Broker Regulation Check: Verify Before You Deposit

Most forex brokers put a licence on their website. Many also put a regulator’s logo in the footer, a badge on the homepage and a line about client funds on the sign-up page. Each of these looks like proof. None of them is proof on its own, because a logo can appear on a page without the company behind the page holding that licence, and a licence can belong to a company that does not serve the person reading the page.

This guide shows how to verify a broker’s regulation before you deposit, in a way that holds up when the marketing is not quite what it seems. You will not need legal training. You will need a licence number, a regulator’s public register, a copy of the client agreement and about an hour.

Some links on this page are affiliate links. If you open one and open an account, we may earn a commission at no extra cost to you. The method below does not depend on which broker pays a commission.

Why the logo is the wrong place to start

A logo answers the question “which regulator has this broker’s name somewhere in its material?” It does not answer “which company holds my money, under what licence, with what protection?” Those are different questions, and the second one is the only one that matters when you deposit.

A broker’s website is written for marketing. Its pages describe the group, its brand and its products, and they may mention several regulators because the group holds several licences. The company you actually open an account with is named somewhere else, usually in the client agreement that you accept during registration. That company is the one whose licence applies to your money.

So the verification starts from the agreement, not from the homepage. Find the company named there, then check its licence. The homepage can point you to the right page, but it cannot replace the check.

Step one: find the licence number on the regulation page

Start on the broker’s regulation page, not on the footer. Most brokers publish a dedicated page that lists each licence, the company that holds it and the licence number. XM’s regulation page, for example, lists a single licence held by XM Global Limited, registered with the Financial Services Commission of Belize under licence number 8557558. That page is the broker’s own statement of what it is licensed for, and it is the first document to save.

Note the company name exactly as written, including any suffix such as Limited, Ltd or B.V. Note the licence number, the regulator’s name and the date you checked the page. If the regulation page lists several companies, write each one down with its licence, because the entity question comes later.

If the broker has no regulation page, or the page names a company you cannot find in your agreement, stop there. A missing page is not a verdict on the broker, but it is a reason to ask before you deposit.

Step two: look the number up on the regulator’s register

Every serious regulator publishes a public register of the firms it licenses. Search it for the licence number, not the brand name. Brand names can be shared by several companies, and a search by brand may return an entity you are not dealing with.

When the register returns an entry, check four things. The company name should match the one on the broker’s regulation page, including the legal suffix. The licence number should match. The status should show the licence as active or authorised, not suspended, revoked or expired. And the permitted activities should include the service you are buying, such as dealing in foreign exchange or contracts for difference.

If the register entry shows a different name, a different number or a status other than active, do not deposit. Write down what you found, with the date and a screenshot or saved PDF of the entry. Ask the broker in writing to explain the difference before you fund anything.

Registers change. Save the entry with its date. If you later need to show what the register said when you opened the account, the saved copy is your only evidence.

Step three: confirm the entity your account sits under

This is the step most traders skip, and it is the one that decides which regulator actually covers their money. A group can hold several licences through several companies, and each company serves a different set of clients. The company named in your client agreement is the one that holds your money and the one whose regulator applies to your account.

Read the first pages of the client agreement. Find the sentence that names the contracting company, usually near the start, and compare it with the regulation page. If they match, you have confirmed the link between the licence and your account. If they do not match, find out why before you deposit.

Our review of Exness makes this point in detail. The group’s FCA and CySEC licensed companies state that they do not serve retail clients, so a retail account sits with an entity in another jurisdiction, with its own regulator and its own protection. Anyone who assumed the FCA or CySEC licence covered a retail deposit would be relying on the wrong company. The same logic applies to any broker with several entities.

Write the entity name in your checklist, next to the licence number and the register entry. If the agreement names an entity you have not checked on the register, check it now.

Step four: understand what the regulator protects

A licence is a permission to operate under a regulator’s rules. It is not a promise about what happens to your money. Some regulators run a compensation scheme that pays a fixed amount to eligible clients if a regulated firm fails. Others have no such scheme, or they cover only certain activities. The difference matters more than the logo.

Our RoboForex review explains this for an entity regulated by the Belize Financial Services Commission under licence 9759600. Its protection comes from a Financial Commission fund and civil liability insurance, rather than a statutory compensation scheme of the kind a larger regulator operates. That is not a reason to avoid the broker, but it is a reason to size deposits conservatively and to read the terms before you fund.

When you read a regulator’s protection terms, find five things. The scheme’s name, if it has one. The amount it covers per client. The types of client and account it covers. The types of loss it excludes. And how a claim is made, with any deadline. Write each answer in your checklist. If you cannot find one of them, ask the broker or the regulator in writing before you deposit.

Step five: check client-fund protection in the agreement

Client-fund protection is the rule that the broker must keep your deposits separate from its own money. In the agreement, look for wording that says client funds are held in segregated accounts, and check whether that wording applies to your account type and entity.

Segregation protects your deposit if the broker itself runs into trouble, because the money should not be part of the broker’s assets. It does not protect you from losing money in trades, and it does not guarantee that the funds will be returned quickly if a dispute arises. Read the wording on withdrawals and on any right the broker has to offset or hold funds.

