Every forex broker should have a license from an official financial authority. Regulated brokers offer traders a higher level of security and protection.
First, regulated brokers are required to separate client funds from their operational funds (segregated accounts), so that in the event of broker bankruptcy, client funds remain safe. Regulations make brokers inevitably subject to strict supervision and audit.
Regulation also ensures that brokers operate transparently and ethically, and comply with the standards set by the relevant financial authorities. If a dispute occurs between a trader and a broker, regulations provide a framework for resolving the dispute fairly and transparently.
Regarding this, there are several of the largest financial authorities that are popular among forex traders worldwide. Simply put, if a broker has regulations from this authority, then it can be ensured that the level of security is good.
FCA (England) and ASIC (Australia) are the strictest financial institutions that regulate forex broker operations. Then, below it, there is CySEC, which is a financial institution located in Cyprus, Europe.
Of all the popular brokers in Indonesia currently, there are 7 foreign brokers that have regulations from these institutions:
- HF Markets: has 7 regulations from various world financial institutions
- Exness: the most popular FCA regulated forex broker in many countries
- FBS: ASIC and CySEC regulated forex broker offering Negative Balance Protection
- XM: offers thousands of euros in compensation in anticipation of scams and bankruptcy
- ThinkMarkets: ASIC broker providing millions of dollars in insurance to clients
- Admirals: displays its 7 regulations transparently
- Pepperstone: FCA and ASIC regulated
To get a more detailed explanation, please read the article below completely.
1. HF Markets
- Regulation: FCA (801701), CySEC (183/12), FSA Seychelles (SD015), IBC SVG (22747 IBC 2015), DFSA (F004885), FSCA (46632), CMA ( 155)
- Status: Regulated
- Year founded: 2010
- Segregated Accounts: Yes
- Minimum deposit: $0
HF Markets is very popular, especially among beginner traders. The reason is, that this multi-asset broker has complete and impressive educational material. There are many free webinars available in various languages besides English, such as Indonesian, Malay, Filipino, Thai, and Vietnamese.
As written above, this broker adheres to 3 well-known regulations, including FCA. Obtaining this regulation was not easy as the FCA is known for holding very high standards in terms of compliance and consumer protection.
To gain FCA regulation, a company must meet a strict set of requirements and must be able to prove that it complies with all the rules and regulations set by the authority.
Even though the rules are strict, trading conditions at HF Markets are very flexible because of its FSA regulations. This can be seen in the absence of a minimum deposit that you need to pay to start trading forex at HF Markets.
Apart from that, trading fees at this popular broker are also very affordable. Low spreads starting from 0.1 pips apply to the EUR/USD pair and a series of other major pairs. The leverage that traders can enjoy can also reach 1:2000.
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2. Exness
- Regulation: FCA (730729), CySEC (178/12), FSA Seychelles (SD025), FSC BVI (SIBA/L/20/1133), CBCS (0003LSI), FSCA (FSP 51024), ESMA (05/09/2012)
- Status: Regulated
- Year founded: 2008
- Segregated Accounts: Yes
- Minimum deposit: $10-$500
Exness is the most popular forex broker that has succeeded in attracting the hearts of Indonesian traders because of its fast and accurate execution. This broker with more than 15 years of experience has 6 regulations. Two of them are well-known world regulations, namely FCA and CySEC.
Exness implements the use of segregated accounts to ensure client funds are not mixed with broker operational funds. Exness also complies with the PCI DSS (Payment Card Industry Data Security Standard), a set of security standards set by the Payment Card Industry Security Standards Council (PCI SSC).
This standard was created to increase the security of card payment data and protect sensitive customer information processed during transactions using credit or debit cards. So, your card data will not be stolen or misused.
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3. FBS
- Regulation: ASIC (426359), CySEC (331/17), FSC Belize (000102/460), FSCA (50885)
- Status: Regulated
- Year founded: 2009
- Segregated Accounts: Yes
- Minimum deposit: $5
The next regulated broker is FBS, a popular forex broker with more than a decade of experience. FBS has a total of 4 regulations, namely from ASIC, CySEC, FSC, and FSCA. In the past, FBS was also regulated by the FCA, but now its status is no longer active.
As a form of protection for clients, FBS implements a segregated account system. Apart from that, this broker that has won many international awards also has a feature Negative Balance Protection, which is a feature that can protect traders from falling into a negative balance on their trading account. Typically, this can occur when market volatility is extreme due to a news release or a large price gap.
With the Negative Balance Protection feature, FBS will do various things, for example by automatically closing trading positions when available funds run low or when the risk of a negative balance is detected. FBS also offers a guarantee to protect traders from negative balance by removing excess losses from the account (compensation scheme).
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4. XM
- Regulation: ASIC (ACN 164 367 113 under the name Trading Point of Financial Instruments Pty Limited), CySEC (120/10), FSC Belize (000261/397), DFSA
- Status: Regulated
- Year founded: 2009
- Segregated Accounts: Yes
- Minimum deposit: $5
Not only in Australia where this broker originates, XM is also popular in more than 150 countries around the world. This broker, founded in 2009, is famous for its copy trading feature. Copy trading is a strategy that allows you to copy orders made by professional or experienced traders.
