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

AvaTrade is a forex and CFD broker offering online trading services to traders and investors worldwide. The broker provides a diverse range of trading instruments, including Forex, Metals, Commodities, Stocks, 

FX Options, Oil, ETFs, Crypto currencies, CFDs, Shares, Spread Betting, Indices, Bonds. It also supports multiple trading platforms and tools such as MT4, MT5, WebTrader, AvaOptions, AvaTradeGO, DupliTrade, Trading Central.

Although AvaTrade is regulated by several authoritative bodies, including ASIC, JFSA, FSA, FSCA, ADGM, CBI, ISA, KNF, IIROC, it is not regulated by the FCA (Financial Conduct Authority). In this article, we will explore AvaTrade’s regulatory framework, its features, and provide a list of alternative brokers that are regulated by the ASIC

Does AvaTrade Operate Under FCA?

No, AvaTrade does not operate under FCA (Financial Conduct Authority) regulations. The broker is regulated by several other reputable financial authorities, including ASIC, JFSA, FSA, FSCA, ADGM, CBI, ISA, KNF, IIROC. These regulatory bodies ensure compliance with various standards for financial stability, transparency, and investor protection, though they do not provide the specific protections offered by the FCA in the UK.

What Other Regulations Does AvaTrade Have?

ASIC :

AvaTrade is regulated by ASIC. Founded in July 1998, the Australian Securities & Investments Commission (ASIC) is Australia’s national corporate regulator, overseeing corporations, markets, and financial services in accordance with the Australian Securities and Investments Commission Act 2001. Being based in Australia, ASIC regulation ensures that the broker complies with Australian laws on financial services, including responsible conduct, risk management, and financial reporting. Client money is kept in segregated accounts, and there is an emphasis on risk disclosure and trader protection.

FSCA :

AvaTrade is regulated by the Financial Sector Conduct Authority (FSCA). The FSCA, which replaced the Financial Services Board (FSB) in 2018, is responsible for overseeing forex and CFD brokers in South Africa. As the primary regulator, the FSCA focuses on creating a transparent and reputable trading environment, aiming to protect investors from scams and fraud. While the FSCA is considered less restrictive compared to European regulators, it is recognized for its strong governance framework, offering traders in South Africa reliable oversight and protection.

FSASVG:

AvaTrade is also registered with the Financial Services Authority of St. Vincent and the Grenadines (FSASVG). The FSASVG acts as a registry authority rather than a strict financial regulator, overseeing the incorporation and administration of international business companies, including forex brokers. While it does not impose the same stringent regulatory standards as more established jurisdictions, registration with the FSASVG provides AvaTrade with the legal framework to operate globally. Traders should be aware that investor protection and oversight under FSASVG may be limited compared to more heavily regulated regions.

ADGM:

AvaTrade is regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). The ADGM, established in 2013, is an international financial center located in Abu Dhabi, United Arab Emirates.

The FSRA of ADGM oversees financial institutions to ensure they operate with high standards of integrity and transparency. For AvaTrade, this includes requirements for maintaining adequate capital, safeguarding client funds by keeping them separate from company assets, and providing clear financial reporting. This regulation helps ensure that AvaTrade offers secure and reliable services for clients in the ADGM and globally.

CBI:

AvaTrade is regulated by the Central Bank of Ireland (CBI). The CBI, which has been overseeing financial markets since 1943, is a government agency that ensures financial institutions in Ireland operate safely and fairly.

AvaTrade must follow strict rules set by the CBI. This includes keeping enough capital, separating client funds from company assets, and regularly updating its financial reports. The CBI also supervises forex trading and limits leverage to 1:25 to help manage risk. Plus, AvaTrade offers negative balance protection, meaning you won’t lose more than your account balance. For more details, you can check out their website: http://www.centralbank.ie.

ISA:

AvaTrade is regulated by the Israel Securities Authority (ISA). The ISA, founded in 1968, is a government agency that oversees financial markets and ensures investor protection in Israel.

The ISA requires AvaTrade to meet strict standards, including maintaining adequate capital, separating client funds from the company’s assets, and providing regular financial reports. Forex trading is supervised by the ISA, and the maximum leverage allowed is 1:100. Although there isn’t a specific protection scheme offered by the ISA, its regulations ensure that AvaTrade operates transparently and securely. For more information, visit their website: https://www.isa.gov.il/.

