United Kingdom: Is the Top Retail FX Hub Losing Its Charm?
- London is home to some of the top retail brokerage names.
- Brexit stopped FCA-licensed brokers from offering services in Europe and vice versa.

The United Kingdom is the largest foreign exchange (forex) market. It is true not only in terms of transactions but also for forex derivative products. The average daily forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Read this Term turnover in the country amounted to $3.65 trillion in 2019. It was 2.5 times more than the United States, which is the second largest forex market.
Despite several macro-economic setbacks, there is no sign of a slowdown in forex demand in the UK. A survey by the Bank for International Settlements (BIS) found that forex demand in London has gone up by around 30 percent in the three years since the Brexit vote.
While the institutional forex demand is soaring, the tiny retail trading
Retail Trading
In finance, retail trading refers to individual traders, trading through a broker, or on a platform. This can include novice traders and experienced traders. Trading and investing are divided into two categories, retail and institutional. Institutions include investment banks like JP Morgan or Citibank and global central banks like the US Federal Reserve and the European Central Bank. When we talk about retail trading however, we usually are referring to forex trading, but there are retail traders in every market ranging from commodities to stocks. The forex market is by far the largest and has the most retail traders. Retail foreign exchange trading is a small segment of the broader foreign exchange market where individuals speculate on the exchange rate between different currencies. In 2020 it is estimated that the forex market will exceed 7 billion dollars in daily activity. Retail Trading Sector Continues to GrowThe retail sector has developed with the advent of dedicated electronic trading platforms and the internet, which have allowed individuals to access the global currency markets. In 2016, it was reported that volume from retail foreign exchange trading represents 5.5% of the whole foreign exchange market or $385 million in daily trading turnover. Individual retail traders can access the same trades as central banks and online financial institutions. The retail forex trading industry is growing every day with the advent of trading platforms and their ease of accessibility on the internet.Retail traders rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most common of these are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer trading to forex, stocks, contracts-for-difference (CFDs), and other assets.
In finance, retail trading refers to individual traders, trading through a broker, or on a platform. This can include novice traders and experienced traders. Trading and investing are divided into two categories, retail and institutional. Institutions include investment banks like JP Morgan or Citibank and global central banks like the US Federal Reserve and the European Central Bank. When we talk about retail trading however, we usually are referring to forex trading, but there are retail traders in every market ranging from commodities to stocks. The forex market is by far the largest and has the most retail traders. Retail foreign exchange trading is a small segment of the broader foreign exchange market where individuals speculate on the exchange rate between different currencies. In 2020 it is estimated that the forex market will exceed 7 billion dollars in daily activity. Retail Trading Sector Continues to GrowThe retail sector has developed with the advent of dedicated electronic trading platforms and the internet, which have allowed individuals to access the global currency markets. In 2016, it was reported that volume from retail foreign exchange trading represents 5.5% of the whole foreign exchange market or $385 million in daily trading turnover. Individual retail traders can access the same trades as central banks and online financial institutions. The retail forex trading industry is growing every day with the advent of trading platforms and their ease of accessibility on the internet.Retail traders rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most common of these are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer trading to forex, stocks, contracts-for-difference (CFDs), and other assets.
Read this Term market has suffered a lot, especially with the impact of Brexit on the brokerage industry.
A Financial Services Hub
London is positioning itself as the financial services hub, but the stringent conditions of Brexit brought massive regulatory changes for the companies. Retail forex brokers, which have to obtain a license from the city’s Financial Conduct Authority (FCA), suffered the most as they were running European operations as well by passporting their UK license.
Europe-based brokers, which did not obtain an FCA license, also had to suspend their regular operations in the UK. But, the regulators in both jurisdictions allowed a temporary period to operate under some strict conditions to avoid any sudden disruption in their business.

“I believe that the City of London’s financial services took a large impact from Brexit as they were pretty much left out of the trade deal the UK and EU agreed in 2020. So in 2021, when the rules took effect, British operators took the hit straight away. That being said one of the areas that London is still dominant in is Foreign exchange and derivatives. And, the Mass exodus of companies that was predicted never materialized,” Ben Clark, Devexpert’s VP of Business Development, told Finance Magnates.
