How to Verify a Trading Broker's Regulation on the Regulator's Register
Selecting a forex broker starts with one simple question: is the company actually licensed in the place it says it is? A licence number on a broker's site is a claim, not proof. This article explains how to verify that claim on the regulator's own public register before you deposit any money, and what to look for once you find the entry.
Why Verify the Licence Before Anything Else
A authorisation from a major regulator may give real safeguards, such as segregated client funds and, in some jurisdictions, a compensation scheme. But, authorisations can change: firms are sold, rebranded, sanctioned or lose their authorisation. Other firms only hold an offshore company registration, which is not financial supervision at all.
Which Safeguards a Licence Typically Brings
Rules differ by country, but leading regulators generally require brokers to keep client money in separate bank accounts, hold a minimum amount of capital, report to the regulator and follow conduct rules on marketing and leverage. In the UK, eligible clients of a failed firm may be covered by the Financial Services Compensation Scheme. In the European Union, investor compensation funds offer a smaller level of cover. Most offshore jurisdictions offer none of this, so the same brand can offer very different protection depending on which of its companies opens your account.
Companies Covered on FXSharp
The companies below have an editorial review on FXSharp. Many hold licences from major regulators, while some also serve clients through offshore entities with weaker protection. Find out which company would really open according to FXSharp your account, and read the review before depositing.
- Pepperstone
- copyright
- Interactive Brokers
- Saxo Bank
- Charles Schwab
- Webull
- Admirals
- Axi
- Libertex
- RoboForex
- InstaForex
- PU Prime
- StoneX
- Mitrade
- ADSS
- TD365
- Spreadex
- ProRealTime
- GKFX
- AMP Global
How to Verify a Broker Yourself
Find the exact company name and licence number in the footer of the broker's website or in its client agreement. Next, go to the regulator's site yourself, not through a link from the broker, and search its public register. Search by company name as well as by number, because some registers do not display licence numbers at all. Match the company name, licence status, licence type and, if listed, the approved website address.
Red Flags to Watch For
Be wary if the register shows a similar but different company name, a licence marked as revoked, suspended or surrendered, or a website address that is not the one you are using. Fraudsters often copy the name and licence number of a genuine company, so check the regulator's warning list for clone firms too. Pressure to deposit quickly, promises of guaranteed returns and requests to pay through unusual channels are additional red flags, whatever the website claims about regulation.
Check Again Over Time
A licence that was active when you opened an account may not stay that way. Brokers merge, sell their client books, move clients to another entity or lose their authorisation. Looking at the register again before a large deposit or a withdrawal costs nothing, and regulators often publish announcements when a firm's status changes.
Overall, a couple of minutes on the regulator's register can save you from a costly mistake. Trading in forex and CFDs carries a high risk of losing money, so verify before you deposit.