How to Verify a Broker’s Regulation (FCA, ASIC, CySEC): A Step-by-Step Safety Guide

Choosing an unregulated broker is like handing your wallet to a stranger. Scams, stolen funds, and manipulated trades are rampant in the Forex and CFD industry—but you can avoid them by verifying a broker’s license. In this guide, you’ll learn how to check regulation under top-tier authorities like the FCA (UK), ASIC (Australia), and CySEC (Cyprus), spot red flags, and protect your hard-earned money.

Why Regulation Matters

Regulated brokers must adhere to strict rules that protect traders, including:

• Segregated Client Funds: Your money is kept separate from the broker’s accounts.
• Compensation Schemes: Up to £85,000 (FCA) or AUD 250,000 (ASIC) if the broker goes bankrupt.
• Fair Trading Practices: No manipulation of spreads or execution.
• Transparency: Regular audits and financial reporting.

Unregulated brokers? They operate in the Wild West—zero accountability.

Step 1: Identify the Regulator

Brokers often claim to be “regulated,” but not all licenses are equal. Focus on these top-tier regulators:

1. FCA (Financial Conduct Authority) – UK
2. ASIC (Australian Securities and Investments Commission)
3. CySEC (Cyprus Securities and Exchange Commission)

Avoid brokers regulated only by offshore authorities like:

• VFSC (Vanuatu)
• FSA (Saint Vincent and the Grenadines)
• FSCA (Mauritius)

Step 2: Verify the License Number

Every regulated broker has a unique license ID. Here’s how to check it:

For FCA-Regulated Brokers

1. Go to the FCA Register.
2. Search by the broker’s name or license number (e.g., “123456”).
3. Confirm:

• The name matches exactly.
• “Status” is Authorized.
• “Permissions” include FX/CFD trading.

Red Flags:

• “EEA Authorised” (not UK-regulated).
• Clone firms with similar names (e.g., “eToro vs. eTorro”).

For ASIC-Regulated Brokers

1. Visit the ASIC Connect portal.
2. Use the “Professional Registers” search.
3. Enter the broker’s ACN (Australian Company Number) or name.
4. Confirm:

• The entity is listed under “Current AFS Licensees.”
• The license includes “Margin FX” or “Derivatives.”

Red Flags:

• “ASIC registration” ≠ “AFS License.” Registration alone doesn’t permit CFD/FX trading.

For CySEC-Regulated Brokers

1. Check the CySEC Register.
2. Search by name or license number (e.g., “123/12”).
3. Confirm:

• The broker’s CIF license is Active.
• “Services” include FX/CFDs.

Step 3: Cross-Check Broker Details

Scammers often clone legit brokers’ licenses. Verify these details match the regulator’s database:

• Company Name: “eToro (UK) Ltd” vs. “eToro LLC.”
• Website URL: Regulated brokers must list their licensed entity’s site (e.g., uk.eToro.com for FCA).
• Contact Info: Phone numbers and addresses should align with the regulator’s records.

Step 4: Look for Compensation Scheme Membership

Top regulators require brokers to join investor protection funds:

• FCA: Financial Services Compensation Scheme (FSCS).
• CySEC: Investor Compensation Fund (ICF).
• ASIC: No statutory compensation, but stricter capital requirements.

Check the broker’s “Legal” or “About Us” page for membership proof.

Step 5: Avoid These Scam Tactics

1. Fake Regulators:

• “CRFIN” (fake Russian regulator) or “CRF” (clone of CySEC).

2. Offshore Licenses:

• Brokers “regulated” in Belize, Cayman Islands, or Vanuatu.

3. Hidden Jurisdiction:

• A broker’s .com site may be unregulated, while .co.uk is FCA-regulated.

Case Study: Spotting a Scam Broker

Scenario: “GlobalFX” claims ASIC regulation (License #123456).

1. ASIC Check: License #123456 belongs to “Global Finance Pty Ltd,” not “GlobalFX.”
2. Website: No mention of AFSL or segregated accounts.
3. Red Flag: Pushes high returns with “zero risk.”

Verdict: Clone firm scam.

What If the Broker Isn’t Regulated?

Proceed with extreme caution. Ask:

• Are they transparent about their location?
• Do they offer negative balance protection?
• Are client funds segregated?

If unsure, pick a broker from our list of regulated brokers.

Regulator Comparison Cheat Sheet

Regulator	Compensation	Leverage Limits	Key Feature
FCA	£85,000	1:30 (Retail)	Gold-standard protection
ASIC	None	1:30 (Retail)	Strict capital requirements
CySEC	€20,000	1:30 (Retail)	EU passporting to other countries

Final Checklist Before Trading

1. Verified license on the regulator’s official site.
2. Matches in company name, URL, and contact details.
3. Segregated accounts and compensation scheme mentioned.
4. No offshore licenses or clone firm red flags.

Conclusion

Regulation is your first line of defense in the risky world of trading. A 5-minute check could save you from losing thousands to a scam. Bookmark the FCA, ASIC, and CySEC registers, and never skip due diligence—even if a broker “looks” trustworthy.

Need a Safe Broker? Explore our verified list of FCA, ASIC, and CySEC-regulated brokers.