Licenses and regulation

A license is not a quality rating. It is a set of enforceable obligations: how client money must be held and separated from company funds, what capital the firm must maintain, how orders must be executed and reported, what must be disclosed to clients before they trade, and what happens to client assets if the firm fails.

Those obligations matter most at the moment they are tested — a disputed execution, a delayed withdrawal, an insolvency. A regulated firm has a supervisor who can compel answers and a rulebook that defines what it owed you. An unregulated one has neither, whatever its marketing says.

Not all licenses carry the same obligations. Regimes differ in the capital they require, whether client money segregation is mandatory or optional, whether negative balance protection is guaranteed, whether there is a compensation scheme if the firm fails, and how actively the supervisor examines firms rather than simply registering them.

This is why 'regulated' on its own tells you very little. The useful questions are: regulated by whom, under which category of license, covering which activities, and what does that specific regime require of the firm. A broker that answers those plainly is easier to assess than one that shows a badge.

Every genuine regulator publishes a public register. Take the license number a firm states, search it on the regulator's own website — not a link the firm provides — and confirm three things: the entity name matches exactly, the license is current rather than lapsed, and the permissions cover the activity being offered to you.

Watch for the common gap between a group's marketing and the entity you actually contract with. The company named in your client agreement is the one whose license governs your account, and it is not always the one whose name appears on the advertising. Read the agreement before you fund the account.

Our standard on this site is simple: a regulatory fact appears only when it can be verified against the authority that issued it. Where a detail is not yet confirmed, the page says so rather than filling the space with something that reads well.

That applies to every credential — licensing, registration, capital, memberships, and awards. If a claim is not visible in our footer or our legal documents, we are not making it. You should hold every broker you consider to the same test.