In the UK, all forex brokers, including ECN forex brokers, are regulated by the Financial Conduct Authority (FCA), while also being overseen by the European Securities and Markets Authority (ESMA). Because of the ESMA’s influence on ECN forex brokers in the UK, trading leverage is limited to just 1:30 for non-professional traders.
ECN brokers, or ECN trading accounts, are differentiated from other types of accounts by charging commissions on all trades and very tight spreads. These brokers therefore make their money from commissions, and not from the spreads as most other brokers do. When it comes to order execution, ECN brokers pass orders directly on to a network (electronic communication network - ECN) of other brokers and banks, where orders are automatically matched.