If the agreement is vague on segregation, ask for the exact clause in writing. A broker that cannot point to a clear clause is telling you something about its terms, and you should weigh that before depositing.

Step six: read the complaint route before you need it

Every regulated broker should give you a complaint route, and it should name the body you can escalate to if the broker does not resolve the complaint. Find that route in the agreement or on the regulation page, and write down the steps and the deadlines.

A complaint route is most useful when you know it before a dispute. Learn whether the regulator handles complaints from your country, whether it accepts complaints about the entity named in your agreement, and whether there is a time limit for filing. Save the route with the rest of your checklist.

If the broker’s complaint route sends you only to an internal department and names no external body, note that. It does not make the broker unsafe, but it does mean you have fewer options if a dispute goes badly.

Step seven: check your own country and the restricted list

Regulation applies to clients in certain countries, and brokers often refuse clients in others. The restricted list is usually published in the footer or the terms. XM’s own footer names several restricted regions, including the United States, Canada and Israel, and says it does not direct its services to individuals in countries where the use of its services may be unlawful.

Find the restricted list and check your country against it. If your country is on the list, the broker may refuse your account later, even if you have deposited. A broker that accepts your deposit and then closes your account can leave you with a withdrawal problem, so check this before you fund.

Also check whether the broker serves your country through a separate entity. Some groups route clients from different regions through different companies, each with a different licence. Your agreement should name the entity that serves your country, and that is the one to verify.

Step eight: keep a dated record

Verification is only useful if you can show what you checked and when. Save the regulation page, the register entry, the client agreement, the protection terms and the complaint route. Save each as a PDF or a screenshot with the date visible. Keep them in one folder, with the checklist and the account opening confirmation.

Brokers change their pages. A regulation page may be updated, a clause may be reworded, and a register entry may change status. Your saved copy shows what the page said when you opened the account, and that is the version a complaint or a dispute will turn on.

Re-check the register and the regulation page once a year, and whenever the broker sends a notice about changes to its terms. If the licence changes or the entity changes, read the new documents before you add funds.

Reading a register entry line by line

A register entry is short, but each line answers a different question, and it is easy to read only the company name and stop. Read every line. Start with the firm’s registered name and any trading names listed beside it. A trading name is what the public sees on the website, and it is not the legal entity. The legal name is the one that counts for your agreement.

Next, look at the licence number and any reference numbers the register shows. Some regulators use one number for the firm and another for each permitted activity. Make sure the number you wrote down from the broker’s page matches the number on the register, character for character, because a single transposed digit is enough to point you at a different company.

Then check the status field and its date. Statuses vary from one regulator to another, but the question is always the same: is the licence active today? A status that says authorised with an effective date tells you when it started. A status that says suspended, withdrawn, expired or under investigation tells you not to deposit until you have an explanation from the regulator, not only from the broker.

Look at the permissions next. A register may list the services the firm can provide, such as dealing in investments, managing funds or providing an online trading platform. Confirm that the service you are buying appears in that list. A firm licensed to advise, for example, may not be licensed to execute the trades an EA places.

Finally, look for any notice attached to the entry, such as a restriction on serving retail clients or a condition on its licence. A restriction of that kind is important, because it can mean the company named on the register does not serve the client category you belong to. Write the notice down in full and ask the broker which company serves you.

Questions to put to the broker in writing

Before you deposit, send the broker a short written list of questions. A written reply is evidence in a way a chat message is not, and it forces a precise answer. Ask for the exact name of the company that will hold your funds, and ask for its licence number and the register link. Ask which entity serves clients in your country, and whether that entity is the one named in your agreement.

Ask which compensation scheme, if any, covers your account, and how much it pays per client. Ask whether client funds are held in segregated accounts, and at which bank or custodian. Ask what happens to your funds if the broker closes or is put into administration, and how long a withdrawal would take in that case.

Ask for the complaint route in writing, including the external body you can escalate to and the time limit for a complaint. Ask whether the licence is expected to change, and whether the broker has any pending regulatory action it is required to disclose.

Keep the questions and the replies together with the date. If the replies are vague, ask again with a narrower question. A broker that answers a precise question with a general statement has told you how it will answer the next one.

When a licence or entity changes

Brokers sometimes move clients between entities, transfer a licence, or change the company that serves a region. Such a change can happen after you have opened an account, and it can change which regulator and which compensation scheme apply to your money. A change of this kind is not automatically a problem, but it is a change you must check.

When a broker notifies you of a change, read the notice in full. Find the new entity name, its licence number and the effective date. Check the new entity on the register and compare its protection terms with the old ones. If the new terms give you less protection, you have the right to ask what that means for your existing balance and open positions, and to ask for the answer in writing.

If a broker moves your account without notice, treat that as a finding. Save the evidence, check the register for the new entity, and raise the question with the broker and, if needed, with the regulator.

