UK Forex Brokers Regulation

Regulation of forex brokers in the UK is undertaken by The Financial Service Authority (FSA) . FSA is an independent body , a single regulator of all providers of financial service in the United Kingdom.They have unique feature of UK forex brokers regulation is all forex account s that opened by UK forex brokers are required to be segregated. It means that if bankruptcy of the forex broker, the forex trader’s funds would be secured and brokers can not use clients funds to cover their own needs.

To gets license from FSA ,UK forex brokers have to obey and completed standard and requirements of FSA’s rules:

1. Make sure about bank quality which the client’s fund will be held. And continue to monitor the bank’s quality keep fulfill the FSA’s standards. SO the bank must be approved by FSA first.
2. Keep client funds separated from company funds, with other words segregated clients deposit from company asset.
3. Submit financial report to FSA on the regular basis and undergo detail annual audit

UK forex brokers have to comply all of FSA’s standard to get license, and monitoring it day by day to keep fulfill FSA’s standard.
And the most important rule that related to customers is all money that received from depositor are treated as “Client Money” under FSA client money rules. Wit this rule, they try to protect customers in the event of the failure of a FSA regulated company. How are this rule could protected the customers? If FSA regulated company fails to make financial obligations, a liquidator would not able to use client’s money to make claim of general creditors of the failed company. Client’s fund can only be used to pay out compensation to clients who held deposits with that company. Could you feel safety with this regulation?
FSA UK Website Address : http://www.fsa.gov.u