Check the regulation before you fund the account
Regulation is the single biggest factor in whether you get your money back if a broker fails or behaves badly. It's weighted 25% in our score — more than anything else. Here's what it actually protects, and how to verify it yourself.
Not all licences are equal
A licence from one regulator is not the same as a licence from another. The tier tells you roughly how much protection sits behind it.
Tier 1
Examples: FCA (UK), ASIC (Australia), BaFin (Germany), SEC/FINRA & CFTC/NFA (US)
The strictest regimes: high minimum capital, mandatory client-money segregation, conduct enforcement, and leverage caps for retail traders.
What it protects: Strongest day-to-day protection. Most (not all) tier-1 regimes also run a compensation scheme if the firm itself fails.
Tier 2
Examples: CySEC (Cyprus), FSCA (South Africa), DFSA (Dubai)
Real oversight and registers you can check, but lighter capital and compensation cover than tier 1. CySEC firms passport across the EU and carry the EU's €20,000 investor-compensation scheme.
What it protects: Meaningful, but read the detail — cover limits and enforcement are weaker than tier 1.
Offshore
Examples: FSA (Seychelles), FSC (Belize/Mauritius), VFSC (Vanuatu)
Light-touch jurisdictions used to offer very high leverage and looser rules. Often little real supervision of how client money is handled.
What it protects: Minimal. Usually no compensation scheme and limited recourse if something goes wrong. Treat with caution.
Three protections worth checking by name
“Regulated” is a spectrum. These are the specific protections that actually matter — and any of them can be missing even when a broker is technically licensed.
Compensation schemes
A backstop that pays you back — up to a cap — if the broker itself failsand can't return your money. It does not cover trading losses.
- · UK (FSCS): up to £85,000 per person
- · EU (ICF, via CySEC): up to €20,000
- · Australia (ASIC): no investor compensation scheme for retail FX/CFD losses
- · Most offshore: none
Segregated client funds
Your deposit is held in a separate bank accountfrom the firm's own money, so it can't be spent on the firm's costs and is ring-fenced if the firm collapses.
It's a baseline you should expect from any serious broker — but segregation quality varies, and it's not a guarantee against loss.
Offshore entities
The trap: a broker advertises an FCA or ASIC licence, then onboards international clients under a different offshore entity with higher leverage, weaker protection and no compensation scheme.
Check which entity your client agreement names and which regulator covers it — that's the one protecting your money, not the badge on the homepage.
Decode which entity may apply →How to verify a broker's licence in four steps
Takes about five minutes and is the single most useful safety check you can run before depositing.
Find the licence number and the legal entity
Look in the website footer or the 'Legal/Regulation' page, and in the client agreement you'd actually sign. Note the exact company name — not just the brand — and the licence number.
Open the regulator's own register
Go to the official register directly (links below) — never a link the broker hands you. Search the licence number or company name.
Match the entity, status and permissions
The company name and licence number must match exactly. Check the status is active/authorised and that the firm is actually permitted to deal in investments or derivatives — not just 'registered' for something unrelated.
Check the warning lists
Regulators publish lists of clone firms and unauthorised companies. Search the broker's name there too — scammers often copy a real firm's details.
Official registers
Always reach these by typing the regulator's name into a search engine yourself — not via a link supplied by the broker.
Red flags when you check
- · The licence number doesn't resolve, or points to a different company.
- · The entity in your client agreement isn't the one that's licensed.
- · The firm appears on a regulator's clone-firm or warning list.
- · The regulator named doesn't actually authorise forex/CFD dealing.
- · Leverage far above local caps (e.g. 500:1+) — a sign of an offshore entity.
Get the broker deposit checklist.
A plain-English checklist for checking regulation, fees, withdrawal terms, leverage risk and red flags before you fund an account.
Educational checklist only — not investment advice and no trading signals. We store your email to send the checklist; no spam. See our privacy policy.
Platforms by regulation score
Our regulation & safety score combines licence tier, fund segregation, compensation cover and negative-balance protection. Licence numbers below should be confirmed on the official register — they can change, and we show them so you can check.
Last updated June 2026·Regulatory details and licence numbers are reviewed periodically and can change — verify current terms with the broker before you deposit.·How we score
| Platform | Reg. score | Regulators | Segregated |
|---|---|---|---|
 Pepperstone | 93 | FCAASICCySEC+5 | Yes |
 IC Markets | 87 | ASICCySECFSA | Yes |
 FP Markets | 86 | ASICCySECFSCA | Yes |
 ThinkMarkets | 86 | FCAASIC | Yes |
 FXTM | 85 | FCAFSCACMA | Yes |
 Eightcap | 82 | ASICFCACySEC+1 | Yes |
 Vantage Markets | 80 | ASICFSCACIMA | Yes |
 XM | 80 | ASICCySECDFSA+1 | Yes |
 Exness | 78 | FCACySECFSCA+1 | Yes |
 Blueberry Markets | 76 | ASIC | Yes |
 VT Markets | 76 | ASICFSCAFSC | Yes |
 StarTrader | 66 | FSCAFSC | Yes |
 RoboForex | 60 | FSC | Yes |
 PU Prime | 60 | FSCACMA (UAE)FSA+1 | Yes |
 LiteFinance | 58 | CySECMISA | Yes |
This page is educational and not financial or legal advice. Regulation reduces certain risks; it never makes trading safe. Always confirm a broker's current licensing on the regulator's official register before you deposit.