How to Verify a Forex Broker's Regulation on the Regulator's Register
Selecting a forex broker begins with one basic 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 evidence. The following guide shows how to verify that claim on the regulator's own public register before you deposit any money, and what to look for once you locate the entry.
Why Verify the Licence Before Anything Else
A licence from a major regulator can offer real safeguards, such as segregated client funds and, in some jurisdictions, a compensation scheme. However, authorisations can change: companies are sold, rebranded, sanctioned or lose their authorisation. Other firms only hold an offshore company registration, which is not a forex licence at all.
Which Protection a Licence Typically Provides
Requirements differ by country, but major regulators usually 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 give very different protection based on which of its companies opens your account.
Companies Reviewed on FXSharp
The companies below each have an editorial review on FXSharp. Most hold licences from major regulators, but some also onboard clients through offshore entities with weaker protection. Find out which company would really open your account, and read the review prior to opening an account.
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 Check a Licence on Your Own
Find the full company name and licence number in the legal section of the broker's site or in its client agreement. Then, 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 show licence numbers at all. Match the company name, licence status, licence type and, where listed, the approved website address.
Warning Signs to Look Out For
Be careful if the register shows a look-alike 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 here copy the name and licence number of a genuine company, so look at the regulator's warning list for clone firms as well. Pressure to deposit quickly, promises of guaranteed returns and requests to pay through unusual channels are further warning signs, whatever the website claims about regulation.
Verify 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. Checking the register again before a large deposit or a withdrawal costs nothing, and supervisors often publish announcements when a firm's status changes.
In short, a couple of minutes on the register can spare you from a costly mistake. Trading in forex and CFDs carries a high risk of losing money, so verify first, then you invest.