We've compared the 10+ ECN forex brokers for UK traders. You can check compare them based on leverage, spread, funding, regulation and pros & cons.
ECN Type Forex Brokers are more popular amongst experienced traders for a good reason. An ECN broker works with several different liquidity providers, which means that they can offer their services at a lower cost.
There is also no conflict of interest between the trader and the broker since the broker earns a commission and spreads regardless of whether the trader makes a profit or a loss.
Here is List of Best ECN Forex Brokers UK for 2022 based on our Research
There are a few ECN brokers that offer their services in the UK. Before choosing an ECN broker, you should make sure that they are regulated by the Financial Conduct Authority (or the FCA) of the UK.
This ensures that your money is safe and you can hold the broker accountable for any misdeeds. Also, this ensures the protection of your funds in case the broker goes out of business.
In this guide, we’ll cover the best ECN brokers operating in the UK today, how to verify a true ECN broker, and how to open an account with an ECN broker.
Regulation: Pepperstone is regulated by the FCA under the name ‘Pepperstone Limited’. The broker holds license number 684312. The company has held the license since 2015.
Additionally, Pepperstone is also regulated in Australia, Germany, Austria, Cyprus, United Arab Emirates, Kenya, and The Bahamas.
Pepperstone also provides negative balance protection and segregates traders’ funds from its own funds.
Hence, we consider Pepperstone to be a safe broker for UK residents.
Note: 75.8% of Retail Traders lose money when trading CFDs at Pepperstone.
Overall Fees: Pepperstone charges low overall fees, compared to other similar brokers.
For trading the benchmark EURUSD currency pair, the broker charges a commission of $7 (GBP4.59) Roundturn per trade per lot with a spread of 0.17 pips on average, while trading through their ECN Razer account.
If you are trading micro lots, then the Roundturn commission is higher at $0.08 per lot. This makes their overall fees for 1 Standard lot for EURUSD at $8.7 on average.
An added advantage is that Pepperstone does not charge any hidden or non-trading fees. They do not charge a deposit fee, withdrawal fee, inactivity fee, or account maintenance fee.
Trading Conditions: While trading with Pepperstone, users have the option of choosing between their Standard and Razer accounts. Both these types of accounts have different pricing structures and are suitable for different kinds of traders. The Razor Account is the ECN type account.
Pepperstone does not require a minimum deposit at the time of opening an account. This is another factor that goes in its favor.
The maximum leverage offered by Pepperstone to its traders from the UK is 1:30 for forex. This is the maximum amount of leverage allowed by the FCA for forex trading to retail traders. The max. leverage is lower for other CFDs. If you are looking to trade with higher leverage then you can open account as a Professional Trader.
Pepperstone offers a wide variety of trading instruments which includes 62 currency pairs, CFDs on 23 stock indices, 950 stock CFDs, and 25 commodity CFDs. The FCA does not allow Pepperstone to offer cryptocurrency trading to its UK-based traders.
Pepperstone offers the GBP as a base currency. Hence, UK traders do not have to convert their money into a different currency in order to make trades. This saves a significant amount of money in conversion fees. The other supported base currency options are USD, EUR & CHF.
Traders can deposit funds in their trading account through debit cards, credit cards, wire transfer, and PayPal.
Customer Support: Pepperstone offers customer support through live chat, phone call, and email. We found their responses to be fast and helpful.
Their customer support team is available at all times during weekdays. They are not available on weekends.
Regulation: A major drawback of IC Markets for UK traders is that they are not regulated by the FCA.
They are an Australian company and are regulated by the ASIC of Australia (which is a tier-1 financial authority), the CySEC of Cyprus, and the FSA of Seychelles. But IC Markets (EU) Ltd. has ‘temporary permission’ to accept UK clients as they are registered in EEA. The firm has a reference No. 827935 on FCA’s register..
The company is a private company and is not listed on any stock exchange. Hence, their financial information is also not publicly available.
