Financial Conduct Authority (FCA) Brokers 2024

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

The Best FCA Brokers

We have reviewed over 450 brokers as of February 2024 and have determined that these are the 4 best FCA brokers on the market:

#1 - Interactive Brokers

Why We Chose Interactive Brokers

Interactive Brokers (IBKR) is a premier brokerage for experienced traders, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

- DayTrading Review Team
  • Instruments: Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
  • Regulator: FCA, SEC, FINRA, CBI, CIRO, SFC, MAS, MNB
  • Platforms: Trader Workstation (TWS), Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
  • Min. Deposit: $0
  • Min. Trade: $100
  • Leverage: 1:50

Pros

  • IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
  • While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
  • There's a vast library of free or paid third-party research subscriptions catering to all types of traders.; plus, you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.

Cons

  • You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
  • Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
  • TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.

#2 - IG

Why We Chose IG

Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand-US offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

- DayTrading Review Team
  • Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
  • Regulator: FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA
  • Platforms: Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
  • Min. Deposit: $0
  • Min. Trade: 0.01 Lots
  • Leverage: 1:30 (Retail), 1:250 (Pro)

Pros

  • The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our Best Trading App award
  • The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
  • IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis

Cons

  • Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
  • IG has discontinued its swap-free account, reducing its appeal to Islamic traders
  • Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges

#3 - Kraken

Why We Chose Kraken

Kraken is a leading cryptocurrency exchange with a proprietary trading terminal and a list of 220+ tradeable crypto tokens. Up to 1:5 leverage is available with stable rollover fees on spot crypto trading and up to 1:50 on futures. The exchange also supports crypto staking and has an interactive NFT marketplace.

"Kraken will suit traders looking for a diverse list of cryptos including Bitcoin and a good security track record."

- DayTrading Review Team
  • Instruments: Cryptos
  • Regulator: FCA, FinCEN, FINTRAC, AUSTRAC, FSA
  • Platforms: AlgoTrader
  • Min. Deposit: $10
  • Min. Trade: Variable

Pros

  • Low minimum deposit of $10
  • Crypto staking
  • Low exchange fees on Kraken Pro

Cons

  • Does not support many newer altcoins
  • Low leverage on spot trading
  • Does not accept fiat deposits

#4 - Gemini

Why We Chose Gemini

Gemini is a crypto exchange offering 90+ cryptocurrencies, a native stablecoin and derivative trading via perpetual swaps. The two proprietary platforms will suit beginners and experienced traders, execution is fast with low slippage and fees are competitive.

"Gemini is a great platform for traders looking for a straightforward way to trade crypto derivatives in a secure environment."

- DayTrading Review Team
  • Instruments: Cryptos
  • Regulator: NYDFS, MAS, FCA
  • Platforms: AlgoTrader, TradingView
  • Min. Deposit: $0
  • Min. Trade: 0.00001 BTC

Pros

  • High security with 2FA a requirement for all crypto investors
  • Gemini has won various awards in recent years, including the 2019 Markets Choice Awards: Best Cryptocurrency Exchange
  • There is a wealth of education, guides and tutorials suitable for both beginners and novice investors

Cons

  • Some of the top coins by market cap are not available to buy through Gemini
  • Trading on margin is not supported
  • There is no practise profile or demo account for prospective traders

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.
FCA regulations

As their official website states, key objectives include:

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.

Structure

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.

History

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:

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.

Criticisms

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

Inaction

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”.

Personnel

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.

Price

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. Visit their website here.

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.