Forex CFDs
In the retail market, forex derivatives are traded with contracts for differences (CFDs) instruments. TIn addition, these speculative instruments are available for other asset classes, including equities and commodities.
According to data from Trading Authority, around 560,000 customers traded CFD products each month in 2020 only in the United Kingdom. It was a year-over-increase of 32 percent. Also, there were over a million funded CFDs trading accounts that year.
“The main reason is Covid has provoked volatility in the markets,” said Adrian Reading, Trading Authority’s Head of Research.
“CFD trading presents an opportunity to generate profits in both swings of the market. From the beginning of last year when many shares sunk 60-70 percent to the impressive recovery where growth shares and cryptocurrencies saw a surge of up to 6x, traders have been able to profit both ways.”
A Reputed License
There were around 110 different FCA-regulated CFD trading platforms in the United Kingdom in 2020. Also, the country houses some big industry names like IG and CMC Markets. Moreover, a few international brokers like Plus500 have listed their stocks on the London markets.
Additionally, Brokers preferred the UK to be their base due to the reputation of FCA too. The regulator keeps a keen eye on the operations of these trading platforms and keeps retail traders a priority.
“The FCA license has always been held in high regard due to the stringent checks to obtain the license,” Clark added.
But that perspective is changing. Now, brokers can only operate within the UK with an FCA license, but a European Economic Area regulatory approval can provide them access to a broader European market.
Also, regulators like the Cyprus Securities and Exchange Commission (CySEC) allow brokers to gain a license with much lower capital requirements. Many UK-based brokers are now also seeking European licenses.
“From my perspective new companies that I speak with form a cross section when it comes to the regulators, they are looking to gain. However, there are some reports available on the Internet that indicate that the UK: FCA is still one of the key global onshore CFD/Forex regulators,” said Clark.
Tarik Chebib, the Chief Revenue Officer at Capital.com said: “The UK has an established retail trading population, so there is still a lot of competition here from brokers vying for their business. Most brokers have remained in the UK and increased their European footprint with more licenses sought on the continent as they needed to find a way to [continue serving] their clients to a European entity.”
New brokers might be preferring some EU license now over the FCA one. But, no one can deny the credibility of an FCA approval on the business. Also, the retail forex and CFDs demand among UK investors will always keep the country as one of the most sought-after markets.
The United Kingdom is the largest foreign exchange (forex) market. It is true not only in terms of transactions but also for forex derivative products. The average daily forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Read this Term turnover in the country amounted to $3.65 trillion in 2019. It was 2.5 times more than the United States, which is the second largest forex market.
Despite several macro-economic setbacks, there is no sign of a slowdown in forex demand in the UK. A survey by the Bank for International Settlements (BIS) found that forex demand in London has gone up by around 30 percent in the three years since the Brexit vote.
While the institutional forex demand is soaring, the tiny retail trading
Retail Trading
In finance, retail trading refers to individual traders, trading through a broker, or on a platform. This can include novice traders and experienced traders. Trading and investing are divided into two categories, retail and institutional. Institutions include investment banks like JP Morgan or Citibank and global central banks like the US Federal Reserve and the European Central Bank. When we talk about retail trading however, we usually are referring to forex trading, but there are retail traders in every market ranging from commodities to stocks. The forex market is by far the largest and has the most retail traders. Retail foreign exchange trading is a small segment of the broader foreign exchange market where individuals speculate on the exchange rate between different currencies. In 2020 it is estimated that the forex market will exceed 7 billion dollars in daily activity. Retail Trading Sector Continues to GrowThe retail sector has developed with the advent of dedicated electronic trading platforms and the internet, which have allowed individuals to access the global currency markets. In 2016, it was reported that volume from retail foreign exchange trading represents 5.5% of the whole foreign exchange market or $385 million in daily trading turnover. Individual retail traders can access the same trades as central banks and online financial institutions. The retail forex trading industry is growing every day with the advent of trading platforms and their ease of accessibility on the internet.Retail traders rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most common of these are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer trading to forex, stocks, contracts-for-difference (CFDs), and other assets.
