Selecting a forex broker starts with one simple question: is the company really licensed where it says it is? A licence number on a website is a claim, not proof. This article shows how to verify that claim on the regulator's own register before you deposit any money, and what to look for once you locate the entry.
Reasons to Check the Licence Before Anything Else
A authorisation from a strong regulator may offer real protection, such as segregated client funds and, in some jurisdictions, a compensation scheme. However, licences can change: firms are sold, rebranded, sanctioned or lose their authorisation. Other firms only hold an offshore company registration, which is not financial supervision at all.
What Safeguards a Strong Licence Usually Provides
Rules 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 provide a smaller level of cover. Most offshore jurisdictions offer none of this, which is why the same brand can offer very different protection based on which of its companies opens your account.
Brokers Reviewed on FXSharp
The brokers and platforms below each have an editorial review on FXSharp. Most hold licences from recognised regulators, but several also onboard clients through offshore entities with lighter protection. Check which company would really 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
Steps to Check a Licence on Your Own
Look up the full company name and licence number in the footer 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. Match the company name, licence status, licence type and, where listed, the approved website address.
Warning Signs to Look Out For
Be wary if the register shows a similar but different company name, a get more info 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 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 a firm's status changes.
Overall, a couple of minutes on the register may spare you from serious losses. Leveraged trading in forex and CFDs carries a high risk of losing money, so check first, then you deposit.