Module 1F: Futures Foundations · Lesson 12 of 13 · Back to Futures Foundations · Course
What you’ll learn
- the two main routes: UK broker or US broker
- what FCA authorisation does and doesn’t protect
- the appropriateness test
- W-8BEN forms and US brokers
- currency and other costs
Two routes
- A UK (FCA-authorised) broker that offers exchange-traded futures. Check it on the FCA Register, including the exact permissions and the trading names.
- A non-UK broker, often a US futures broker. In the US, futures brokers are regulated by the Commodity Futures Trading Commission (CFTC) and must be members of the National Futures Association (NFA). You can check a US firm on the NFA’s BASIC search.
We don’t recommend brokers and there are no affiliate links on this site. Whatever you choose, check the firm yourself.
What protections you get
| FCA-authorised UK broker | Non-UK broker | |
|---|---|---|
| FCA rules on client money | Yes | No – local rules apply |
| FSCS if the firm fails | Possibly, up to the limit, for eligible claims | No |
| Financial Ombudsman Service | Yes, for eligible complaints | No |
| Negative balance protection on futures | No – it covers spread bets and CFDs only | No |
None of these protections ever cover trading losses. See client money and FSCS protection.
The appropriateness test
Futures are complex products, so a UK broker must check whether you understand the risks before letting you trade. Expect questions about your experience and knowledge. If you don’t pass, that’s useful information – it isn’t something to “game”.
W-8BEN and US brokers
If you open an account with a US broker as a UK resident, you’ll normally be asked to complete IRS form W-8BEN, which confirms you’re not a US person for tax purposes. It doesn’t mean you owe US tax on futures trading, but it doesn’t replace your UK tax obligations either. See 1F.13.
Costs to compare
- Commission per contract, per side, plus exchange, clearing and regulatory fees.
- Market data fees each month (see 1F.11).
- Platform fees – some platforms charge a licence or monthly fee.
- Currency conversion – US futures are in dollars. Depositing pounds and converting back can cost more than the commission.
- Minimum deposits and inactivity fees.
Red flags
Be wary of anyone who contacts you offering to open a futures account, manage it for you or “guarantee” returns, or a firm whose details don’t match the register. See trading scams to avoid.
Key takeaways
- You can trade futures through an FCA-authorised UK broker or a non-UK (often US) broker.
- Non-UK brokers don’t come with FCA, FSCS or Financial Ombudsman protection.
- Negative balance protection doesn’t cover futures anywhere.
- US brokers usually ask for a W-8BEN form.
- Compare commission, fees, data, platform and currency costs together.
Quick check
- Which US body regulates futures brokers?
- Does FSCS cover trading losses?
- What is a W-8BEN for?
Answers: 1) The CFTC (with NFA membership). 2) No, never. 3) To confirm you’re not a US person for US tax purposes.
FAQs
Is a prop firm a broker?
No. A prop firm sells evaluations on simulated accounts. You aren’t its client in the way you’d be a broker’s client.
Do I need a lot of money for a real futures account?
Micro contracts reduce the money needed, but margin, minimum deposits and the risk of losing more than you deposit all mean you should practise on a simulator first.
Disclaimer: This page is general education, not financial, investment or tax advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning to trade doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Information checked 18 October 2026. Read our full risk warning.