Best FOREX Brokers in the UAE for 2022

Introduction

As more FOREX traders enter the trading market, FOREX brokers are in a scramble to improve their customer retention, thereby maintaining revenues and ensuring continued profitability. New traders are rightly worried about the risks involved in FOREX trading and are always ready to accept good advice on how to steer clear of questionable brokers. To support traders, we have created a list of the best FOREX companies in the UAE today. This list is the result of a detailed broker review process carried out by Arincen. We have gone one step further to include our research methodology so traders can grasp why we made the suggestions we did.

What is FOREX and Why Do We Need a Broker to Trade?

The FOREX market is the largest financial market in the world, at some six trillion dollars daily, only followed by the credit market. The market operates 24 hours a day and five days a week (Monday through Friday), except international holidays. Brokerage firms play a key role in this regard by enabling clients to buy and sell through a trading platform. This could be done either on a personal computer (PC) or by using a smartphone.

 

How Do I Choose the Best FOREX Broker in the UAE?

Regardless of where they are based, FOREX brokers must all reach a level of acceptable operating standards before you can begin to choose among them. First, a broker must be well regulated. This is in your own interest. Brokers that are regulated by top-tier watchdogs are compelled to protect your affairs, notably by offering you access to a compensation scheme in the event they go under.

Next, the broker must have a robust set of features, such as a powerful trading platform, deep access to markets, and fast execution. You can also ask the broker about their levels of liquidity as this is especially important in the FOREX market. From there, you should check for other important elements, like customer support, trader-friendly account deposit and withdrawal methods, and access to educational materials.

Naturally, in the case of UAE brokers, you will need to ensure that the broker allows for Sharia trading of FOREX through interest-free accounts.

FOREX Regulations in the UAE

It is legal to trade FOREX in the UAE, but the broker must be regulated by the required financial authorities. Interestingly, brokers setting up shop in the UAE have a choice between a few different regulatory bodies. Some choose to subscribe to all these bodies while others choose to concentrate on being regulated by one or two.

In the UAE, there are four main financial regulators. These are:

• The Dubai Financial Services Authority (DFSA).
• The Abu Dhabi Global Market (ADGM).
• The Securities Commission Authority (SCA).
• The Central Bank of UAE (CBUAE).

Most UAE-based brokers are regulated by the SCA, as it is the starting point for FOREX licensing. The SCA governs all non-banking financial activities and one of its major roles is to enhance capital markets in the region and stimulate economic growth. Importantly, some older brokers are still only regulated by the CBUAE, but according to recent legislation, they must transition to SCA regulation by July 2022.

Commissions and Fees in the UAE 

When choosing a Sharia-compliant broker, it helps to know that since interest cannot be charged on open orders overnight, brokers load their FOREX spreads to make up for this loss of revenue. This means that spreads are one of the best ways to compare which brokers are more cost-effective.

Commissions also come into play, but mainly on Electronic Communication Network (ECN) accounts. If you choose to trade on basic, no-commission Market Maker accounts, then you can save money on commissions, but if you have advanced execution speed requirements and need ECN trading facilities, then commissions become a factor.

Tradable Assets and Instruments

To keep on the right side of Sharia finance laws, traders must ensure they understand which tradable assets are halal (permitted), and which are haram (not permitted). Brokers in the UAE understand these distinctions and will create their service offering accordingly.

FOREX trading is halal under Sharia law, as the practice allows the trader to improve their personal financial situation, a key tenet of Islamic teachings. As we have mentioned, as long as the trader does not earn or pay interest, then FOREX trading is allowed.

Islamic traders can safely invest in other financial instruments, such as indices, commodities and shares. Regarding share trading, according to Islamic principles, it is permitted to buy shares in a company as long as it does not carry out haram activities, such as gambling and the brewing of alcohol.

Islamic traders cannot trade in bonds and treasury bills, as these financial instruments are created with the sole intention of allowing investors to make a profit from interest earned over time. Sharia-compliant brokers understand this and do not offer these instruments to Islamic traders.

