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

Oanda 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, indices, metals, share, commodities, cryptocurrencies. The broker supports various trading platforms and tools such as MT4, MT5, WebTrader, NinjaTrader, MotiveWave, MultiCharts, TradingView and more.

Oanda is highly regarded for its regulation by multiple authoritative bodies, including the ASIC, CFTC, IIROC, FCA, PFSA, MAS in Singapore, FSA in Japan, FSC in BVI. This multi-regulatory oversight underscores its commitment to maintaining high standards of safety and transparency.

In this article, we will explore Oanda’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 Oanda Operate Under FCA Regulation?

Yes, Oanda operates under FCA regulation. The FCA reference number of this firm is 921481. 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 Oanda 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, Oanda 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 Oanda, 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?

Oanda 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 Oanda. 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 Other Regulations Does Oanda Have?

ASIC :

Oanda 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.

CFTC:

Oanda is regulated by the Commodity Futures Trading Commission (CFTC) for its operations involving U.S. clients. The CFTC, established in 1974, is an independent U.S. government agency that regulates the futures and options markets.

The CFTC requires Oanda to adhere to strict standards for financial conduct, including maintaining sufficient capital, segregating client funds from company assets, and ensuring transparency in trading practices. The CFTC’s oversight helps protect U.S. investors by ensuring that brokers like Oanda operate with integrity and comply with regulatory requirements.

IIROC

Oanda is regulated by the Canadian Investment Regulatory Organization (CIRO). CIRO, formed in 2023 through the merger of IIROC (Investment Industry Regulatory Organization of Canada) and the MFDA (Mutual Fund Dealers Association), oversees all investment dealers and trading activity in Canada.

CIRO requires Oanda to meet strict standards for financial stability, transparency, and investor protection. This includes maintaining sufficient capital, safeguarding client funds by segregating them from company assets, and adhering to regular reporting and compliance checks. CIRO’s regulation ensures that Oanda operates securely and responsibly, providing a trusted trading environment for Canadian clients.

FCA:

Oanda is regulated by the Financial Conduct Authority (FCA) in the UK. The FCA, established in 2013, is responsible for regulating financial markets and firms in the United Kingdom.

The FCA requires Oanda to adhere to strict guidelines for financial conduct, including maintaining adequate capital, safeguarding client funds, and ensuring transparency in its operations. This includes keeping client money separate from company funds and providing regular financial reports. FCA regulation helps ensure that Oanda operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.

MAS in Singapore

Oanda is regulated by the Monetary Authority of Singapore (MAS). MAS, founded in 1970, is the government body responsible for overseeing financial institutions in Singapore, ensuring financial stability and investor protection.

Under MAS regulation, Oanda must follow strict rules, including maintaining enough capital, keeping client funds separate from company assets, and providing regular financial reports. MAS supervises forex trading and limits the maximum leverage to 1:20 to manage risk. Although there is no specific protection scheme, MAS’s oversight ensures that Oanda operates safely and transparently. For more details, you can visit their website: http://www.mas.gov.sg.

FSC in BVI:

Oanda is regulated by the Financial Services Commission (FSC) in the British Virgin Islands (BVI). The FSC, established in 2001, is the regulatory authority overseeing financial services and institutions in the BVI.

The FSC requires Oanda to comply with strict regulations, including maintaining adequate capital, protecting client funds by keeping them separate from company assets and ensuring transparent financial reporting. This regulation helps ensure that Oanda operates securely and reliably, providing a trustworthy trading environment for clients in the BVI and internationally.

PFSA

Oanda is regulated by the Polish Financial Supervision Authority (PFSA), which oversees financial markets and firms in Poland. The PFSA is responsible for ensuring the stability, transparency, and integrity of the financial system, providing a robust regulatory framework for the operation of financial institutions.

Under PFSA regulation, Oanda is required to comply with strict guidelines that include maintaining sufficient capital reserves, safeguarding client funds, and ensuring transparency in its operations. This regulation mandates the segregation of client funds from the company’s assets, enhancing the safety of client investments. By adhering to these standards, Oanda demonstrates its commitment to providing a secure trading environment, fostering trust and confidence among clients in Poland and throughout Europe. The oversight by the PFSA further reinforces Oanda’s dedication to operating with integrity and accountability in the dynamic forex market.

FSA in Japan,

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.

Frequently Asked Questions

What is Oanda?

Founded by Drs. Stumm and Olsen in the USA in 1996, Oanda is one of the oldest and most experienced forex brokers in the world. The broker expanded into Asia in 2007, opened its London office in 2011, and its Sydney office in 2014. On its platforms, you can trade over 3000 forex, CFDs, and even real stocks.

Is Oanda Considered Safe under FCA regulation?

Yes, Oanda is considered safe under FCA regulations. FCA is one of the top regulators in the UK and is recognized globally. The FCA offers key protections for retail clients, including a leverage cap of 30:1, segregated client funds, and negative balance protection, ensuring clients can’t lose more than their deposits. The 50% margin close-out rule adds further safety by automatically closing positions to limit losses. 

The FCA also ensures investor protection through the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 per eligible investor. For disputes, the Financial Ombudsman Service (FOS) provides free resolution services, ensuring transparency and safety under FCA supervision

Besides FCA, the broker is regulated by other major regulatory authorities, including the ASIC, CFTC, IIROC, FCA, PFSA, MAS in Singapore, FSA in Japan, FSC in BV. These regulations ensure strict compliance with industry standards and provide protection for client funds.

What is the Maximum Leverage of Oanda Under FCA regulation?

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

Here are the Oanda 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 Oanda Under FCA regulations?

The minimum deposit for Oanda is as low as $0. This low entry requirement makes it accessible for traders with low levels of capital.

Does Oanda Offer Negative Balance Protection?

Yes, Oanda 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 Oanda Offer an Investor Protection Scheme?

Yes, Oanda 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.