We would still recommend IC Markets because of its long track record and its license from the ASIC of Australia which is a highly reputed financial regulator.
They also segregate their funds and provide negative balance protection.
Note: 74.32% of retail traders lose money when trading CFDs at IC Markets.
Overall Fees: IC Markets’ rate is quite reasonable when compared to other similar brokers.
When using their Raw MT4 trading account, IC Markets charges a commission of $3.5 per lot per trade per side and a spread of as low as 0 pips for trading the benchmark EURUSD currency pair. This makes their typical cost about the same as Pepperstone (another Australian CFD broker)
If you choose the cTrader account, then the commission per lot is lower at $3.0 per side. This makes a total of $6 per 100,000 units Roundturn. The spread is about the same, so the total cost is bit lower.
Further, similar to Pepperstone, IC Markets also does not charge any non-trading fees. Namely, they do not charge a deposit fee, withdrawal fee, inactivity fee, or account maintenance fee.
However, their overnight fee is higher than average.
Trading Conditions: IC Markets requires a minimum deposit of $200 at the time of account opening, which is very high.
They offer three different types of accounts that differ in terms of fee structure and available trading platform. Their account types are called True ECN for cTrader, True ECN for MetaTrader, and Standard account.
They do not charge a commission through their Standard account, however, the spread is much wider.
IC Markets offers a leverage of up to 1:30 to retail traders based in UK. You can register under their Pro Account if you want to trade with higher leverage, but you must understand the risks & it is not recommended.
While trading, you can choose from 61 forex pairs, CFDs on 25 indices, 1600 stock CFDs, 30 ETFs, 20 commodities, 9 bonds, and 10 cryptocurrencies. Since IC Markets is not regulated by the FCA, UK traders can gain exposure to the cryptocurrency market as well.
IC Markets offers the GBP as a base currency, which is an advantage for traders from the UK.
IC Markets has cTrader & MT4, MT5 platforms available for the traders in UK.
UK traders who want to deposit money into their trading account can do so through bank transfer, debit cards, credit cards, and payment wallets such as Neteller and Skrill.
Customer Support: IC Markets provides 24/7 customer support. You can reach their customer support team through live chat, phone calls, and email.
While they provide excellent service through phone and email, their live chat can use some more work. We experienced a significant time lag between our questions and their answers while using live chat.
IC Markets Pros
IC Markets Cons
Regulation: FXCM is regulated by the FCA under the name Forex Capital Markets Limited. The company holds license number 217689.
In addition, FXCM is also regulated by the ASIC of Australia, the CySEC of Cyprus, and the FSCA of South Africa.
Further, FXCM provides negative balance protection and does segregate its funds from traders’ funds.
Overall, we consider FXCM to be highly safe for traders from the UK thanks to its long reputation and solid regulation.
Overall Fees: FXCM charges average trading and non-trading fees, when compared with other brokers.
When trading the benchmark EURUSD currency pair, the broker charges a typical spread of 1.2 pips when trading through its Standard account (non ECN type account).
FXCM also charges a commission when trading through its Active Trader account, however, it charges a much tighter spread.
FXCM does not charge a deposit fee, withdrawal fee, or account maintenance fee. However, it does charge an inactivity fee of $50 if you’re inactive for a period of more than one year.
Trading Conditions: FXCM requires that traders deposit a minimum of 50 pounds at the time of opening an account with them. This is a fairly average minimum deposit requirement.
FXCM offers two types of accounts that differ in terms of fee structure. These account types are named Standard and Active Trader. The Standard account does not charge a commission but charges a wide spread. In contrast, the Active Trader account charges a commission with a tight spread.
For UK traders, FXCM offers maximum leverage of 1:30 in accordance with FCA rules.
FXCM offers a decent range of trading instruments that includes 45 currency pairs, CFDs on 15 stock indices, 219 stock CFDs, 12 commodity CFDs, and 1 bond CFD. Cryptocurrency CFDs are not available to traders from the UK.
FXCM offers the GBP as a base currency, hence, UK residents do not have to convert their money when trading with FXCM.
