The Backcom VN editorial team
5 min read
In this article7
Every broker displays a licence. Verifying it takes ten minutes and needs no special knowledge —
only knowing where to look. This page gathers the directory and the process.
The four-step process
- Identify the entity you contracted with. Open the client agreement and find the
company name and place of registration near the front. It is usually not the entity advertised on the
home page. - Take the licence number for
that specific entity, usually in the footer. - Go to the relevant regulator’s site
in the table below and use its public register. - Match three things: does the entity name agree, is the licence current, and does
the permitted scope of services cover what you are using?
Step 4 is the most important and the most often skipped. There are cases where the licence number
is genuine but belongs to a different entity in the same group, or where the permitted scope does not
include retail derivatives.
Regulator directory
Strict tier
- FCA — United Kingdom. Search at register.fca.org.uk.
High capital requirements, compulsory
client-money segregation, a compensation scheme, a
retail leverage cap. - ASIC — Australia. Search at asic.gov.au, professional
registers. Firm capital and audit requirements, compulsory segregation. - CySEC — Cyprus. Search at cysec.gov.cy. Operating under
the common European framework, with a capped investor compensation fund.
Substantive but regional
- DFSA — Dubai International Financial Centre. Search at
dfsa.ae. - FSCA — South Africa. Search at fsca.co.za.
Offshore tier
- FSA — Seychelles. Search at fsaseychelles.sc.
- VFSC — Vanuatu. Search at vfsc.vu.
- FSC — Belize. Search at fscbelize.org.
This tier licenses with low capital requirements, usually no compensation scheme and limited
enforcement capacity. It does not automatically mean a bad broker — many large firms run
offshore entities — but your legal protection is markedly
weaker.
What clients outside the major jurisdictions need to know
A brokerage group usually runs several
entities. The UK entity serves UK clients, the Australian entity serves Australian clients, the
offshore entity serves everyone else.
Most international clients fall into the third group. The FCA licence on the home
page may not apply to your account at all — something you learn from the agreement, not the home
page.
Three questions you must be able to answer
- Which legal entity signed the agreement with me?
- Which regulator supervises that entity?
- Is my money segregated from the firm’s working capital?
If you cannot answer all three, you do not know what risk you are carrying — however many licences
the broker lists.
This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.
The Backcom VN editorial team
The Backcom VN editorial team tracks forex trading costs: the fee schedules, rebate levels and licences of eight brokers, together with the market figures that feed into the cost of each trade. Every number we publish carries a public source and the date it was accessed, so you can check it yourself.
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