Choosing a forex broker starts with one basic question: is the company really regulated where 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 Regulation First
A authorisation from a strong regulator can offer real protection, such as segregated client funds and, in some countries, a compensation scheme. However, authorisations change: firms are sold, rebranded, sanctioned or lose their licence. Other firms only hold an offshore company registration, which is not financial supervision at all.
Which Safeguards a Strong Licence Typically Provides
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 offer a lower level of cover. Many offshore jurisdictions offer none of this, which is why the same brand can offer very different protection depending on which of its companies opens your account.
Companies Reviewed on FXSharp
The brokers and platforms below each have an independent review on FXSharp. Many hold licences from recognised regulators, while some also serve clients through offshore entities with lighter protection. Check which company would actually open 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
Steps to Verify a Broker 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. Next, 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. Compare the company name, licence status, licence type and, where listed, the approved website address.
Red Flags to Watch 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 more info the one you are using. Fraudsters often copy the name and licence number of a real 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 additional red flags, 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 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, and verify first, then you invest.