How to Check a Trading Broker's Licence on the Regulator's Register
Selecting a forex broker begins with one simple question: is the company really licensed in the place it says it is? A licence number on a website is a claim, not evidence. 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 locate the entry.
Reasons to Check the Regulation First
A licence from a major regulator may offer real protection, such as client money held separately and, in some countries, a compensation scheme. But, licences 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 Licence Typically Brings
Rules 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 provide a smaller level of cover. Most 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.
Brokers Covered on FXSharp
The companies below have an editorial review on FXSharp. Many hold licences from recognised regulators, while several also onboard clients through offshore entities with lighter protection. Find out which company would actually open your account, and read the review prior to depositing.
Pepperstone
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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 Licence Yourself
Look up the full company name and licence number in the legal section of the broker's website or in its client agreement. Next, go to the regulator's site 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, if listed, the approved website address.
Warning Signs to Watch For
Be careful if the register shows a similar 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 check 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 red flags, 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 get more info deposit or a withdrawal costs nothing, and regulators often publish notices when a firm's status changes.
In short, a couple of minutes on the regulator's register may spare you from a costly mistake. Leveraged trading in forex and CFDs carries a high risk of losing money, and verify before you invest.