UK Share Trading

Guide: Getting started

Investor protection

Brokers are regulated by the Securities and Future Authority (SFA) in the UK, which has become part of the City watchdog - the Financial Services Authority.

The SFA sets down strict guidelines for brokers and monitors their performance. Your broker should be SFA regulated.

The SFA is also the authority that you can use as an investor if you have a dispute with your broker. It offers an arbitration process for cases involving less than £50,000.

If your broker goes bust and you lose money you can make a claim on the Investors Compensation Scheme who will pay 100% of the first £30,000 of your claim and 90% of the next £20,000 to a total maximum of £48,000.

In the US the Securities Exchange Commission (SEC) performs a similar role to the SFA. The Securities Investor Protection Scheme protects and compensates customers registered with the SEC.

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