In short
- Check the firm on your regulator's official register yourself, not through links the firm sends you.
- Watch for clone firms that copy a real company's name and licence number.
- Understand what protection applies if the firm fails, and what does not.
- Test withdrawals early, and walk away from any firm that pressures you.
1. Is the firm authorised where you live?
This is the check that matters most. Go directly to your regulator's website and search its register for the firm's name. Examples include:
- United Kingdom: the FCA Financial Services Register
- European Union: the national regulator in each country, for example CySEC in Cyprus or BaFin in Germany
- Australia: ASIC's professional registers
- United States: NFA BASIC for forex dealers, and FINRA BrokerCheck for stock brokers
- Canada: the Canadian Investment Regulatory Organization and provincial securities commissions
For crypto exchanges, rules vary more. In the EU, crypto-asset service providers are being licensed under the MiCA regulation; in the UK, crypto firms must be registered with the FCA for anti-money-laundering purposes. A firm regulated only in a small offshore jurisdiction gives you far less protection than one authorised by your home regulator.
2. Is it the real firm, or a clone?
Clone firms copy a genuine company's name, address and registration number to look legitimate. Compare the website address, phone number and email domain on the official register with the ones you have been given. If they differ, contact the firm using the register's details only. The FCA and other regulators publish warning lists of known clones and unauthorised firms.
3. Is your money kept separate?
Regulated brokers in many countries must keep client money in segregated accounts, separate from the company's own funds. Ask how and where client money is held, and with which banks.
4. What happens if the firm fails?
Compensation schemes cover some failures but never trading losses. The UK's FSCS can cover eligible investment claims up to £85,000 per person per firm. In the US, SIPC protects securities accounts up to $500,000 (including $250,000 cash) but does not cover forex. Crypto held on an exchange is usually not covered by any scheme.
5. Is there negative balance protection?
In the UK, EU and Australia, retail clients of CFD providers cannot lose more than the money in their account. Elsewhere, a sudden gap could leave you owing money. Confirm this before trading leveraged products.
6. What does it really cost?
Compare spreads, commissions, overnight financing, currency conversion, inactivity and withdrawal fees. Headline "zero commission" offers often mean wider spreads. Our guide to trading fees shows how to add them up.
7. How do withdrawals work?
Read the withdrawal terms before you deposit. Legitimate firms return money to the same account it came from, within stated timeframes, without surprise "taxes" or "release fees". Consider making a small withdrawal soon after your first deposit to check the process works.
8. How are orders executed?
Some providers pass your orders to the market; others take the other side themselves. Regulated firms must publish an order execution policy explaining how they handle conflicts of interest. Read it.
9. Is the leverage offered legal for you?
If a firm offers retail clients in the UK or EU leverage far above 30:1 on major currency pairs, it is either not authorised there or treating you as a professional client, which removes protections. Our margin calculator shows what different leverage levels mean in practice.
10. How do they talk to you?
Be wary of cold calls, messages from strangers on social media or dating apps, "account managers" who push you to deposit more, promised returns, and pressure to act today. Those are hallmarks of fraud, covered in detail in how to spot trading scams.
A quick checklist
- Found on my regulator's register, with matching website and contact details
- Not on the regulator's warning list
- Client money segregated; compensation scheme and negative balance protection understood
- Total costs compared, including overnight fees
- Withdrawal terms read and a small test withdrawal completed
- No pressure, no promised returns, no requests for passwords or recovery phrases
Why we don't publish a forex brokers list
Search for a forex broker or FX broker and you will find endless "top 10" tables. Most are paid placements: the site earns a fee for every account opened. A forex brokers list tells you who pays the most, not who is safest for you. The checks on this page work on any name you are considering, including ones in those lists.
Frequently asked questions
How do I know if a forex broker is regulated?
Search the firm's name on your regulator's official register, reached by typing the regulator's web address yourself. Check that the website and contact details on the register match the ones you are using.
Are offshore brokers safe?
Some are legitimate businesses, but offshore regulation usually offers far weaker protection, and it can be very hard to recover money if something goes wrong. Many investment scams claim offshore licences that turn out to be fake or meaningless.
Does regulation protect me from trading losses?
No. Regulation and compensation schemes protect you against misconduct or the firm failing, not against losing money on trades.
Sources
- FCA Financial Services Register
- FINRA BrokerCheck
- NFA BASIC
- FSCS: investments