How to Check a Trading Broker's Licence on the Regulator's Register
How to Check a Trading Broker's Licence on the Regulator's Register
Blog Article
Selecting a forex broker starts with one basic question: is the company really regulated where it says it is? A licence number on a website is a claim, not evidence. The following article shows how to verify that claim on the regulator's own register before you deposit any money, and what to look for once you locate the entry.
Reasons to Verify the Regulation Before Anything Else
A authorisation from a major regulator may give meaningful protection, such as client money held separately and, in some countries, a compensation scheme. However, licences change: companies 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 Licence Typically Brings
Rules 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. Many offshore jurisdictions offer none of this, so the same brand can offer very different protection depending 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 major regulators, but some also onboard clients through offshore entities with lighter protection. Find out which company would actually 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
Steps to Check a Broker Yourself
Look up the exact company name and licence number in the legal section of the broker's website or in its client agreement. Then, 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 show 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 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 copy the name and licence number of a genuine company, so look at 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 warning signs, whatever the website claims about regulation.
Verify 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. Looking at 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 FXSharp review couple of minutes on the register may spare you from serious losses. Trading in forex and CFDs carries a high risk of losing money, so check first, then you deposit.
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