How to Check a Trading Broker's Licence on the Regulator's Register
How to Check a Trading Broker's Licence on the Regulator's Register
Blog Article
Selecting a forex broker starts with one basic question: is the company really licensed where it says it is? A licence number on a website is a claim, not proof. The following article shows how to check that claim on the regulator's own public register before you deposit any money, and what to look for once you find the entry.
Why Check the Licence Before Anything Else
A licence from a major regulator may offer real safeguards, such as client money held separately and, in some countries, a compensation scheme. However, licences can change: firms are sold, rebranded, sanctioned or lose their authorisation. Other companies only hold an see the review offshore company registration, which is not a forex licence at all.
What Safeguards a Strong Licence Usually Brings
Rules 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 lower level of cover. Many 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. Many hold licences from recognised regulators, but some also serve clients through offshore entities with lighter 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 Check a Licence Yourself
Look up the exact company name and licence number in the footer of the broker's website or in its client agreement. Next, go to the regulator's website 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. Match the company name, licence status, licence type and, if listed, the approved website address.
Red Flags to Look Out For
Be careful 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. 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 further warning signs, whatever the website claims about regulation.
Check Again 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 supervisors often publish notices when a firm's status changes.
Overall, a few minutes on the register can spare you from serious losses. Trading in forex and CFDs carries a high risk of losing money, so verify first, then you deposit.
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