KNF:

AvaTrade is regulated by the Komisja Nadzoru Finansowego (KNF). The KNF, established in 2006, is Poland’s financial regulatory authority, responsible for overseeing the country’s financial markets and institutions.

The KNF ensures that AvaTrade adheres to strict guidelines for transparency, financial stability, and investor protection. This includes maintaining adequate capital reserves, segregating client funds from the company’s own, and providing regular financial reports. KNF regulation helps protect Polish investors and ensures that AvaTrade operates securely and in compliance with Polish financial regulations.

IIROC:

AvaTrade is regulated by the Investment Industry Regulatory Organization of Canada (IIROC) under its relevant license. IIROC, established in 2008, is a national self-regulatory organization responsible for overseeing investment dealers and trading activities in Canada’s debt and equity markets.

IIROC requires AvaTrade to comply with strict standards, including maintaining sufficient capital, segregating client funds from company assets, and providing transparent, regular financial reporting. IIROC’s regulation ensures that AvaTrade operates with integrity, offering a secure and transparent trading environment for clients in Canada, protecting investors, and ensuring market fairness.

JFSA

FSA regulation refers to the rules and oversight provided by the Financial Services Agency (FSA) of Japan. Established in 2000, the FSA supervises financial institutions including banks, insurance companies, and forex brokers to ensure the stability and fairness of Japan’s financial system. It works to protect investors and maintain confidence in the market.

Financial service providers, such as forex brokers, must be licensed by the FSA to operate in Japan. The FSA enforces strict standards on capital requirements, risk management, and transparency. It requires firms to segregate client funds to ensure their protection and implement robust measures to prevent financial misconduct. By enforcing these regulations, the FSA plays a key role in upholding market integrity and safeguarding investor interests.

Best FCA Regulated Forex Brokers: Alternatives to AvaTrade 

AvaTrade is one of the leading forex and CFD brokers. The broker is not regulated by ASIC. It is regulated by other top-tier regulators including ASIC, CySEC,  FSA, FSCA, SVG. There are several FCA regulated brokers that can serve as alternatives to AvaTrade. These brokers 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.

How Can I Verify If My Broker is FCA Regulated?

To verify if your broker, such as AvaTrade, 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.

Frequently Asked Questions ( FAQs)

What is AvaTrade?

AvaTrade is a global broker established in 2006. On its MetaTrader and proprietary platforms, you can trade over 1,000 forex, CFDs, and forex options. Social traders can trade via AvaSocial, DupliTrade, and ZuluTrade. AvaProtect, a market news feed, and Trading Central analyses are some of the tools available to traders.

Is AvaTrade Considered Safe?

Yes, AvaTrade is considered safe. The broker is regulated by multiple top-tier regulatory authorities, including JFSA, FSA, FSCA, ADGM, CBI, ISA, KNF, IIROC. It offers negative balance protection and holds client funds in segregated bank accounts. Additionally, AvaTrade provides an investor protection scheme for clients regulated under JFSA, FSA, FSCA, ADGM, CBI, ISA, KNF, IIROC, making it a reliable and trustworthy broker.

Does AvaTrade Offer Negative Balance Protection?

Yes, AvaTrade 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.

Is AvaTrade Regulated in the UK?

No, AvaTrade is not regulated in the UK. However, the broker accepts clients under its global entity, (AvaTrade LLC). AvaTrade is regulated by other top-tier authorities, such as ASIC, CySEC, and FSCA, ensuring a high standard of compliance and investor protection.

Does AvaTrade Offer an Investor Protection Scheme?

Yes, AvaTrade offers an investor protection scheme for clients under the JFSA, FSA, FSCA, ADGM, CBI, ISA, KNF, IIROC jurisdictions. This protection covers eligible investors in case of broker insolvency or other issues. ASIC-regulated clients benefit from stringent Australian financial laws, while CySEC offers protection in line with European Union regulations, ensuring added security for traders within these regions.

Is AvaTrade Regulated in the EU?

Yes, AvaTrade is regulated in the EU through its license with CySEC (the Cyprus Securities and Exchange Commission). Since CySEC is an EU regulator, AvaTrade follows the European Union’s strict standards, including client fund protection and transparency. It also complies with MiFID II regulations, ensuring a high level of oversight and security for European traders.