Further, traders from the UK can deposit money into their trading accounts through debit cards, credit cards, bank transfers, wire transfers, or through payment wallets such as Skrill and Neteller.
Customer Support: FXCM can be contacted at any time during weekdays. They offer customer support through phone calls, email, and live chat. As a UK resident, you do not have to pay for the phone calls you make to them (toll-free).
Regulation: FxPro is regulated by the FCA of the UK under the name FxPro UK Limited. The broker holds license number 509956.
Additionally, group companies of FxPro are regulated by the CySEC of Cyprus (License No. 078/07), the FSCA of South Africa (License No. 45052), and the SCB of The Bahamas (License No. SIA – F184).
FxPro also provides negative balance protection and segregates its funds.
FxPro is a reputable broker and we consider it to be safe for traders residing in the UK.
Overall Fees: The fees charged by FxPro are built into the spread.
The average spread for trading the benchmark EURUSD currency pair is 1.7 pips. The spread is slightly above average when compared to other brokers. It does not charge a commission.
FxPro does not charge any non-trading fees, except an inactivity fee. The inactivity fee is $15 after twelve months of inactivity.
Trading Conditions: FxPro requires a minimum deposit of $100 at the time of opening a trading account with it. $100 is an average minimum deposit requirement since there are some brokers that charge as high as $2000.
FxPro offers 6 different types of accounts. Each type of account differs in terms of fee structure, mode of execution, and trading platform available. The six different account types are FxPro Platform, MT4, MT4 Instant, MT4 Fixed, MT5, and cTrader.
The cTrader is the only account type that charges a commission, however, the spreads are significantly tighter.
FxPro offers a leverage of up to 1:30 to traders residing in the UK.
Through FxPro, you can trade a variety of instruments such as 70 currency pairs, 29 indices, 1700 stock CFDs, and 25 commodity CFDs. The range of instruments is quite low when compared to other brokers. They do not offer any bonds or ETFs.
Traders can use the GBP as the base currency of their trading account. Hence, traders from the UK do not have to convert their currency in order to start trading. You get to save on currency conversion fees.
Traders from the UK can deposit funds into their accounts using debit cards, credit cards, and local bank transfer. However, FxPro does not accept payment through payment wallets from UK residents.
Customer Support: You can contact FxPro at any time during weekdays, but not on weekends.
They can be reached through live chat, email, and by requesting a call back through their website.
We found their responses through live chat to be quick and helpful. It took around 3 minutes for us to connect with a customer support executive.
Regulation: FP Markets is not licensed or regulated by the FCA of the UK. This is a major drawback for traders residing in the UK.
However, FP Markets is licensed in Australia by the ASIC, in Cyprus by the CySEC, and in St. Vincent and Grenadines by the FSA.
FP Markets also follows safety practices such as negative balance protection and segregation of funds.
We consider FP Markets to be moderately safe for UK traders.
Overall Fees: FP Markets charges low trading and non-trading fees when compared to other brokers.
To trade the EURUSD currency pair, they charge a very tight typical spread of 0.1 pips and a commission of $3 per lot per side per trade. This is $6/lot for Roundturn. This pricing is applicable when trading through their ECN type Raw account.
FP Markets does not charge any deposit fee, withdrawal fee, inactivity fee, or account maintenance fee.
Trading Conditions: FP Markets requires a minimum deposit of AUD 100 if you are opening a Raw account. The fee/deposit for UK traders is the GBP equivalent of that amount.
FP Markets offers two different account types: Standard and Raw. The account types differ in terms of the available trading platforms & the fee structure. The Raw account is their ECN account.
The maximum leverage that can be used is 1:500. You can change the amount of leverage that you want to use. Since FP Markets is not regulated by the FCA, traders from the UK can use FP Markets to access high leverage which is disallowed by the FCA.
