The Evening Standard reported yesterday that the new boss of City Index (the second-largest spread betting company) has “slammed” the FCA for allowing Cyprus based and regulated brokers to compete for spread betting, CFD and Forex business in the UK.
The comments come after the acquisition of City Index by Gain Capital the NYSE listed broker that provides white-label spread bet services and operates an FX brokerage under the Forex.com brand.
Of the 90 firms on the FCA register that have permission to provide CFD and FX trading brokerage in London 54 do not have full regulation. Rather they are passported in via their Cypriot regulation.
But, what does this mean for City Index clients?
It means that of the 90 brokers to choose from UK clients are only properly protected by less than half of them. Being authorized and regulated by the FCA ensures that brokerages adhere to a stricter set of rules and clients are offered greater protection that just being registered.
Whilst UK clients can open an account with a Cypriot based broker, it makes much more sense to go with an established UK broker where funds are segregated and also protected by the FSCS.
You can compare all the FCA regulated Forex brokers here – plus if you’ve have a good or bad experience with your broker let other traders know by writing a review or giving them a rating.
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his work has appeared in titles such as the Guardian, Euromoney and many others.