How to Verify a Trading Broker's Licence on the Regulator's Register
How to Verify a Trading Broker's Licence on the Regulator's Register
Blog Article
Selecting a forex broker begins with one simple question: is the company actually regulated in the place it says it is? A licence number on a website is a claim, not proof. The following guide shows how to verify that claim on the regulator's own public register before you send any money, and what to look for once you locate the entry.
Why Verify the Licence Before Anything Else
A licence from a strong regulator can give meaningful safeguards, such as segregated client funds and, in some countries, a compensation scheme. But, authorisations change: firms are sold, rebranded, sanctioned or lose their licence. Other companies only hold an offshore company registration, which is not a forex licence at all.
Which Protection a Strong Licence Typically Brings
Requirements differ by country, but leading 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. Many offshore jurisdictions offer none of this, so the same brand can give very different protection based on which of its companies opens your account.
Brokers Reviewed on FXSharp
The companies below each have an editorial review on FXSharp. Most hold licences from recognised regulators, while several also serve clients through offshore entities with lighter protection. Check which company would really open your account, and read the review prior to 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 Check a Licence on Your Own
Look up the full company name and licence number in the footer of the broker's site or in its client agreement. Next, go to the regulator's website directly, 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. Compare 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 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 red flags, whatever the website claims about regulation.
Check Again Later On
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 notices when a firm's status changes.
In short, a few minutes on the register can save you from serious losses. Leveraged trading in forex and CFDs carries a high risk of losing money, so verify before you the full review invest.
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