The foreign exchange (forex) market runs 24/7, offers global currency pairs for trading, and is driven by geo-political developments, news, release of macro-economic data and related developments. On one hand, such a global market offers enormous trading opportunities, but on the other, it is challenging to protect individual traders from any financial irregularities. Thus, regulations were introduced through an established framework that ensures that financial intermediaries, like forex brokers, comply with the necessary rules to offer loss protection and controlled risk exposure to individual traders.
All US forex brokers (including the introducing brokers) must be registered with the National Futures Association (NFA), the self-regulating governing body that provides the regulatory framework to ensure transparency, integrity, abiding of regulatory responsibilities, and protection of various market participants. The NFA also offers an online verification system called Background Affiliation Status Information Center (BASIC), where forex brokerage firms can be verified for having necessary regulatory compliance and approval.
This article covers the list of top US-regulated forex brokers, with an aim to provide users an indicative list of regulated brokers (applicable at the time of writing this article). This list does not claim any particular order or ranking, and it is not comprehensive:
- FOREX.com: Owned by NYSE-listed parent company, GAIN Capital Holdings, Inc. (GCAP), FOREX.com offers many salient features like tight forex spreads, timely trade executions, a mobile trading platform, and numerous technical research indicators in 29 different languages. Forex.com trading offers integration across MetaTrader 4 or FOREXTrader PRO platforms.
- OANDA: OANDA is another popular broker offering competitive spreads with no commissions and deep market liquidity, along with its OANDA Marketplace which offers loads of features for forex traders such as forex tools, products, advanced analytical tools, forex news, training videos, and MT4 plugins from OANDA and associated partners.
- TradeKing Forex/Zecco: Zecco was recently taken over by TradeKing and offers tight spreads of 1-2 pips, dynamic trader network, and multiple forex trading platforms with research, analysis tools, and streaming news. Trading applications are compatible across smartphones and tablets.
- ATC BROKERS: STP Execution, No Dealing Desk, Scalping Allowed, Multiple Brackets Order, along other risk management tools like breakeven capability, custom trailing stop-loss, etc. enable ATC BROKERS to be one of the popular regulated brokers of US.
- thinkorswim: thinkorswim by TD Ameritrade, Inc. is another popular US-regulated forex broker, offering trading in more than 100 global currency pairs.
- Interactive Brokers: Another popular broker having global presence, Interactive Brokers claims to have low trading costs with high-level execution, global offerings, high-end trading technology, risk management tools, and trading tutorials.
- TradersChoiceFX: With over 20 years as a full-service introducing brokerage firm, TradersChoiceFX offers the rebate program by providing a cash bonus for each forex trade one makes. All trades are ultimately executed by their referring partners such as FXCM, FOREX.com, or CitiFX Pro.
- Beyond those listed above, there are numerous more regulated brokerage firms that traders can explore for trading forex: CMS Forex, FastBrokers, Fortress Capital, Inc., FXDirectDealer, LLC (or FXDD), Lightspeed Trading, TradeStation Securities, Inc., IBFX (part of the TradeStation Group, Inc.), etc.
The Bottom Line:
Regulations are a balancing act. Too little will lead to financial irregularities and inadequate protection to individual traders; too much will lead to a lack of competitiveness in global markets. One major challenge reported with US forex regulators is that leverage provided is limited to 50:1, while global brokers, outside of US regulations purview, provide up to 1000:1 leverage. Traders and investors need to take a cautious approach, ensuring security first.
Disclaimer: Information presented is as available at the time of writing this article, and may change in due course of time. The author does not hold any account with any of the mentioned brokers.