Forex broker licences

FCA

Strictest

Financial Conduct Authority

United Kingdom

The UK's financial regulator, among the strictest anywhere. Brokers must hold client money in segregated accounts and report their financial position regularly.

• •FSCS compensation up to £85,000
• •Retail leverage capped at 1:30
• •Negative balance protection required

ASIC

Strictest

Australian Securities and Investments Commission

Australia

Australia's markets regulator, and one of the licences Thai traders see most often because many large brokers hold it.

• •Retail leverage capped at 1:30 (since 2021)
• •Client money must be segregated
• •No compensation fund like the UK's

CFTC / NFA

Strictest

Commodity Futures Trading Commission / National Futures Association

United States

US rules are strict enough that most offshore brokers simply refuse US clients: very high capital requirements and tighter limits on how you may trade.

• •Leverage capped at 1:50 on majors
• •Hedging banned, FIFO order closing enforced
• •Broker history is searchable in NFA's BASIC system

FINMA

Strictest

Swiss Financial Market Supervisory Authority

Switzerland

Switzerland supervises forex brokers to banking standards, so very few hold this licence and those that do are usually sizeable financial institutions.

BaFin

Strictest

Federal Financial Supervisory Authority

Germany

Germany's financial regulator, working inside the EU-wide (ESMA) rulebook like other member states.

• •Retail leverage capped at 1:30 under ESMA rules
• •Negative balance protection required

Singapore's central bank doubles as the broker regulator — one of the hardest and strictest licences to hold in Asia.

• •Retail leverage capped at 1:20

JFSA

Strictest

Financial Services Agency

Japan

Japan oversees the world's largest retail forex market and caps leverage lower than most countries.

• •Retail leverage capped at 1:25
• •Client funds must be held with a third party

New Zealand's markets regulator, close to Australia in standards but without a leverage cap.

CIRO

Strictest

Canadian Investment Regulatory Organization

Canada

Canada's investment regulator (formerly IIROC); client assets are covered by the CIPF fund.

• •CIPF coverage up to CAD 1,000,000

CBI

Strictest

Central Bank of Ireland

Ireland

Ireland's central bank, which several brokers moved to for EU access after Brexit.

AMF

Strictest

Autorité des marchés financiers

FRFrance

France's markets regulator, inside the ESMA framework, and it publishes a public blacklist of unauthorised brokers.

CONSOB

Strictest

Commissione Nazionale per le Società e la Borsa

ITItaly

Italy's securities regulator, with the power to order unauthorised broker websites blocked.

CNMV

Strictest

Comisión Nacional del Mercado de Valores

ESSpain

Spain's securities regulator, under the same EU rulebook as other member states.

DFSA

Strictest

Dubai Financial Services Authority

AEDubai (DIFC), UAE

Regulates firms inside Dubai's DIFC free zone to a higher standard than most Middle East licences.

SFC

Strictest

Securities and Futures Commission

HKHong Kong

Hong Kong's securities and futures regulator — strict, and held by relatively few retail brokers.

CySEC

Properly regulated

Cyprus Securities and Exchange Commission

CYCyprus

The EU licence Thai traders meet most often: easier to set up in Cyprus than elsewhere in the EU, yet still bound by the same ESMA rules.

• •ICF compensation up to €20,000
• •Retail leverage capped at 1:30
• •Negative balance protection required

A real supervisor for South African brokers, but with no leverage cap — which is why leverage here runs far above Europe's.

Another EU licence brokers favour, under the same ESMA framework as Cyprus.

SEBI

Properly regulated

Securities and Exchange Board of India

INIndia

India allows only rupee-paired currencies traded on domestic exchanges; trading with offshore brokers is illegal there.

BAPPEBTI

Properly regulated

Badan Pengawas Perdagangan Berjangka Komoditi

Indonesia

Indonesia's futures trading regulator; brokers serving Indonesian clients must register with it.

Much easier to obtain than an EU licence but still carries audits and capital requirements; commonly used for high-leverage accounts.

Labuan FSA

Properly regulated

Labuan Financial Services Authority

Labuan, Malaysia

Malaysia's offshore financial centre — the closest of this group to Thailand, and used by several brokers serving Asian clients.

SCA

Properly regulated

Securities and Commodities Authority

AEUnited Arab Emirates

Regulates UAE brokers outside the DIFC zone, on lighter terms than the DFSA.

FSA

Offshore

Financial Services Authority Seychelles

SCSeychelles

One of the most common offshore licences: fast and cheap to obtain, allows very high leverage, and offers almost no recourse if the broker folds.

FSC

Offshore

Financial Services Commission Belize

BZBelize

A Central American offshore licence with low capital requirements and very limited client protection.

An easily obtained Pacific-island licence, usually paired with very high leverage. Treat it as background information, not a guarantee.

Be careful: this authority has publicly stated that it does not supervise forex business. A company registration here is not a forex licence and protects nothing.

Among the fastest and cheapest licences to obtain, increasingly seen on new brokers, with very little real supervision behind it.

BVI FSC

Offshore

British Virgin Islands Financial Services Commission

VGBritish Virgin Islands

A somewhat higher standard than other island licences, but still with no client compensation fund.

CIMA

Offshore

Cayman Islands Monetary Authority

KYCayman Islands

A global funds centre, so supervision is more serious than most islands — though for retail forex it still protects you less than Europe does.