Forex brokers are those individuals or firms that help individual traders to trade in the international currency markets. A trader can thus partner with any broker from anywhere in the world to carry out forex trades. However, in this context, it is important for beginner traders that reside in the UK to be aware of certain important points. There are hundreds of brokers that operate in the market and the real challenge is to choose from among the best UK forex brokers that the trader can partner with.
As far as traders in the UK are concerned, it is important to choose a broker that has a local address and functions locally in the country. The Financial Conduct Authority (FCA) is the official regulatory body in the United Kingdom that oversees and regulates all types of financial transactions and trading including forex trading. This article helps traders to understand as to why it is necessary to choose FCA regulated UK forex brokers to succeed in online trading.
1. Unauthorised Broker Firms
There are many unauthorised brokers that operate in UK. Generally, even such brokers attach themselves to a prestigious business address in the country that fools most beginner traders. Some traders invest money in such firms. They are initially made to believe that they have winning trades and this invariably gets them to invest more money with the broker. After some time, all communications stop and it often happens that the trader is unable to establish any contact with the broker firm. In the first place, it is a good idea if the trader can enter into a contract after finding out whether the registration number of the broker is a genuine one from FCA. This prevents the traders from becoming a scam victim. If a trader is scammed, it is vital to understand that their financial loss will not be covered by the Ombudsman Service or FSCS.
2. FCA Regulated Forex Brokers Lead To Success
Any trader that partners with FCA regulated firms can be sure that their funds are safe and there will be no problem if sudden financial issues occur.This is because such brokers will be adequately capitalised and clients’ funds are maintained in separate accounts. In the long run, this means that there will be more favourable outcomes and therefore the trader will make more profits out of forex trading as a career.
3. Customers Are Important
As far as FCA regulated forex brokers are concerned, customers form an important part of their business and therefore they are treated with due respect. The lines of communication are open, the correspondence is regular and the needs of the customers are always met. ON the other hand, this is not true in the case of unregulated brokers. Almost always, the customers are not really important. The brokers are interested more in the customers’ funds and they enticed with unreal bonuses. Regulated brokers would work to keep their customers’ identities and personal information safe and secure unlike the unreal ones.
4. International Issues
Sometimes brokers reside outside the country and may avoid laws of one land and slip through loopholes of another. If traders partner with such rogue brokers without sufficient knowledge, a regulatory body such as FCA makes it easy for the trader by handing over relevant documents to the lawmakers. This is done to cause minimum damage to the funds of the traders. It also helps to trim down bureaucracy delays.
As far as FCA regulated forex brokers UK are concerned, they are bound to certain rules that have to be followed. Though it is not a rule that FCA regulated brokers would always legally conduct themselves, it is also true that FCA will initiate swift action against such erring brokers. For any FCA regulated broker, it is compulsory that they inform their clients clearly of accompanying terms and conditions when they partner with them. For a trader, working with an FCA regulated broker also means that they would have regular access to the best international currency rates, they would be in a position to view as well as compare more number of quotes speedily that would enable them to make a favourable trade decision. There would be no scope for the regulated broker to infuse any hidden fees that hikes up trading costs for the clients.