Finding a forex broker starts with one basic question: is the company really regulated in the place it says it is? A licence number on a website is a claim, not evidence. The following article explains how to verify that claim on the regulator's own register before you send any money, and what to look for once you source: FXSharp find the entry.
Reasons to Verify the Regulation First
A authorisation from a strong regulator can offer meaningful safeguards, such as segregated client funds and, in some countries, a compensation scheme. But, authorisations can change: firms are sold, rebranded, sanctioned or lose their authorisation. Some firms only hold an offshore company registration, which is not financial supervision at all.
Which Protection a Licence Typically Brings
Requirements differ by country, but leading 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 offer a lower level of cover. Most offshore jurisdictions offer none of this, so the same brand can offer very different protection depending on which of its companies opens your account.
Companies Covered on FXSharp
The brokers and platforms below each have an editorial review on FXSharp. Most hold licences from recognised regulators, but some also serve clients through offshore entities with weaker protection. Check which company would actually open your account, and read the review prior to 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
How to Verify a Licence on Your Own
Find the exact company name and licence number in the legal section of the broker's site or in its client agreement. Then, go to the regulator's site yourself, 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 display licence numbers at all. Compare 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 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 red flags, whatever the website claims about regulation.
Check Once More Later On
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 regulators often publish announcements when a firm's status changes.
Overall, a few minutes on the regulator's register may spare you from serious losses. Leveraged trading in forex and CFDs carries a high risk of losing money, so verify before you deposit.