ActivTrades FCA Regulation 2024: Supervision, Investor Protections, and More

ActivTrades is a leading forex and CFD broker that provides online trading services to traders and investors worldwide. It offers an extensive range of trading instruments, including Forex, shares, indices, cryptocurrencies, ETFs, commodities, and bonds. The broker supports various trading platforms and tools such as MT4, MT5, ActivTrader, and Tradingview.

ActivTrades is highly regarded for its regulation by multiple authoritative bodies, including the SCB, FCA, CMVM, BACEN, and CVM. This multi-regulatory oversight underscores its commitment to maintaining high standards of safety and transparency.

In this article, we will explore ActivTrades’s FCA regulation, its importance, the investor protection scheme, and negative balance protection. Additionally, we will provide information on other brokers regulated by the FCA. 

Does ActivTrades Operate Under FCA Regulation?

Yes, ActivTrades operates under FCA regulation. The FCA reference number of this firm is 434413. This regulation ensures that the broker adheres to the high standards set by the FCA, providing a layer of security and trust for its clients. Being FCA-regulated means that ActivTrades must follow strict guidelines to protect client funds, ensure transparency, and maintain the integrity of its operations.

What is FCA?

FCA stands for the Financial Conduct Authority. It is one of the top-tier regulators in the world, responsible for overseeing financial markets and firms in the United Kingdom. Established on April 1, 2013, the FCA took over from the Financial Services Authority (FSA). The FCA oversees approximately 42,000 businesses, including banks and investment firms. Its goal is to ensure that these firms, banks, and financial institutions operate fairly and transparently. The FCA enforces strict rules; for instance, it requires firms to keep client money in separate accounts. It also limits leverage to 30:1 for retail clients and provides negative balance protection.

Additionally, the FCA mandates a 50% margin close-out rule. It also offers dispute resolution through the Financial Ombudsman Service (FOS). Furthermore, the Financial Services Compensation Scheme (FSCS) provides compensation of up to GBP 85,000 if a firm fails. These measures help protect consumers and maintain trust in the financial system

How FCA Regulation Safeguards Retail Traders

Here are five key protections for retail traders under FCA regulation. As an FCA-regulated forex broker, ActivTrades offers these protections

1. Safety of Client Funds:

The FCA’s primary function is to protect consumers from unfair practices. This includes requiring brokers to hold client funds in segregated accounts, separate from their operating funds. This safeguard helps protect your money from potential misuse. By ensuring these accounts are compliant with strict regulations, your funds remain secure even if the broker faces financial difficulties.

2. Negative Balance Protection:

 The FCA mandates negative balance protection for retail clients, meaning you cannot lose more money than you have deposited. Additionally, the 50% margin close-out rule automatically closes your positions when your account balance falls below a certain level. This rule is designed to prevent significant negative balances, offering peace of mind while trading.

3. Strict Leverage Limits:

To help manage risk, the FCA enforces strict leverage limits of 30:1 for retail clients. This measure is particularly crucial in volatile markets, where high leverage can lead to substantial financial losses. By capping leverage, the FCA aims to reduce risk exposure and protect investors from excessive losses.

4. Stringent Reporting Requirements:

FCA-regulated brokers must adhere to rigorous reporting standards, providing regular updates on their operations. This includes client asset reports, transaction reporting, and market data reporting. Such transparency ensures that brokers operate fairly and honestly, giving you confidence in their practices.

5. Dispute Resolution and Compensation:

 In case of disputes with your broker, the Financial Ombudsman Service (FOS) serves as an independent body to resolve issues fairly and impartially. If a firm fails, the Financial Services Compensation Scheme (FSCS) offers protection of up to £85,000 per eligible investor, ensuring you are not left out of pocket. This compensation provides an additional layer of security for your investments.

How Can I Verify If My Broker is FCA Regulated?

To verify if your broker, such as ActivTrades, is regulated by the FCA, follow these steps:

1. Find the Broker’s Reference Number or Name: Obtain this information from the broker’s website.
2. Search the FCA Register: Visit the FCA Financial Services Register and enter the broker’s reference number or name.
3. Check the Broker’s Authorization: Ensure that the broker is authorized to provide “Rolling spot forex contract” services to retail customers in the UK.
4. Match Firm Details: Verify that the details on the FCA website, such as the broker’s website and email, match those provided by the broker. Any discrepancies might indicate an unauthorized broker, and you should avoid trading with them.

FCA-Regulated Forex Brokers: Who Else Is on the List?

ActivTrades is one of the leading FCA-regulated forex brokers. However, there are other FCA-regulated forex and CFD brokers that can serve as alternatives to ActivTrades. These alternatives include:

These brokers operate under FCA regulation. According to FCA rules, they offer leverage up to 30:1 and provide investor protection and negative balance protection for retail traders. To learn more about FCA-regulated forex brokers, you can read our content on the best FCA-regulated forex brokers.

