How to Check a Forex Broker's Licence on the Regulator's Register
Selecting a forex broker begins with one simple question: is the company actually licensed where it says it is? A licence number on a broker's site is a claim, not evidence. The following article shows how to verify that claim on the regulator's own register before you send any money, and what to look for once you find the entry.
Why Check the Regulation Before Anything Else
A authorisation from a major regulator may offer real protection, such as client money held separately and, in some jurisdictions, a compensation scheme. But, licences change: firms are sold, rebranded, sanctioned or lose their authorisation. Other firms only hold an offshore company registration, which is not financial supervision at all.
Which Safeguards a Licence Usually 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 offer a smaller 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 editorial review on FXSharp. Many hold licences from major regulators, but several also onboard clients through offshore entities with lighter 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 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. 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. at FXSharp Fraudsters often copy the name and licence number of a genuine 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 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. Looking at the register again before a large deposit or a withdrawal costs nothing, and supervisors often publish announcements when a firm's status changes.
In short, a few minutes on the register may spare you from serious losses. Leveraged trading in forex and CFDs carries a high risk of losing money, so verify first, then you invest.