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

XM 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, cryptocurrencies, stock CFDs turbo stocks, commodities, equity indices, thematic indices, precious metals, energies, shares. It also supports multiple trading platforms and tools such as MT4, MT5.

Although XM is regulated by several authoritative bodies, including ASIC, CySEC, DFSA, FSCA, FSC in Belize (Global), it is not regulated by the FCA (Financial Conduct Authority). In this article, we will explore XM’s regulatory framework, its features, and provide a list of alternative brokers that are regulated by the FCA

Does XM Operate Under FCA?

No, XM does not operate under FCA (Financial Conduct Authority) regulations. The broker is regulated by several other reputable financial authorities, including the ASIC, CySEC, DFSA, FSCA, FSC in Belize (Global). 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 XM Have?

ASIC :

XM 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.

CySEC :

XM is regulated by CySEC. Established in 2001, Cysec is Cyprus’s financial regulator. Since Cyprus joined the European Union in 2004, CySEC’s regulations align with the MiFID directive, ensuring compliance with EU-wide financial standards and investor protection. This regulation allows the broker to offer services across the European Economic Area (EEA) under the MiFID II directive, ensuring investor protection and transparency. CySEC regulation requires brokers to follow strict guidelines for handling client funds, including segregation and periodic reporting.

FSCA :

XM 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.

DFSA (Dubai Financial Services Authority):

XM is regulated by the DFSA. Established on 13 September 2004, DFSA is the regulatory body for financial services within the Dubai International Financial Centre (DIFC). It oversees a range of financial activities, including forex trading, and ensures compliance with its regulations through a framework of rules and guidelines. The DFSA provides a high standard of investor protection and requires firms to meet rigorous operational standards. For more details, you can visit the DFSA website.

FSC Belize (Global):

XM is regulated by the Financial Services Commission (FSC) of Belize. The FSC, established in 1999, is the government agency that oversees financial services in Belize.

XM must adhere to FSC regulations, including maintaining adequate capital, keeping client funds separate from its own, and providing regular financial updates. The FSC supervises forex trading to ensure transparency and security, although it does not specify a maximum leverage limit. For more details, you can visit their website: https://www.belizefsc.org.bz/.

Best FCA Regulated Forex Brokers: Alternatives to XM

XM is one of the leading forex and CFD brokers. The broker is not regulated by FCA. 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 XM. 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 XM, 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 XM?

XM is a multiple award-winning broker that allows its clients to trade forex, CFDs, and real stocks on its MetaTrader platforms. Founded in 2009, XM has over 1000 trading instruments and multiple account types which are designed for newbies, and experienced and professional traders. Trading tools are also provided to assist the traders with market analyses.  

Is XM Considered Safe?

Yes, XM is considered safe. The broker is regulated by multiple top-tier regulatory authorities, including ASIC, CySEC, DFSA, FSCA, FSC in Belize (Global). It offers negative balance protection and holds client funds in segregated bank accounts. Additionally, XM provides an investor protection scheme for clients regulated under ASIC, CySEC, DFSA, FSCA, FSC in Belize (Global), making it a reliable and trustworthy broker.

Does XM Offer Negative Balance Protection?

Yes, XM 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 XM Regulated in the UK?

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

Does XM Offer an Investor Protection Scheme?

Yes, XM offers an investor protection scheme for clients under the ASIC, CySEC, DFSA, FSCA, FSC in Belize (Global) 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 XM Regulated in the EU?

Yes, XM is regulated in the EU through its license with CySEC (the Cyprus Securities and Exchange Commission). Since CySEC is an EU regulator, XM 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.