Foreign exchange is the currency used to buy and sell goods and services.
It’s usually exchanged through a bank or a third party.
Foreign exchange transactions can be difficult to track, however, and many firms don’t provide details on how to do this.
To make the process of trade more transparent, the UK government has created an online foreign exchange trading calculator.
This is useful if you’re unsure about the fees and trading rules of a particular foreign exchange company.
Here’s how to convert your own money to foreign currency.
How do I trade foreign exchange?
You can’t trade foreign currency directly from your account.
The exchange you use must be authorised and insured by a third-party.
This may involve sending in a document or calling an authorised number.
For example, if you buy a car from a dealership and then take it to a car dealer to get a refund, the dealer will need to confirm the purchase and the sale has been authorised by the UK’s Trading Standards Authority (TSA).
It will then send the car back to the dealership and the buyer will receive their refund.
Where can I find out more about foreign exchange transactions?
You’ll find information on the TSA website and the Foreign Exchange Trading Scheme (FETS) website.
The TSA has an international trade database that provides more details on UK companies that operate in the EU, and other jurisdictions.
If you have questions about the legality of trading in foreign currency in the UK, you can contact the TSB.
The Trading Standards Agency (TSB) has a detailed guide to foreign exchange and can advise you on how you can avoid unnecessary paperwork.
What are the different types of foreign exchange firms?
You might be thinking that foreign exchange companies (FCEs) operate in different countries, and that the fees charged are different in different regions.
This isn’t necessarily the case.
Each company has its own regulations and standards.
In general, FCEs charge fees for sending and receiving transactions in currencies other than sterling, and may charge commissions if you use a currency that is less than sterling.
For more information, see our article on how foreign exchange businesses work.
How to choose a foreign exchange account to open and manage?
The best way to make money trading in and investing in foreign currencies is to have an account.
You’ll need to have a bank account, which you can open and close on a daily basis.
Your account must be managed by a registered account agent, or a company that is registered in the jurisdiction where you want to operate.
For the best way of opening and managing an account, read our article about how to open a foreign currency account.
A foreign exchange investment fund or mutual fund will have a trading window that opens at 6am and closes at 4pm.
What is the difference between a foreign fund and a mutual fund?
A mutual fund is a type of investment fund that invests in shares.
It has a market price that fluctuates over time.
A mutual Fund is a company which holds shares in the stock market.
Mutual funds are listed on the London Stock Exchange (LSE) and can be bought or sold with other funds.
For information on how mutual funds work, read this guide.
Where to start?
There are a number of different foreign exchange products to choose from.
Read our guide to investing in international currencies and foreign exchange for more information.
If trading is too complicated for you, check out our guide on how money laundering and tax is dealt with by the Financial Conduct Authority.
What fees do foreign exchange providers charge?
Foreign exchange companies charge a range of fees depending on the company you trade with.
They range from 1% to 6% depending on how much you’re willing to pay for the services you provide.
You might also be charged commission fees for trading services in the market.
If these fees aren’t clear to you, the FCA can help.
For a complete list of fees and other details, check the TSO website.
Can foreign exchange traders buy and trade shares on a UK exchange?
Yes, they can.
A company will need a UK address, a trading license, and a UK bank account.
Foreign exchanges are available in London, Edinburgh, Belfast, Cardiff and Cardiff South.
The FCA will also have an in-house account service that can help you set up a foreign account.
For this service, you’ll need your bank details, your account number and an email address.
The account will then open automatically and you’ll be able to trade.
What should I do if I’m asked to send my money overseas?
The answer to this is a simple yes: don’t.
Foreign Exchange trading companies will ask you to send funds to the jurisdiction in which the firm is based, but they may charge additional fees.
Read more about the difference.
How can I trade my funds overseas?
You may be able