In finance, retail trading refers to individual traders, trading through a broker, or on a platform. This can include novice traders and experienced traders. Trading and investing are divided into two categories, retail and institutional. Institutions include investment banks like JP Morgan or Citibank and global central banks like the US Federal Reserve and the European Central Bank. When we talk about retail trading however, we usually are referring to forex trading, but there are retail traders in every market ranging from commodities to stocks. The forex market is by far the largest and has the most retail traders. Retail foreign exchange trading is a small segment of the broader foreign exchange market where individuals speculate on the exchange rate between different currencies. In 2020 it is estimated that the forex market will exceed 7 billion dollars in daily activity. Retail Trading Sector Continues to GrowThe retail sector has developed with the advent of dedicated electronic trading platforms and the internet, which have allowed individuals to access the global currency markets. In 2016, it was reported that volume from retail foreign exchange trading represents 5.5% of the whole foreign exchange market or $385 million in daily trading turnover. Individual retail traders can access the same trades as central banks and online financial institutions. The retail forex trading industry is growing every day with the advent of trading platforms and their ease of accessibility on the internet.Retail traders rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most common of these are MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer trading to forex, stocks, contracts-for-difference (CFDs), and other assets.
Read this Term market has suffered a lot, especially with the impact of Brexit on the brokerage industry.
A Financial Services Hub
London is positioning itself as the financial services hub, but the stringent conditions of Brexit brought massive regulatory changes for the companies. Retail forex brokers, which have to obtain a license from the city’s Financial Conduct Authority (FCA), suffered the most as they were running European operations as well by passporting their UK license.
Europe-based brokers, which did not obtain an FCA license, also had to suspend their regular operations in the UK. But, the regulators in both jurisdictions allowed a temporary period to operate under some strict conditions to avoid any sudden disruption in their business.

“I believe that the City of London’s financial services took a large impact from Brexit as they were pretty much left out of the trade deal the UK and EU agreed in 2020. So in 2021, when the rules took effect, British operators took the hit straight away. That being said one of the areas that London is still dominant in is Foreign exchange and derivatives. And, the Mass exodus of companies that was predicted never materialized,” Ben Clark, Devexpert’s VP of Business Development, told Finance Magnates.
Forex CFDs
In the retail market, forex derivatives are traded with contracts for differences (CFDs) instruments. TIn addition, these speculative instruments are available for other asset classes, including equities and commodities.
According to data from Trading Authority, around 560,000 customers traded CFD products each month in 2020 only in the United Kingdom. It was a year-over-increase of 32 percent. Also, there were over a million funded CFDs trading accounts that year.
“The main reason is Covid has provoked volatility in the markets,” said Adrian Reading, Trading Authority’s Head of Research.
“CFD trading presents an opportunity to generate profits in both swings of the market. From the beginning of last year when many shares sunk 60-70 percent to the impressive recovery where growth shares and cryptocurrencies saw a surge of up to 6x, traders have been able to profit both ways.”
A Reputed License
There were around 110 different FCA-regulated CFD trading platforms in the United Kingdom in 2020. Also, the country houses some big industry names like IG and CMC Markets. Moreover, a few international brokers like Plus500 have listed their stocks on the London markets.
Additionally, Brokers preferred the UK to be their base due to the reputation of FCA too. The regulator keeps a keen eye on the operations of these trading platforms and keeps retail traders a priority.
“The FCA license has always been held in high regard due to the stringent checks to obtain the license,” Clark added.
But that perspective is changing. Now, brokers can only operate within the UK with an FCA license, but a European Economic Area regulatory approval can provide them access to a broader European market.
Also, regulators like the Cyprus Securities and Exchange Commission (CySEC) allow brokers to gain a license with much lower capital requirements. Many UK-based brokers are now also seeking European licenses.
“From my perspective new companies that I speak with form a cross section when it comes to the regulators, they are looking to gain. However, there are some reports available on the Internet that indicate that the UK: FCA is still one of the key global onshore CFD/Forex regulators,” said Clark.
Tarik Chebib, the Chief Revenue Officer at Capital.com said: “The UK has an established retail trading population, so there is still a lot of competition here from brokers vying for their business. Most brokers have remained in the UK and increased their European footprint with more licenses sought on the continent as they needed to find a way to [continue serving] their clients to a European entity.”
New brokers might be preferring some EU license now over the FCA one. But, no one can deny the credibility of an FCA approval on the business. Also, the retail forex and CFDs demand among UK investors will always keep the country as one of the most sought-after markets.