After reading horror stories about some brokers taking their clients for a ride I decided to go over regulation points scrupulously to understand what kind of protection they ensure for a retail trader.*
So, I’m about to deposit with broker called Hotforex and start trading but before I’d like to get answers on next three questions:
What are the differences between FCA regulated and FCA registered broker? Does FCA registered broker conforms the same rules as FCA regulated broker offering services to UK clients?
Can you follow this link*Financial Services Register answer is Hotforex FCA regulated or registered?*
Anybody trading with Hotforex from EU? What’s your feedback on them?
Well it’s really hard to say what is the exact the difference between REGULATED and REGISTERED:20:. I also stick to the opinion that in UK you won’t be permitted to render financial services if you don’t correspond their requirements. I’m not from UK but can say that Hotforex quite lives up to trading expectations even with CySEC regulation.
For some traders it can really be a deterrent factor especially for UK traders seeking a broker with full compliance with their Home Regulator. I think HF’s current FCA registration can be considered as full-fledged FCA regulation but still with some limitations and other subtleties which should be figured out getting in touch with FCA support.
Have you tried to contact FCA with your question? I think it could clear out a lot for you.
Good luck and let’s wait for experts feedback
So they are an FCA registered but not regulated? sounds like they would have to comply with FCA standards for them to be able to provide their services in the mentioned countries in this case the UK, while being under the CySec regulatory? honestly it still confuses me, but on a positive note its another set of conditions that the broker has to comply with let it be regulations or registration and in my opinion the FCA is not something to be neglected.
Exactly any broker registered by FCA should comply with it’s standards as FCA regulated broker. So basically there are no differences between them I guess.
Hotforex was only passported into UK regulation by being regulated somewhere else in the EU (in this case CySec). As a result, they are allowed to do business in all EU countries without being regulated by the respective local authorities.
Or how FCA puts it: “This firm is authorised or registered by its home state regulator (other regulator within the European Economic Area but outside the UK) and may be subject to limited regulation by the Financial Conduct Authority.”
The idea of passporting was to allow financial service providers to do business in all European countries without having to comply with the different regulatory requirements in all those countries.
As a side effect a broker can pick the cheapest available regulation and still do business in countries which have a stronger regulation. So even if HF does business in UK and other European countries they have only to comply with CySec rules and FCA and other regulators have no jurisdiction at all.
