FCA – Financial Conduct Authority

The Financial Conduct Authority (FCA) is responsible for regulating financial services in the UK, from banks to day trading brokers. This page will cover what a licence from the FCA means, as well as the trading benefits of registering with regulated brokerage firms. Along the way, we will also cover the group’s history, specific rules and regulations, plus key terms and current complaints.

FCA regulations

What is the FCA?

Operating independently from the UK Government, the FCA is one of the most prestigious regulatory bodies in the world. In fact, the regulations of the FCA help govern over 56,000 financial services firms.

As their official website states, key objectives include:

  • The supervision and enhancement of financial markets in the UK
  • Encouraging healthy competition within financial services in the interest of consumers
  • Using enforcement and investigation to ensure compliance with regulations aimed at treating customers fairly

These all fall under the overarching objective to ensure the functionality of financial markets within the UK. But while the definition and meanings may be simple, preventing market abuse and implementing new regulations can prove challenging, as will be shown below.

Note the agency has the authorisation to regulate both retail and wholesale financial services firms.


The FCA is a limited company by guarantee. The majority of its funding comes from charging fees to members of the finance industry. The amount regulated entities pay depends on the activities undertaken, the scale of those activities and the costs incurred by the FCA.

Note that the FCA must also keep in line with EU MiFID II regulations and guidelines. This means watch lists and regulated markets can change with notifications of new deadlines and outcomes from the EU framework. This can affect everything from short positions to commodity position limits.

See ESMA’s website for a summary of MiFID II regulations.

FCA Brokers

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Forex.com boast a global reputation. Regulated in the UK, US and Canada they offer a huge range of markets, not just forex, and offer very tight spreads and a cutting edge platform.
A trader with a Plus500 account can trade CFDs on underlying financial instruments such as Forex, Stocks, Commodities, Cryptocurrency, Options and Indices. With tight spreads and no commission, they are a leading global brand.
XTB is one of the largest stock exchange-listed FX & CFD brokers in the world, offering access to over 2000 instruments from two platforms: its own award-winning xStation 5 and the traditional MT4.
Axi is a global online FX and CFD trading company, trusted by 60,000+ ambitious customers in 100+ countries around the world.
72.6% of retail investor accounts lose money when trading CFDs with this provider
Markets.com offer CFDs across a huge range of assets from shares and indices to commodities and cryptocurrencies.
CMC Markets is headquartered in London and listed on the LSE. They offer competitive spreads on a global range of assets.
FXCM are an FCA regulated, London based broker. Companies under the FXCM umbrella are also regulated in Australia and South Africa.
ATFX are an award winning, UK regulated broker. Offering Forex and CFDs with competitive spreads and a customer service focus.
Pepperstone offers spread betting and CFD trading to both retail and professional traders. Clients can trade FX, indices and more on MT4, MT5 and cTrader platforms.
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.
Global brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features.
Trading 212 Offer a truly mobile trading experience. With tight spreads and a huge range of markets, they offer a dynamic and detailed trading environment.
Vantage FX are a Raw ECN Forex broker, regulated by ASIC is Australia. Boasting MT4, MT5 and Webtrader platforms, a range of account types and a deposit bonus of up to 50%
ThinkMarkets is a multi-regulated forex and CFD broker
Established spread betting, forex and CFD broker with over 30 years in the business. Regulated around the globe.
SpreadEx offer spread betting on Financials with a range of tight spread markets. Popular award winning, UK regulated broker.
IG-US offer spread betting, CFD and Forex trading across a range of markets. They are FCA regulated, boast a great trading app and have a 40 year track record of excellence.
Forex trading involves risk. Losses can exceed deposits
FXOpen is a highly regulated FX & CFD broker offering multiple trading platforms.
Ayondo offer trading across a huge range of markets and assets. They also offer negative balance protection and social trading.
Access global exchanges anytime, anywhere, and on any device. Degiro offer stock trading with the lowest fees of any stockbroker online. Degiro are not CFD brokers and do not offer CFDs
Investing involves risk of loss
Admiral Markets is leading Forex and CFD broker offering the MT4 & MT5 platforms
IronFX offers online trading in forex, stocks, futures, commodities and cryptocurrencies
Multi-Award winning broker. Specialising in Forex but also offering stocks and tight spreads on CFDs and Spread betting across a huge range of markets.
IB Boast a huge market share of global trading. With a minimum deposit of $10,000 however, they remain an option for larger traders only.
ETX Capital are a London based, FCA regulated broker offering tight spreads across a wide range of markets. They offer professional client services to Pro clients. ETX are offering a FREE trading course to new clients, and free guaranteed stops on the TraderPro platform.
Capital.com offer CFDs and Forex on a huge range of assets, with competitive spreads and unique platforms, including the fully functional mobile app.
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The FCA is a relatively new body that came to life on April 1st, 2013. Its predecessor was the Financial Services Authority (FSA). But when the Financial Services Act came into force, the FSA was abolished and a new regulatory structure was created, including the FCA.

