six-digit number that is displayed in the footer of the broker’s website. It will look something like this:
‘[Broker Name] is authorised and regulated by the Financial Conduct Authority (FCA) under the license no. XXXXXX.’
Once you have obtained this number, you can enter it into the FCA’s Financial Services Register. If the broker is legitimate, their details will appear. Here you can find the broker’s address, contact details, and current FCA status. A broker can either be:
- Authorised (currently registered with the FCA)
- EEA Authorised (currently registered with an EEA authority but not the FCA)
- Unauthorised (the broker is operating without the proper authorisation or is running a scam)
How to open an account with a UK forex broker
To open a live trading account with UK forex broker, you’ll need to provide personal details, such as your name, address, phone number, date of birth, and email. You’ll also need to supply your National Insurance number and confirm your tax residency status.
To meet FCA regulations, a UK forex broker will also ask you for employment details and test your forex knowledge. This helps to determine your suitability for trading.
- Employment details – Employment status, current salary, and occupation
- Funding information – Net worth, source of funds, estimated investment account
- Trading experience details – Past investment amount, estimated number of times you have traded, trading quiz answers (usually to do with leverage and risk management)
Once you’ve completed a registration form at one of our UK best forex brokers, you’ll also need to verify your identity. To do this, you’ll need to supply a copy of a government-issued form of ID, such as a passport or driver’s licence. For proof of address, you can submit one of the following documents:
- Utility bill
- Bank, credit, or debit card statement
- Council tax bill
- Local government address registration certificate
- Valid driver’s licence if it was issued less than six months ago.
Professional trading accounts may be offered to highly experienced traders who have significant investment capital. The draw of a professional account is they aren’t subject to the ESMA restrictions imposed on retail trading accounts, and so can offer leverage as high as 500:1.
To qualify as a professional trader, most UK forex brokers will require you to meet at least two of the following conditions:
- Have a financial portfolio of at least €500,000
- Have conducted at least 10 significant trades over the last year
- Work or have worked in the financial sector in a relevant position for at least one year.
UK forex brokers vs other forex brokers
Whilst our experts highly recommend the UK forex brokers listed on this page, we understand that you may want to know more about the perks and drawbacks of trading with them. Below we’ve listed the pros and cons of trading with a forex broker based in the UK.
The benefits of UK brokers
- UK forex brokers are heavily regulated by one of the strictest and most respected regulatory authorities in the world. With an FCA-regulated broker, you’ll never have to worry about scams or losing your money due to unfair practices.
- When you trade with a UK forex broker, your financial transactions and personal data are always protected. The FCA requires all brokers to employ safeguarding measures, such as operating with SSL technology and strict privacy policies.
- In the unlikely event that your UK forex broker becomes insolvent, you are protected. All UK forex brokers must be part of the FSCS, which means that your funds are insured, up to £85,000.
- Forex brokers in the UK offer localised payment methods. This makes depositing and withdrawing faster and cheaper for UK clients.
The limitations of UK brokers
- UK forex brokers are subject to ESMA restrictions, which means limitations on leverage, bonuses, and the instruments you can trade.
- The maximum leverage on major currency pairs is 30:1, 20:1 for other pairs., and 2:1 for cryptocurrencies.
- UK forex brokers aren’t permitted to offer their retail clients any trading bonuses or incentives.
How will Brexit affect UK forex brokers and traders?
Many UK forex traders are concerned about how Brexit will affect the British forex industry. As of January 31, 2020, the UK left the European Union. The country is now in a transition period and will be negotiating with the EU until December. During this period, most things won’t change as the UK will continue to be part of the EU customs union and the single market. Only once the transition period elapses, will it become clear what changes will happen in the UK forex market.
Below we’ve listed some of the most frequent questions we’re asked about Brexit, and how it will impact forex brokers and traders.
Will the best forex brokers leave the UK?
A major fear for British forex traders is that their favourite and most trusted brokerages will leave the UK and stop offering their services to UK citizens. This, however, looks unlikely.
Although there was some uncertainty about this back in 2016 when the referendum result was announced, according to the BIS Triennial Central Bank Survey of Foreign Exchange 2019, London’s dominance of the FX industry has grown in the past three years. London is responsible for 43% of the global forex turnover. This is much higher than any other country in the world, (the USA comes in second with a 16% share) and is 6% higher than it was back in 2016. What’s more, London remains in a convenient time zone for trading and boasts cutting-edge infrastructure.
In short, the answer is no. You shouldn’t worry about forex brokers leaving the UK any time soon.
Will broker regulation change in the UK?
One of the most appealing things about trading with the best UK forex brokers is that they are heavily regulated. Luckily, this won’t change. UK forex brokers are regulated by the FCA, a British institution. This means that all regulatory rules will remain the same and will continue to be imposed on forex brokers operating from within the UK.
Traders may, however, not have access to European regulated brokers. Currently, may forex brokers who are licensed elsewhere in Europe can provide their services to UK traders under the EEA agreement. This includes those licensed by CySEC, another regulatory heavyweight. When the UK leaves the EU, they’ll also leave the EEA and this cross-country agreement will be no more. It’s possible, however, that the FCA will negotiate special agreements with various EU member states to ensure UK brokers can operate in Europe and vice versa.