What Regulations Does ActivTrades Have?

SCB (Securities Commission of The Bahamas):

ActivTrades is also regulated by SCB. Established in 1995, SCB  regulates and oversees the financial services industry. The SCB ensures that ActivTrades follows guidelines for maintaining adequate capital, protecting client assets, and ensuring transparent operations for clients from various regions, particularly those outside Europe and Australia.

CVM

ActivTrades is regulated by the Comissão de Valores Mobiliários (CVM). The CVM, established in 1976, is Brazil’s securities and exchange commission, responsible for regulating and supervising the securities and financial markets.

The CVM ensures that ActivTrades adheres to rigorous standards for transparency and security, particularly for clients in Brazil. This includes requirements for proper management of client funds, keeping them separate from the company’s assets, and maintaining regular financial reporting. CVM’s oversight helps protect investors and ensures that ActivTrades operates with integrity and trustworthiness in the Brazilian market.

CMVM

ActivTrades is regulated by the Comissão do Mercado de Valores Mobiliários (CMVM) in Portugal under license number 3991. Established in 1991, the CMVM is responsible for overseeing financial markets and firms in Portugal, ensuring they operate within a secure and transparent framework.

The CMVM mandates that ActivTrades comply with rigorous standards of financial conduct, including the maintenance of sufficient capital reserves, the protection of client funds, and the transparency of its operations. This involves keeping client funds in segregated accounts, separate from the company’s own assets, and adhering to strict reporting requirements.

Regulation by the CMVM provides an added layer of security for clients, as it ensures that ActivTrades operates with integrity and fairness. This oversight fosters a high level of trust among clients in Portugal and throughout Europe, ensuring that their interests are protected in the competitive forex trading environment.

BACEN

BACEN operates under the regulatory oversight of the Central Bank of Brazil (Banco Central do Brasil, BACEN), which is responsible for supervising financial markets and institutions in Brazil. BACEN, established in 1964, plays a key role in maintaining financial stability, ensuring that firms like BACEN comply with the necessary legal and financial requirements.

Under BACEN’s regulation, BACEN is required to meet stringent financial guidelines, including maintaining adequate capital reserves, segregating client funds, and ensuring transparency in its financial operations. These measures help protect clients’ funds and ensure that BACEN operates with integrity and in accordance with local regulations. BACEN’s oversight contributes to the reliability and security of BACEN’s services, reinforcing trust among clients in Brazil and across the region.

Frequently Asked Questions

What is ActivTrades?

ActivTrades is an online forex and CFD broker that offers MT4, MT5, and the ActivTrader proprietary web and mobile trading platforms. Alex Pusco founded ActivTrades as a stock brokerage in Switzerland in 2001. Later he moved to London in 2005. The broker added MetaTrader 4 in 2007. It also added CFDs on indices and commodities to its offer in 2008. ActivTrades offers over 45 currency pairs, Indexes, ETFs, as well as Commodities and Shares CFDs for your personal investment and trading options.

Is ActivTrades Considered Safe?

Yes, ActivTrades is considered safe. The broker is regulated by seven major regulatory authorities, including the SCB, FCA, CMVM, BACEN, and CVM. These regulations ensure strict compliance with industry standards and provide protection for client funds.

What is the Maximum Leverage for FCA in ActivTrades?

The maximum leverage offered by ActivTrades under FCA regulation is 30:1 for retail traders. However, leverage may vary based on the tradable assets.

Here are the ActivTrades leverage limits under FCA regulation:

• 30:1 for major currency pairs (e.g., GBP/USD, EUR/USD,)
• 20:1 for non-major currency pairs, gold, and major indices (e.g, S&P 500, Nasdaq 100 (US)
• 10:1 for commodities other than gold and non-major equity indices
• 5:1 for individual equities and other reference values

What is the Minimum Deposit for ActivTrades?

The Minimum Deposit on ActivTrades is $10. 

Does ActivTrades Offer Negative Balance Protection?

Yes, ActivTrades offers negative balance protection. All FCA-regulated brokers must offer negative balance protection. Negative balance protection means that traders are protected from losing more money than they have in their trading accounts. If a trade results in losses that exceed the amount of funds in the account, negative balance protection ensures that the trader’s balance cannot go below zero. This prevents the trader from owing the broker any additional money.

Does ActivTrades Offer an Investor Protection Scheme?

Yes, ActivTrades offers an investor protection scheme in accordance with FCA regulations. All brokers regulated by the FCA must provide this protection. In the event of a bank’s liquidation, losses would be distributed among clients based on the proportion of their funds held with the failed bank.

Any loss of funds resulting from this may be compensated under the Financial Services Compensation Scheme (FSCS). The FSCS provides compensation up to a strict limit of £85,000 per person, per institution, and this limit is subject to the total balances held with that institution.