How to Verify a Trading Broker's Licence on the Official Register
Choosing a forex broker begins with one basic question: is the company actually regulated in the place it says it is? A licence number on a website is a claim, not evidence. The following guide shows how to verify that claim on the regulator's own public register before you send any money, and what to look for once you locate the entry.
Why Verify the Regulation Before Anything Else
A authorisation from a major regulator can give meaningful protection, such as segregated client funds and, in some countries, a compensation scheme. However, licences can change: companies are sold, rebranded, sanctioned or lose their authorisation. Other firms only hold an offshore company registration, which is not a forex licence at all.
Which Protection a Strong Licence Typically Provides
Rules differ by FXSharp.com 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 offer 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 have an editorial review on FXSharp. Many hold licences from major regulators, but several also onboard clients through offshore entities with weaker protection. Check which company would really 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
Steps to Check a Licence on Your Own
Find the full company name and licence number in the legal section of the broker's site or in its client agreement. Next, go to the regulator's site 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, if listed, the approved website address.
Warning Signs to Watch For
Be wary 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 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.
Verify 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 announcements when a firm's status changes.
Overall, a few minutes on the register may save you from serious losses. Trading in forex and CFDs carries a high risk of losing money, and verify first, then you invest.