XM Broker has 4 regulations with 2 well-known regulations. Thanks to its CySEC regulations, XM clients can enjoy the Negative Balance Protection feature. So, you will not lose more money than the amount you deposited into XM.
Following regulatory rules, XM clients' funds are also protected up to €20,000 as a form of compensation from XM if they fail to provide secure services.
XM is also known for providing transparent services. All information regarding deposits, spreads, commissions, and other trading costs listed on the website is actual information. That way, XM traders will not have any "surprises" hidden costs when trading.
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5. ThinkMarkets
- Regulation: FCA (629628), ASIC (ACN 641 235 743), CySEC (215/13), FSA Seychelles (SD060), FSCA, CIMA, NZFMA
- Status: Regulated
- Year founded: 2010
- Segregated Accounts: Yes
- Minimum deposit: $0-$500
ThinkMarkets is an international forex broker that has been operating since 2010. Apart from London and Melbourne, this multi-asset broker also has several head offices spread across the world, including Asia Pacific, the Middle East, North Africa, Europe, and South America.
Having regulations from 3 trusted financial institutions in the world makes ThinkMarkets famous among traders. Thanks to strict regulations from the regulator, client deposits are guaranteed to be safe because they are separated from the broker's corporate funds.
As an additional form of protection, ThinkMarkets creates an insurance policy of $1,000,000 for each client if the company goes bankrupt.
Aside from security, ThinkMarkets is also famous because it offers flexible trading conditions. ThinkTrader application is also widely used by many forex traders. Unfortunately, the $0 minimum deposit does not apply to all ThinkMarkets trading accounts.
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6. Admirals
- Regulation: FCA (595450), ASIC (ABN 63 151 613 839), CySEC (201/1), FSCA (FSP51311), FSA Seychelles (SD073), JSC (57026), CMA (178)
- Status: Regulated
- Year founded: 2001
- Segregated Accounts: Yes
- Minimum deposit: $25
Regarding regulations, Admirals is the most transparent broker. The reason is, that they list all regulations, complete with regulation numbers, at the bottom of the homepage of their official website.
Admirals' decision to write all regulations at the bottom of its homepage makes it easier for clients to check regulations. So, clients just need to cross-check the regulator's website to perform validation.
The level of security at this two-decade-old broker is considered good because there are segregated accounts, Negative Balance Protection, and compensation schemes.
Under CySEC regulations, trader deposits at Admirals are protected by the Investor Compensation Fund (ICF). In EU Directive 2014/49/EU, the total protected deposits reach €20,000.
Apart from that, UK regulations also implement the Financial Services Compensation Scheme (FSCS) by the Client Assets Sourcebook (CASS) rules. The total client deposit protected by the CASS rules reaches a maximum of £85,000.
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7. Pepperstone
- Regulation: FCA (684312), ASIC (ACN 147 055 703), CySEC (388/20), CMA (128), DFSA (F004356), SCB (SIA-F217)
- Status: Regulated
- Year founded: 2010
- Segregated Accounts: Yes
- Minimum deposit: $0
Pepperstone is a forex broker from Australia that also has headquarters in the UK, Germany, Cyprus, UAE, Kenya, and the Bahamas. The popularity level of this broker providing swap-free accounts is quite high because the protection provided to clients is very good so there are certain limitations.
Pepperstone regulates this in accordance with its regulations. At Pepperstone's Kenya subsidiary, traders can enjoy Negative Balance Protection as well as a maximum leverage of 1:400.
In the Bahamas unit, Pepperstone traders get leverage of 1:200 without NBP. Meanwhile, Pepperstone Australia offers NBP, but without a compensation scheme, and leverage is limited to 1:30 only.
Maximum leverage of 1:30 is also applied in CySEC-licensed Pepperstone subsidiaries. However, this broker that is popular for its EA trading features offers a leverage maximum of 1:500 for professional traders only.
Pepperstone UK offers more flexible conditions. Maximum leverage is limited to 1:30, but there is an NBP and compensation scheme of £85,000 per client.
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Which is Best for Me?
Based on the explanation above, it can be concluded that HF Markets and Exness are regulated brokers the best you can choose.
HF Markets is subject to the notoriously strict FCA regulations but is still able to provide flexible trading conditions for its clients. Exness also has a good security system because it meets PCI DSS standards. However, the minimum deposit to open an account at Exness is higher than at HF Markets.
Even though it's not as low as HF Markets, FBS and XM still offer low minimum deposits so can be considered too. But, these two brokers do not have FCA regulations. However, they have an actual ASIC license which is almost as strict as the FCA.
ThinkMarkets, Admirals, and Pepperstonehas an equally strong position when viewed from its regulations because they both have the 3 safest regulations in the world (FCA, ASIC, and CySEC).
However, the minimum deposit at ThinkMarkets varies based on the type of account the trader chooses. The $0 deposit is only valid on Standard accounts, while Mini and ThinkZero accounts require a minimum deposit of $10 to $500.
Admirals do offer good security according to regulatory standards, but the minimum deposit is also high, reaching $25. Pepperstone is completely subject to and complies with regulations so the trading conditions offered are more limited.