How to Verify a CFD Broker's Regulation on the Regulator's Register
Choosing a forex broker begins with one simple question: is the company really licensed where it says it is? A licence number on a broker's site is a claim, not proof. The following guide shows how to check that claim on the regulator's own register before you send any money, and what to look for once you find the entry.
Reasons to Check the Regulation First
A licence from a major regulator may offer meaningful protection, such as segregated client funds and, in some countries, a compensation scheme. However, authorisations can change: companies are sold, rebranded, sanctioned or lose their authorisation. Some companies only hold an offshore company registration, which is not financial supervision at all.
Which Protection a Strong Licence Usually 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 provide a lower 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 Reviewed on FXSharp
The companies below each have an editorial review on FXSharp. Most hold licences from recognised regulators, while some also onboard clients through offshore entities with weaker protection. Check which company would really open your account, and read the review before 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 Broker Yourself
Find the exact company name and licence number in the footer of the broker's website or in its client agreement. Then, go to the regulator's website yourself, not through a link from the broker, and search its public register. Look up 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 wary 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 copy the name and licence number of a real company, so check the get more info 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 warning signs, whatever the website claims about regulation.
Check Once More 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 regulators often publish notices when a firm's status changes.
Overall, a couple of minutes on the register can spare you from a costly mistake. Leveraged trading in forex and CFDs carries a high risk of losing money, so verify first, then you deposit.