How to Check a Forex Broker's Regulation on the Official Register
Selecting a forex broker starts with one basic question: is the company actually licensed where it says it is? A licence number on a broker's site is a claim, not proof. The following article explains how to verify that claim on the regulator's own register before you deposit any money, and what to look for once you find the entry.
Why Verify the Licence First
A licence from a strong regulator can give real safeguards, such as segregated client funds and, in some jurisdictions, a compensation scheme. But, licences can change: companies are sold, rebranded, sanctioned or lose their authorisation. Some firms only hold an offshore company registration, which is not a forex licence at all.
Which Protection a Licence Typically Brings
Requirements differ by country, but major regulators generally 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. 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 have an independent review on FXSharp. Many hold licences from recognised regulators, but several also serve clients through offshore entities with weaker protection. Find out which company would really open your account, and read the review before 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
How to Verify a Licence on Your Own
Find the full 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, if listed, the approved website address.
Warning Signs to Look Out For
Be wary 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 further warning signs, 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 deposit or a withdrawal costs nothing, and supervisors often publish notices when a firm's status changes.
Overall, a few minutes on the regulator's register can spare you from serious losses. Leveraged trading in forex and CFDs carries a high risk of losing money, and verify before you deposit. FX Sharp