FP Markets offers a very high number of stock CFDs but their selection of other types of instruments is quite low. They offer more than 9,000 stock CFDs which is one of the highest among all other brokers. However, they only offer 61 currency pairs, 14 indices, 8 commodities, and 4 cryptocurrencies.
Since FP Markets is not regulated by the FCA, UK traders can use FP Markets to trade cryptocurrency CFDs.
FP Markets offers the GBP as a base currency, which is an advantage for traders based in the UK.
Traders from the UK can deposit funds using bank transfers, debit cards, credit cards, or certain wallets.
Customer Support: FP Markets can be contacted through live chat, phone call, or email.
Recently, customer support has been made available 24/7, which means you contact them on weekends as well.
The customer support that FP Markets offers is quite excellent, and we were pleasantly surprised when we contacted them through the live chat option on their website. We didn’t experience any hold time and our questions were answered almost instantly.
FP Markets Pros
FP Markets Cons
Regulation: Exinity Limited is the legal entity of the trading name FXTM that is regulated by the Financial Conduct Authority of the UK under license number 777911. FXTM is also regulated by the top-tier FSCA of South Africa under license number 46614 with the legal entity ForexTime Limited.
Fees: FXTM charges higher spreads compared to the average of spreads at other forex ECN brokers in the UK. The spreads with the Standard non-commission account start from 1.5 pips. However, the average typical spread for EUR/USD at FXTM is 2 pips.
The commission-based Advantage account type allows trading with spreads as low as 0.1 pips but at the expense of variable commission. The trading commission at FXTM with the Advantage account ranges from $0.4 to $2 for a single side based on the trading volume.
Trading Conditions: Deposits are free with all the accepted methods but withdrawals through credit/debit card will incur a commission of GBP 2 for each withdrawal.
FXTM allows trading with GBP as a base currency with MT4 as well as MT5 trading platforms. Clients can trade up to 1200 CFD instruments including 57 currency pairs at FXTM.
An ECN (electronic communication network) broker is different from a market-making broker. ECN brokers directly connect buyers and sellers in the market through third-party liquidity providers. However, in contrast, market-making brokers usually take the opposite side in trading themselves.
An ECN broker will not have a dealing desk, while a market-making broker will operate through a dealing desk. A dealing desk is a system through which the broker takes the opposite side of a trade themself or passes on the trade to a market maker.
The problem with market-making brokers is that they create a conflict of interest between themselves and their traders. They also charge wider spreads, when compared to ECN brokers.
There are several ways in which you can identify if a broker is an ECN broker or a market-maker.
You can contact their customer support team and ask them if they have a dealing desk. If they have a dealing desk, then they are a market-maker. If they do not have a dealing desk, then they are an ECN broker.
There are some brokers that provide both ECN and market-making services. In such cases, the broker’s website will usually provide the required information and guide you towards the account type which is ECN.
Other ways in which you identify whether a broker is ECN is by reading their client agreement or checking if they have placed restrictions on order placement.
CFD brokers in the UK allow traders to speculate on the price movements of various financial instruments. However, the order execution techniques can be different. There are three types of trade execution methods used by trading service providers in the UK.
STP or Straight Through Processing method is a trade execution method in which the orders placed by the clients are directly passed on to the liquidity providers. The brokers that use the STP method cannot take the opposite side of the trade and cannot intervene in a trading position opened by the client.
ECN or Electronic Communication Network is an automatic trade execution method in which an electronic trading system is used to automatically process the trade orders. There is no human involvement in an ECN execution method. There are no major differences between ECN and STP methods for trade execution.
Market Makers are the trading service providers in which the entity processes the trade orders themselves. A market maker matches the trade orders placed by the clients and can also take the opposite position of the trade order.
Suppose a trader places a buy order on 1 standard lot EUR/USD, a market maker can either match this order with another trader that places the sell order on 1 standard lot of EUR/USD. Or, the market maker can take the opposite side of the trade themselves. In this manner, if a trader makes losses, the market maker will earn revenue.