There was then a merging of FCA/FSA legislation and regulations. Although the structure was to change, the approach to consumers and competition remained similar. In addition, the handbook, conduct rules and objectives all retained a likeness.

However, despite similarities, the Financial Services act brought in some significant changes to the scope of the FCA. This was to ensure the financial sector could better manage risk following the 2008 financial crisis.

A quick search online and you will see the FCA has made the news in recent years for several reasons. Firstly, because the body is particularly active and tougher than many similar regulatory agencies in Europe. In fact, the FCA has given out a number of substantial fines to forex brokers for price manipulations and acting without the interests of consumers in mind.

The regulatory agency has also made the news for attempting to implement checks and balances on binary options and cryptocurrency, such as Bitcoin. It has done this using 2017 and 2018 regulations, official warning lists and more.

Note in 2018 FCA headquarters were to move from Canary Wharf to Stratford, London. Having said that, they also have offices in locations such as Edinburgh, Scotland.

Responsibilities & Powers

So what powers and responsibilities do the FCA have? With ensuring the functionality of financial markets being such a broad objective, the body has extensive powers and duties.

Introducing forex regulations, principles for algorithmic trading businesses and blockchain companies could all fall under their remit. On top of that, ensuring data protection, removing financial promotions and protecting vulnerable customers all form part of the body’s role.

Specific examples of the latest and upcoming FCA regulations also include:

  • An ability to ban products for up to a year as it considers a lifetime ban
  • Implementing maximum leverage limits and ensuring appropriate risk warnings
  • Using the Financial Services Compensation Scheme to afford retail clients up to £30,000 if an FCA regulated forex broker goes bankrupt. Customers may also get 90% of the next £20,000. However, it cannot promise compensation on more than £50,000, which is still greater than EU bodies.

The FCA has a range of measures it can take when a broker breaches compliance regulations. This can include warning notices and new reporting requirements, all the way up to hefty fines and the banning of products. Unsurprisingly, it is the latter measures that often hit regulated brokers where it hurts most. This is perhaps why the regulatory agency gave out a staggering £229,515,303 in fines during 2017.

The FCA also has more middle ground powers, such as the temporary suspension of trading accounts. A power they used when Plus500’s less than stringent documentation requirements failed to protect against customer losses and prevent money laundering.


Despite a whole host of sales, lending, accounts, data security and client money regulations, the FCA still faces criticism.


In June of 2013, the Parliamentary Commission for Banking Standards said “The interest rate swap scandal has cost small businesses dearly. Many had no concept of the instrument they were being pressured to buy. This applies to embedded swaps as much as standalone products. The response by the FSA and FCA has been inadequate. If, as they claim, the regulators do not have the power to deal with these abuses, then it is for the Government and Parliament to ensure that the regulators have the powers they need to enable restitution to be made for this egregious mis-selling”.


There have also been complaints about the choice of personnel at the top of the FCA. For example, there were numerous calls for the resignation of the chairman John Griffith-Jones as he was responsible for HBOS audit when chairman at KPMG during the 2007-2008 financial crisis.

In addition, many were unhappy about the choice of chief executive, Martin Wheatley. This is because of his role in the minibond fiasco in Hong Kong. In fact, there were no pre-appointment hearings for either of these placements, so people were unable to officially disapprove.


There is an issue with fees. Obtaining an FCA license is relatively expensive compared to the likes of CySEC. As a result, many brokers pursue a CySEC licence so they can save money and meet lower entry requirements. What does it mean for consumers? Unfortunately, this results in less choice for consumers who want the extensive protections the FCA promises.

Lastly, it has also been said that the website and statutory regulations do not go far enough to ensure transparency and fair advertising.

FCA Responses

Despite the above, it’s worth noting the FCA has taken steps to address some of the issues above. For example, the regulatory body saw three new CEOs in the space of a year. It has also brought in new guidelines, listing rules and qualification requirements for brokers.

In addition, the regulatory body is making fewer exemptions and coming down hard on unauthorised firms. In fact, they publish public warnings and hold press releases to make consumers aware of fraudulent brokers and scams.

They have also sought to make it clear with what it stands for through its mission statement. At the same time, its employees are undertaking training to enforce effective banking and payment account rules, as well as transparency regulations.

So despite complaints on regulations, for the FCA to have achieved so much following the crisis of 2008 remains fairly impressive.

Final Thoughts

This page has given you an overview of FCA regulations and their meaning. One key point to take away is that the FCA is a benchmark in terms of regulations. This is particularly the case when compared to other bodies, such as Cyprus’s CySEC. In fact, as one of the oldest and most reputable regulatory agencies, a huge number of brokers pursue an application for an FCA license.

Note you can connect with the FCA via their helpline or website if you have any complaints. Also, before you sign up with a new broker, check they are qualified and regulated by the FCA. You can do this by running their license number through the official FCA website.