How to Verify a Trading Broker's Licence on the Official Register
How to Verify a Trading Broker's Licence on the Official Register
Blog Article
Selecting a forex broker begins with one basic question: is the company actually licensed in the place it says it is? A licence number on a website is a claim, not proof. This guide 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.
Reasons to Verify the Licence First
A licence from a strong regulator may offer meaningful safeguards, such as segregated client funds and, in some jurisdictions, a compensation scheme. But, authorisations can change: companies are sold, rebranded, sanctioned or lose their licence. Some 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 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 FXSharp.com 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. Many offshore jurisdictions offer none of this, which is why the same brand can give very different protection depending on which of its companies opens your account.
Brokers Covered on FXSharp
The companies below each have an editorial review on FXSharp. Most hold licences from major regulators, but some also onboard clients through offshore entities with weaker 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
How to Check a Broker Yourself
Find the full company name and licence number in the footer of the broker's site or in its client agreement. Next, 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 show licence numbers at all. Match the company name, licence status, licence type and, if listed, the approved website address.
Red Flags to Watch 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 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.
Verify 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 supervisors often publish notices when a firm's status changes.
Overall, a few minutes on the regulator's register can save you from a costly mistake. Trading in forex and CFDs carries a high risk of losing money, so verify before you invest.
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