Explainer · Costs & Regulation
How to check if a broker is regulated
A broker's website can say anything. The regulator's own register is the only place that can confirm a firm is authorised, and even then you need to check that you are really dealing with that firm.
Quick answer
Search the regulator's own register for the firm's exact name and licence number, then contact the firm only through the details listed there [3]. Check warning lists too. Regulation does not protect you from trading losses [8].
Key points
- Use the official register, not a link or licence number the firm sends you: the FCA says to use only the contact details on its Register [3].
- Clone firms copy a real firm's name, address and reference number, so a matching name is not enough [3].
- UK consumers reported losses of more than £78 million to clone-firm scams in 2020 [3].
- Warning lists such as IOSCO's I-SCAN gather alerts from over 150 regulators, but a firm missing from them is not proof it is licensed [7].
- Compensation schemes cover a failed firm's missing assets up to a limit, not market losses [2].
On this page
Why does it matter whether a broker is regulated?#
A licence means a regulator has checked the firm and can act against it. For US futures and forex firms, the CFTC notes that registration means principals and associated persons have completed background checks [1]. In the UK, compensation from the FSCS is only possible when the PRA or FCA authorised the firm and regulated the service it provided [2].
Regulation is not a promise that the firm will not fail or that you will make money. It is the minimum you should check before sending any deposit. Scammers know this, which is why some copy real, regulated firms instead of hiding that they are unlicensed.
Where can you check a broker's registration?#
Each country has its own register, and some products have their own. The table lists official tools that our sources describe. Go to the regulator's site by typing the address yourself or using a search engine, not by following a link in an email or advert.
| Market | Official tool | What it shows |
|---|---|---|
| US stockbrokers | FINRA BrokerCheck | Registration, 10 years of employment history, licences, and disclosures such as customer disputes and disciplinary events [4] |
| US futures and forex | NFA BASIC and cftc.gov/check | Registration and disciplinary history [1] |
| United Kingdom | FCA Register and FCA Warning List | Whether a firm is authorised, its official contact details, and firms to avoid [3] |
| Australia | ASIC Professional Registers and the Moneysmart Investor Alert List | Australian financial services licensees, their listed websites, and suspicious firms [5] |
| EU crypto firms | ESMA interim MiCA register | Authorised crypto-asset service providers and non-compliant entities [6] |
| Worldwide warnings | IOSCO I-SCAN | Firms reported as unlicensed or as a scam by over 150 regulators [7] |
Registers cover different products. A firm licensed for one activity may not be licensed for the product it is selling you.
For crypto platforms in the EU, ESMA says firms already operating under national law before 30 December 2024 could continue until 1 July 2026 at the latest, or until their MiCA authorisation was granted or refused [6]. Our guide to crypto regulation covers the rest of that framework, and is a crypto exchange safe covers the checks that go beyond a licence.
How do you check a broker step by step?#
- Find the legal name and licence number
Look for the company name and registration or licence number in the firm's terms or website footer. A brand name alone is not enough.
- Search the regulator's own register
In Australia, Moneysmart says to search ASIC's Professional Registers by name, business number or licence number [5]. Do the same on the register for your country.
- Check the permissions
Make sure the licence covers the product you want to trade, such as forex, CFDs or crypto.
- Read the disciplinary record
BrokerCheck reports include a disclosure section on customer disputes and disciplinary events [4]. A clean record does not make a firm suitable for you.
What is a clone firm, and how do you spot one?#
The FCA defines clone firms as fake firms set up by scammers using the name, address and Firm Reference Number of real companies it has authorised [3]. If you search the register for the name you were given, you find a real, authorised firm. The trap is that you are not talking to it.
What does regulation not protect you from?#
Market losses are yours. SIPC, which protects customers of failed US brokerage members, states it does not protect against a decline in the value of your securities, and its cover excludes commodity futures and foreign exchange trades [8]. Its limit is $500,000, including $250,000 for cash [8]. The UK's FSCS covers up to £85,000 per eligible person per firm for firms that failed on or after 1 April 2019, and does not accept claims for poor investment performance [2].
For off-exchange forex in the US, the CFTC is blunt: your deposits are not protected, and if a dealer disappears or goes bankrupt you may not get your money back [1]. For crypto, the FSCS said in May 2023 that cryptoassets generally are not protected by the FCA or FSCS [9].
Which red flags suggest an unregulated broker?#
- Leverage above the legal limit. The CFTC calls leverage higher than US law allows (2% margin on major currency pairs, 5% on others) a red flag [1].
- Contact details that differ from the register. A clone firm uses its own phone and email, not the real firm's [3].
- A website address not listed on the register. ASIC's guidance is to compare the register's URLs with the ones you are using [5].
- First contact through social media. The CFTC warns that many frauds begin there [1].
- Pressure to deposit before you can check. Any firm that will not give you its legal name and licence number has failed the first step.
High leverage is also a cost problem, not only a regulatory one. Our explainer on what is a cfd shows how a small price move can wipe out a deposit.
Mistakes beginners make when checking a broker#
- Trusting a logo or licence number on the website
Anyone can copy those. Clone firms use a real firm's name and reference number [3]. Check the register yourself.
- Stopping when the name matches
A match only proves the real firm exists. Contact it through the register's details, not the ones you were given [3].
- Reading 'regulated' as 'protected from losses'
Compensation schemes cover missing assets of a failed firm up to a limit, not falling prices [8].
- Treating a clean record as a recommendation
A register entry and an empty disciplinary file say nothing about whether the product suits you or what it costs.
Frequently asked questions#
Is a broker regulated offshore as safe as one regulated in my country?
Our sources do not compare offshore regulators, so we cannot rank them. What you can check: whether a regulator in your own country authorises the firm, and whether the protections listed on this page apply to your account.
Does a regulated broker guarantee my deposit?
What should I do if I find a firm on a warning list?
Do not deposit. Regulators publish these lists so investors can avoid firms reported as unlicensed or as scams [7]. If you have already paid, contact your bank and report it to your regulator.
How often should I recheck a broker?
Whenever something changes: a new website, a new contact person, a request to send money somewhere new. Registers update, and so do clone-firm tactics.
The bottom line#
Checking a broker comes down to five habits: find its legal name and licence number, search the regulator's own register, match the website and contact details, search the warning lists and read any disciplinary record. Then remember what the licence does not do. It does not protect you from losses on your trades, and compensation for a failed firm has limits. Read our risk disclosure before trading, and price the costs of any account with our guide to trading fees explained.
Sources
- Customer Advisory: Eight Things You Should Know Before Trading Forex.
- Investments | FSCS (What we cover).
- FCA issues warning over 'clone firm' investment scams.
- About BrokerCheck | FINRA.org.
- Check before you invest - Moneysmart.gov.au.
- Markets in Crypto-Assets Regulation (MiCA) | ESMA.
- IOSCO launches new alerts portal to help combat retail investment fraud.
- What SIPC Protects.
- Five things to consider about cryptoassets.
Education only. This page is not investment, tax or legal advice. Trading and crypto can lose you money. See our risk disclosure.
