How to Check a Broker's Licence

Before you open an account, find out exactly which company you will be dealing with. Many brokers operate several companies in different countries under one brand, each with a different regulator and different protections. The company name and licence number should be shown at the bottom of the broker's website and in its account-opening documents.

Next, check that company on the regulator's own public register, not just on the broker's website. For example: the FCA Financial Services Register in the UK, the FSCA in South Africa, CySEC in Cyprus or ASIC in Australia. Make sure the name, licence number and website address on the register match the broker you are signing up with, and look out for regulator warnings about clone firms that copy a real broker's details.

Finally, understand what protection you actually get. Strongly regulated firms usually keep client money in segregated accounts, offer negative-balance protection to retail clients and may be covered by a compensation scheme. Offshore entities often offer higher leverage but far fewer protections, so read the client agreement before you deposit.