Payments, Deposits and Withdrawals in the UAE

Islamic brokers understand that in order to remain competitive, matters relating to funding client accounts and withdrawing proceeds need not be unnecessarily complicated or slow.

As long as a financial transaction does not include interest, then there is no reason a broker may delay it. Therefore, deposits and withdrawals carried out with UAE-based brokers resemble those of brokers elsewhere in terms of speed and convenience. Of course, waiting times for deposits or withdrawals may be delayed by the banking system of the region, but this is no fault of the broker.

FOREX Trading Customer Service

As timing is key to FOREX trading, you must pick a brokerage firm that is able to provide good customer support around the clock. This most notable includes the company representatives being easy to reach, fast and polite, which will, in turn, spare you of having to worry about problems down the road.

Technical Aspects of the Broker’s Website

Brokers in the UAE must offer the same level of technical proficiency as any other broker in the world. This means that the broker’s Website must be visually appealing, easily navigable and highly functional. Orders must be processed as swiftly as possible with minimal lag that could cause slippage.

Brokers in the UAE can use the popular MetaTrader suite of tools or their own proprietary platforms. Whatever they choose, brokers operate in a highly competitive marketplace, where technical fundamentals are increasingly important as traders demand faster speeds and more advanced analysis tools.

Ask Other Traders on Our Network

Arincen’s Website features a powerful social network where traders can learn from each other in a supportive community. Every trader starts out as a novice, and it helps to be able to watch and study the trades of other more experienced investors. This important feature has allowed many a trader to make their learning curve less steep and expensive.

 

Trustworthiness and How to Verify SCA Authorization

How to Check If Your Broker Is Trustworthy 

At the get-go, it is important to learn more about regulatory bodies and their role in the FOREX market. These are government entities charged with regulating the sector. Their role is two-fold:

1. Observing and regulating the work environment in the FOREX market; and

2. Protecting investors and their funds.

FOREX firms must at least obtain one license from a relevant regulatory authority. Otherwise, they should be avoided at all times. In this context, we present the five most important FOREX market regulatory bodies from around the world.

1. The Financial Conduct Authority (FCA), UK;

2. The Swiss Financial Market Supervisory Authority (FINMA);

3. The Australian Securities and Investments Commission (ASIC);

4. The Financial Markets Authority, New Zealand; and

5. The National Futures Association (NFA), US.

While FOREX market regulatory bodies exist in almost every country, these are the most important five and also the most strict. To learn more about other regulatory bodies, please visit Arincen.com, where you will find a comprehensive global database.

How to Verify that Your Broker Has SCA Authorization

While the SCA does not provide a list of authorized FOREX brokers, residents and others can contact the CBR directly to verify authorization.

In this introduction, we took a look at the best FOREX brokers in the UAE. We began by identifying the best five FOREX brokers in the country, listing and ranking them by their Arincen Trustscore. We then briefly described the regulatory environment governing these companies (more on this later in the article). Finally, we advised readers how they should go about ensuring that the broker into which they are looking is licensed by a tier-1 regulator, such as the FCA, and, therefore, deemed trustworthy.

FOREX Trading Scams and How to Avoid Them 

Many online trading scams involve fake online trading platforms that offer attractive, not-to-be-missed trading promotions and packages. Often, these deals are too good to be true, and this is proven when traders invest money and the Website administrators disappear with their funds.

The best way to avoid being scammed is to check that the broker you are using is regulated by a trustworthy regulator. It is not enough to check if these brokers are registered companies alone, as the most sophisticated criminal syndicates often go to the lengths of registering their fraudulent companies with a company registration authority.

In general, you should keep a keen eye for red flags, such as:

• A deal that is too good to be true.
• A website with unclear contact details.
• A package that has been created “just for you” with dubiously favorable claims.
• A buggy or unresponsive Website that is often a clone website.

 

Will Your Money be Protected if Your Broker Becomes Insolvent? 

While the SCA is responsible for licensing brokers and ensuring fair practices, it does not compel brokers to sign up to a trader compensation scheme, as does other regulators. If a broker offers its clients membership to a compensation facility in the event of their insolvency, the broker is doing this on its own accord.

