Choosing a forex broker begins with one basic question: is the company actually regulated where it says it is? A licence number on a broker's site is a claim, not proof. The following guide explains 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.
Reasons to Verify the Licence Before Anything Else
A authorisation from a major regulator can give real safeguards, 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 companies only hold an offshore company registration, which is not financial supervision at all.
Which Protection a Licence Usually Brings
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 provide a smaller level of cover. Most 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 have an editorial review on FXSharp. Most hold licences from recognised regulators, but some also onboard clients through offshore entities with lighter protection. Check which company would actually open your account, and read the review before 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 Broker Yourself
Find the exact company name and licence number in the footer of the broker's site 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 show licence numbers at all. Match the company name, licence status, licence type and, where listed, the approved website address.
Red Flags to Look Out 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 as well. Pressure to deposit quickly, promises of guaranteed returns and requests to pay through unusual channels are further red flags, 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. Checking the register again before a large deposit or a withdrawal costs nothing, and supervisors often publish notices when FXSharp editorial review a firm's status changes.
Overall, a few minutes on the register may spare you from serious losses. Trading in forex and CFDs carries a high risk of losing money, so verify first, then you invest.