Most of you may already know that FCA announces newest rules regarding forex brokers periodically. As a regulatory body, the Financial Conduct Authority keeps reviewing the forex market and to protect the interest of general public it continuously plans and develop strategies to make forex brokers and other financial institutions well regularized. The FCA has the sole responsibility to work in line with all entities entrusted with the public money and to issue the license to operate within the UK. There broke a news that FCA is going to announce some changes concerning the rules and regulations of forex brokers in 2018, however, for some reason, it got delayed and the newest rules of FCA regarding forex brokers 2018 are yet to be announced.
About Financial Conduct Authority – FCA
The Financial Conduct Authority is a well reputed regulatory authority that oversees forex brokers and similar entities in the UK. Working in collaboration with the PRA (Prudential Regulatory Authority) and BOE (Bank of England) it ensures to maintain a healthy trading environment and safeguard the trader’s interest. The prevention of financial irregularities and malpractices is considered to be the core tenet of the regulatory body. Fraud, promotional campaigns instigating people to get into forex trading, malfeasance and other similar practices gets frowned upon by Financial Conduct Authority – FCA.
The Financial Conduct Authority – FCA takes every step necessary to protect traders from scam Forex brokers. The regulatory body bounds all regulated brokers to follow guidelines and rules of FCA in place including the requirement of maintaining client’s funds in segregated bank accounts. It further requires forex brokers to maintain a working capital of at least £1 according to the count of traders registered with them and their employed capital. Forex brokers need to comply with the rules of FCA in order to maintain good standing with the regulatory body.
Having said that, we now would like to let traders know how they can help themselves finding a regulated broker.
How Traders Can Locate a Regulated Broker?
If a broker is regulated in the UK that means it has an approval stamp of the FCA with it. FCA regulated brokers are categorized in the gold category of brokers around the world. The Financial Conduct Authority makes its all regulated brokers submit their financial statements on a periodic basis which are then interpreted to know investments holding and are then subjected to the annual audit as well. The FCA doesn’t tolerate submission of misleading financial statements by forex brokers, and in case some irregularities are found, the broker may end up having heavy penalties imposed followed by the cancellation of license to operate in the UK.
So whenever, you as a trader, need to check out whether a broker you are about to open an account with is regulated or not, you can cross check it by accessing the list of regulated forex brokers available on the official website of the FCA. At topbrokers.com we make sure to feature all FCA regulated brokers to ensure that our traders may not end up opening an account with a scam broker. We also make sure that as soon as the newest rules of FCA regulations regarding forex brokers are announced, we enlist them on our homepage so our stakeholders including traders and brokers may get to know the right course of action instantaneously.
How FCA Rules Can Limit The Risk Associated With Trading Currency Pairs?
The FCA acts as a watchdog agency and ensures that traders get the best deal from forex brokers. It keeps an eye on the leverages provided by different forex brokers and limits them up to a certain level in a way that FCA is able to control the maximum capital a trader can lose. The newest rules will undoubtedly bring more safeguards for the protection of traders’ investment. If some malpractice by a broker is reported to the regulatory body, the FCA ensure to investigate and take appropriate action as and when deemed necessary. Earlier, the brokers were offering crazy leverages to their customers such as 1:1000, the newest rules of FCA regarding forex brokers back in 2016 defined a capping of proposed leverage of (1:50) so traders may not lose more than what can be tolerable. Surely, high leverages lead to high loses and the newest rules of the FCA regarding forex brokers intend to bring the possible loss to a minimal level.
Regulations for Cryptocurrency Pairs
The FCA issued a warning in mid-2017 concerning the risk involved in trading cryptocurrencies. Due to the fact that the Forex market is highly volatile, the FCA intended to create awareness amongst traders to not invest the money in cryptocurrencies which they can’t afford to lose. The debate concerning the trading of cryptocurrencies and its possible implications is still going on and the UK parliamentarians are tasked to provide further guidance and suggestion concerning this matter.
2018 Updates & News
As mentioned earlier, newest rules of FCA regarding forex brokers are yet to be announced for 2018, therefore, people are requested to wait until the FCA releases some news. We will be continuously monitoring the latest development in this regard and will update you accordingly. You are advised to keep visiting our website topbrokers.com to remain updated about the newest rules of FCA regarding forex brokers.