The SCA’s guidelines are somewhat vague in the area of investor protection and only instruct brokers to “Practice the licensed activity while exerting care and prudence…and observe the business norms in this regard and the principles of trust, fairness, equality and care for the interests of clients.”

The Dos and Don’ts of FOREX Brokers 

One of the first things a new FOREX trader ought to do is to check the extent to which the FOREX company abides by the rules and regulations governing its operation. Emphasis must be placed on what it can and cannot do.

There are seven things brokerage firms cannot do:

• The FOREX brokerage firm cannot recommend a buy or sell;
• The FOREX brokerage firm must not provide price or market expectations (rise/fall);
• The FOREX firm cannot control your financial dealings (deposit/withdrawal);
• The FOREX brokerage firm should not “manage” your portfolio under any circumstance;
• The FOREX brokerage firm cannot grant a client a bonus unless there are clear terms guiding it from beforehand;
• The brokerage firm must not use bank accounts not under its name; and
• FOREX brokerage firms cannot have or offer the service of account managers.

In short, the role of brokerage firms is strictly confined to facilitating buyers and sellers to come together toward an agreed-upon commission. FOREX brokerage firms that violate any of the seven rules aforementioned should be avoided. However, should the trader wish to receive any of the above-mentioned services, our advice is to seek an expert website, like Arincen, something we will delve into toward the end of this article.

 

Spread Differential, Extra Commissions and Commission-Free Accounts

A first step in FOREX trading is identifying the spread differential, defined as the difference between the bid (sell) price and the ask (buy) price of a currency pair. While most FOREX currency pairs are traded without commission, the spread is one “cost” that applies to any trade that you place. This is, indeed, the biggest source of profit for the FOREX company. Good companies typically offer a EUR-USD spread of three basis points.

As for commissions, FOREX trading companies can be placed into three categories. The first offer fixed spreads, while the second tender variable spreads with a third category of companies offering low-cost spreads, but that come with a (relatively high) fixed commission.

What Technologies, Tools and Platforms Should FOREX Brokers Offer? 

When it comes to sharing sensitive personal information online, such as a credit card, cyber security is paramount. You should, therefore, always look out for SSL certification and two-factor authentication (especially when registering with a new site). To provide our users with peace of mind, we at Arincen have introduced the “Company Checker,” which is an online tool directly linked to an international Website called Scamadviser. The latter is an independent site that checks the countries in which these FOREX Websites are managed, where the server is located, in addition to other security and informational aspects. It ranks FOREX firms by granting them a score ranging from 0% to 100%, with the best FOREX firms usually receiving a score of 90% and above. Any company that has achieved a score lower than 85% should thus be avoided. Simultaneously, when looking for a new FOREX company, users must ensure its Website is fast, modern and user-friendly.

Best Broker and Platform in the UAE

 

What is Arincen and what do we do?

Put simply, Arincen is a social networking platform that brings together traders and experts to exchange expertise and ideas. Together, we evaluate the best FOREX companies in the world while offering a compressive suite of services and tools, all in one place, either via a computer or a mobile app. The platform is so rich, one can create his own private portfolio of traders and experts they like and, at the same time, follow their recommendations and investment sentiments. Further, thanks to Arincen, users can keep an eye on market-price developments, as well as the latest news. Users can also benefit from the network’s educational courses on offer, to say nothing of exciting Webinars – all done in a modern and fast-paced work environment. Get all of what you need in one place, not less, not more. In short. Arincen: We Meet to Simplify the Trading World.

 

Arincen’s Review Methodology

The team at Arincen collected more than 120 pieces of data covering in excess of 100 licensed FOREX companies. Data collection was done in three ways:

Companies’ Websites.

Other Websites that have ranked FOREX companies.

Survey questionnaire (referred to here as Survey “1”) we had sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its own relative weight. These include licensing, deposits and withdrawals, number of assets etc.

Afterward we validated the data by:

Registering with FOREX companies as a secret shopper and/or as Arincen.

Survey number “2,” in which we asked these companies’ customers for important feedback and past experience.

The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful in ensuring the most accurate assessment possible, including taking into account different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung etc.

 To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our own research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%.