Market makers generally earn their revenue through spreads and commissions but can also make money by taking the opposite positions to the traders. Hence, a market maker earns more revenue than ECN/STP broker in general.
Opening an account with an ECN broker is an easy and quick process, usually.
There are certain universal steps that you need to follow in order to get it done as soon as possible. The selection of the broker is the most important step in starting CFD trading.
In this section, we’ll take the example of Pepperstone.
Step 1) Check whether the broker is regulated by the FCA: When you access Pepperstone’s UK website, you should read the footer of their homepage. The footer provides details of Pepperstone’s licenses and its authority to operate in the UK.
As you can see, they have provided their license number from the FCA of the UK.
You need to cross-check this license number on the FCA’s website. The FCA’s website will have a register that contains the names and numbers of all entities that are registered with them. All you need to do is enter the license number on their register, and it will show which entity that license number belongs to.
For example, this is what the FCA’s website has to say about Pepperstone.
Hence, you can be sure that Pepperstone is truly registered and licensed by the FCA.
Step 2) Once you’ve verified whether the broker is licensed by the FCA, the next step is to start the account opening process: There are four steps to doing this, which have been detailed in the screenshot below, as available on Pepperstone’s website.
Step 3) The most time-consuming step is to verify your identity: You should be able to complete this process online. You may need to upload certain government-issued IDs before you can start trading.
Step 4) The final step is to deposit money into your account: Once you’re done, you can download their trading platform and start trading!
Before opening an account with a broker, traders must also ensure several other factors apart from regulation.
The fees incurred by traders is a revenue for the brokers. Most traders select a broker only on the basis of spread as a lower spread means higher profits and lesser losses for the traders. However, brokers can earn revenues from traders in multiple ways.
The spreads do not depict whether the broker is a market maker or STP or ECN broker. It is quite possible that an ECN broker has a lower spread than a market maker or vice versa. In general, market makers charge narrower spreads as they can also earn revenue by taking the other side of the position opened by traders. Thus making revenues on losses booked by the traders.
Brokers and market makers also incur fees from traders through multiple methods like commission, overnight (swap) fee, account opening/maintenance, deposit/withdrawal, inactivity, currency conversion and other fees. Traders must completely enquire about fees and compare them with other brokers before opening their accounts.
|Broker Name||Typical EUR/USD Spread||Minimum Deposit||Max. Leverage|
Yes, ECN brokers are the preferred choice for many traders. This is because they charge lower fees and the broker does not have a conflict of interest with the trader.
You should ask their customer support team or seek reviews from experts. Usually, if a broker doesn’t have a dealing desk, then it is an ECN broker. A market maker might try not to disclose their execution method if they have a dealing desk.
Yes, there are many forex and CFD brokers in the UK that are 100% ECN or STP. However, only a few ECN brokers are regulated by FCA in the UK. Pepperstone, FXTM, etc are among the few ECN brokers with FCA regulation.
ECN brokers do not have a dealing desk and they cannot make money on losses of traders. ECN brokers make money solely through spreads and commissions incurred on each trade order.
According to our analysis and comparison, Pepperstone is the best ECN broker in the UK as it does not have a dealing desk and incurs a low spread with the availability of multiple trading platforms and excellent customer support.
Yes, there are a few forex and CFD brokers in the UK that follow 100% ECN method for trade execution. These brokers do not have a dealing desk and do not make profits on the losses made by clients.
Yes, ECN brokers do not make money on the losses made by traders on their trading platform. There is less probability that an ECN broker acts in self-interest to scam the traders. A market maker is very likely to indulge in activities of self interest.
For traders, ECN is a better option as ECN brokers do not have a dealing desk while the market makers have a dealing desk. In other words, a market maker can take another side of the trade and make profits on the losses incurred by traders. An ECN broker will earn money through spread regardless of the profits or losses booked by traders.
You should ask the broker for their Reference number, and then verify it on FCA’s public Register. Also, make sure to check the authorized website of the broker from FCA’s register, as it is possible that you are signing up under a fake/closed website if you are not careful.