How verification changes for an EA trader

An expert advisor trader has a particular reason to care about entity and licence. An EA can run for weeks on one account, and an account that closes, changes entity or is restricted mid-test can leave an open position with no one to manage it. The check you do before funding is also the check that protects a running system.

Before you connect an EA to a live account, confirm the entity, the licence and the restricted list again. Check that the broker’s server time and symbol names are as your EA expects, because a change in either can affect the system as much as a change in regulation. Save the regulation page and the register entry alongside the EA’s settings file, so that the record of what you verified sits next to the record of what the EA was set to do.

If your EA relies on a particular leverage or hedging rule, check that the entity’s terms still allow it. A licence and an entity can allow one thing and restrict another, and the account terms are where that difference is written down.

What the register cannot tell you

A register confirms that a company holds a licence and what it is permitted to do. It does not tell you whether the company is well run, whether its prices are fair, whether its execution is fast, or whether its bonuses are worth taking. Those questions need a demo test, a reading of the terms and, if you have a concern, a written question to the broker.

It also does not tell you how a broker will behave in a crisis. A licence is a commitment to follow rules. It is not a guarantee that the rules will protect you in every case, and a regulator’s complaint process can take time.

We have not verified every licence held by every broker in this guide. Our reviews state what we could check, and where we could not check a claim, they say so.

Common mistakes that cost traders money

The first mistake is to treat a logo as proof. A logo is marketing, and a register entry is evidence. Check the entry.

The second mistake is to check the brand name instead of the licence number. A brand can cover several companies, and a search by brand may return an entity you are not dealing with.

The third mistake is to check the licence but not the entity. A licence held by a company you will not contract with does not cover your deposit.

The fourth mistake is to assume that regulation means compensation. Compensation depends on the scheme and the entity, and some licences carry none.

The fifth mistake is to deposit before the agreement is read. The agreement names your counterparty, sets the protection terms and gives the complaint route. Read it before the money moves.

Who should be most careful

A trader who deposits a large sum should be the most careful, because the protection terms matter more as the stake grows. A trader who uses an EA should check the entity and the restricted list before the EA is connected, because an account that closes mid-test can strand open positions and leave a difficult withdrawal. A trader who has had a previous dispute with a broker should read the complaint route first, because the route is what they will use again.

A worked example of the five checks

Take a broker whose homepage shows three regulator logos. The first check is the regulation page. On that page, the broker lists one licence held by a named company, with a licence number. You write the company name and the number exactly as they appear, and you save the page with today’s date.

The second check is the register. You search the regulator’s register for the licence number, not the brand. The entry returns a firm name, and you compare it letter by letter with the name on the regulation page. Suppose the names differ only by the legal suffix. That is still a mismatch until you know which company is which, so you write it down and continue to the next check rather than assuming it does not matter.

The third check is the agreement. You open the client agreement and find the sentence that names the contracting company. In this example it names a different company from the one on the regulation page, registered in another country. That is the finding that changes the whole picture. The logos on the homepage belong to the group, and the company you would contract with is the one in the agreement.

The fourth check is the entity for your country. You ask the broker in writing which company serves clients in your country. The reply names the same company as the agreement, and you save it. If the reply names a third company, you go back to the register for that company and repeat the first two checks.

The fifth check is the protection terms. You find the compensation scheme for the contracting company. It may not exist, or it may cover a different client category or a lower amount than the logos suggest. You record exactly what it covers. If it covers less than you expected, you can still decide to trade, but you size your deposit to match what is actually protected.

Once the five checks are complete and written down, you have a picture you can defend. If one check fails, you have a specific question to ask, and you do not fund the account until the answer is in writing.

What to do this week

Start with one broker. Find the regulation page and save it. Copy the company name and the licence number into your checklist. Look the number up on the regulator’s register and save the entry. Open the client agreement and confirm that the company named in it matches the register. Read the protection terms and the complaint route, and write down the answers.

Then decide. If every check matches, you have verified the licence and the entity, and you can move to the demo test. If any check fails, do not deposit until you have an answer in writing.

The downloadable regulation verification checklist attached to this guide follows the same steps. Use one copy per broker, and keep it with the saved documents.

Where to go next on this site

Verification is one step in choosing a broker, and the other steps are covered on this site. Our best brokers for EA trading page applies these checks to the three brokers we have documented, and it explains how the ranking was reached. For the entity question on each one, read the RoboForex review, the Exness review and the XM review.

Once a broker passes the regulation check, the terms check comes next. Our guide to whether brokers allow EAs and scalping shows which clauses decide that. If your system needs a stable connection through the testing period, the VPS product page describes what a dedicated server does and does not change. For position sizing once the account is open, the pip calculator gives the pip value you need before you work out margin.

The bottom line

A broker’s regulation is verified when the licence number, the register entry, the company in your agreement and the protection terms all point to the same company. A logo does not do that job, and neither does a marketing page. Find the number, check the register, confirm the entity, read the protection and save the evidence.

Trading leveraged products carries a high risk of losing money quickly, and a regulated broker does not remove that risk. Only deposit money you can afford to lose, and only after the licence, the entity and the protection terms are confirmed in writing.