FCA

The Financial Conduct Authority regulates conduct across roughly 50,000 firms in the United Kingdom and shares prudential supervision of the largest with the Prudential Regulation Authority. For a retail trader an FCA authorisation is the strongest single signal available in this market, and it is worth understanding precisely what it buys.

What authorisation requires

An investment firm must hold capital under the Investment Firms Prudential Regime, appoint individuals to Senior Management Functions who are personally accountable under the Senior Managers and Certification Regime, and operate under the Consumer Duty introduced in 2023 — which obliges firms to deliver good outcomes rather than merely to disclose risks.

Client money sits under the CASS rulebook: segregated at approved banks, reconciled daily, covered by an annual client assets audit, and subject to a resolution pack the firm must keep current so an administrator can identify entitlements quickly.

Leverage and retail protections

The UK retained ESMA's product intervention measures after Brexit and made them permanent. Retail leverage is capped at 30:1 on major currency pairs, 20:1 on non-major pairs, gold and major indices, 10:1 on other commodities and non-major indices, 5:1 on individual equities and 2:1 on cryptocurrencies. Margin close-out at 50% of required margin is mandatory, negative balance protection applies per account, and marketing must carry a standardised warning stating the percentage of the firm's retail clients that lose money.

The FCA went further than ESMA on crypto: the sale of crypto derivatives to retail clients has been banned since January 2021.

If a broker fails

The Financial Services Compensation Scheme pays eligible claims up to £85,000 per person per firm where an authorised firm cannot return client money. Combined with CASS, that is the strongest retail protection on this site — and it is exactly what an offshore entity of the same brand does not provide.

Verifying a licence

The Financial Services Register lists every authorised firm, its permissions and its trading names, alongside a Warning List of unauthorised entities. Check three things: the firm reference number, that the permissions include dealing in investments as principal, and that the trading name you were marketed under is registered against that firm. Clone-firm fraud works precisely by quoting a genuine FRN alongside a lookalike domain, so compare the contact details on the register against the ones the site gives you.

Who an FCA broker suits

UK residents and anyone prioritising the return of their money over the size of their leverage. ProForexBrokers.com weighs an FCA authorisation above any offshore licence regardless of the trading conditions advertised alongside it — but only for the entity that actually holds the account, which for non-UK clients is frequently a different company.