Selecting a forex broker starts with one simple question: is the company really licensed in the place it says it is? A licence number on a broker's site is a claim, not proof. This article explains how to verify that claim on the regulator's own register before you send any money, and what to look for once you locate the entry.
Reasons to Check the Regulation Before Anything Else
A authorisation from a strong regulator may offer meaningful safeguards, such as client money held separately and, in some jurisdictions, a compensation scheme. However, authorisations 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.
What Safeguards a Strong Licence Usually Brings
Rules differ by country, but leading 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 offer a smaller level of cover. Most offshore jurisdictions offer none of this, so the same brand can give very different protection based on which of its companies opens your account.
Brokers Covered on FXSharp
The companies below each have an independent review on FXSharp. Most hold licences from recognised regulators, but some also onboard clients through offshore entities with weaker protection. Check which company would really open your account, and read the review before 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
Steps to Check a Licence Yourself
Find the exact company name and licence number in the legal section 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. Compare the company name, licence status, licence type and, if listed, the approved website address.
Warning Signs to Look Out 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 real company, so check the regulator's warning list for clone firms too. Pressure to deposit on FXSharp quickly, promises of guaranteed returns and requests to pay through unusual channels are further red flags, 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. Looking at the register again before a large deposit or a withdrawal costs nothing, and regulators often publish notices when a firm's status changes.
In short, a few minutes on the register may spare you from a costly mistake. Trading in forex and CFDs carries a high risk of losing money, so verify first, then you deposit.