Selecting a forex broker starts with one basic question: is the company really regulated where it says it is? A licence number on a website is a claim, not evidence. This article shows how to check that claim on the regulator's own register before you send any money, and what to look for once you find the entry.
Reasons to Check the Licence First
A licence from a strong regulator may give real protection, such as client money held separately and, in some jurisdictions, a compensation scheme. However, licences can change: companies are sold, rebranded, sanctioned or lose their authorisation. Other companies only hold an offshore company registration, which is not a forex licence at all.
Which Safeguards a 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 smaller level of cover. Most offshore jurisdictions offer none of this, so the same brand can give very different protection depending on which of its companies opens your account.
Companies Covered on FXSharp
The companies below each have an editorial review on FXSharp. Most hold licences from major regulators, while several also onboard clients through offshore entities with lighter protection. Check which company would really open your account, and read the review prior to 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
Steps to Check a Broker on Your Own
Look up the exact company name and licence number in the footer of the broker's site or in its client agreement. Then, go to the regulator's site directly, 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 display licence numbers at all. Match the company name, licence status, licence type and, where 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 real 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 Again 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 announcements when a firm's status changes.
In short, a couple of minutes on the regulator's register can spare you from serious losses. Trading in forex and CFDs carries a high risk of losing money, and check first, then see the review you invest.