How to Verify a Broker's License in Ten Minutes.

Almost every broker website carries a line like "regulated by" followed by an authority and a reference number. Anyone can type that line. It is HTML. The number in it may belong to a company that no longer trades, to a different company with a similar name, or to a genuine firm that has nothing to do with the site you are reading. The register run by the regulator is the only version that counts, and consulting it is the entire exercise.

Step one: find the legal entity, not the brand

Brands are marketing. Licences belong to companies. Scroll to the footer and look for a sentence naming a limited company, a company registration number and a registered address. It will usually also appear on the first page of the client agreement and in the risk disclosure.

Large groups run several entities: one authorised in the EU, one in the UK, one offshore. Which one you sign with is decided by your country of residence, and the sign-up flow may route you somewhere different from the entity displayed most prominently on the home page. Before anything else, work out the exact company name that will appear on your account agreement. Everything after this step verifies that specific company.

Step two: search the regulator's own register

Go to the authority's website directly by typing the address rather than following a link from the broker. Every major regulator publishes a searchable register: the Financial Services Register in the UK, the CySEC register of regulated entities in Cyprus, ASIC Connect in Australia, and equivalents in each jurisdiction. Our walkthrough of the main regulator registers covers where each one lives and how its search behaves.

Search the company name and the reference number separately. If both return the same single record, you are on the right track. If the number returns a different company than the name did, stop there.

Step three: read the entry properly

Finding a record is not the finish line. Open it and read four things.

• Status. Authorised, and current. Registers also list firms whose permission has lapsed, been withdrawn, or been suspended, and those records stay visible with a historical date range attached.
• Permissions. A licence is a list of specific activities. "Dealing in investments as principal" and "arranging deals" are different permissions with different obligations. A firm authorised only to arrange or to advise is not authorised to hold your money and take the other side of your trade.
• Client money. Some entries state whether the firm may hold or control client money. This is what determines whether segregation rules apply to your deposit.
• Contact details and website. The register lists the firm's own registered address, phone and, on several registers, its approved domain names.

That last point is the one that catches the most common fraud. A clone firm copies a real company's name, number and address, then publishes its own website and bank details. The register entry looks perfect because it belongs to somebody else. Compare the phone number, address and domain on the register against the ones on the site in front of you. A mismatch is the answer.

Step four: check the word being used

"Licensed", "registered", "authorised" and "incorporated" are not synonyms, and marketing departments know it. A company registry entry means somebody paid to form a company; it grants no financial permissions at all. Registration with a financial intelligence unit for anti-money-laundering purposes is also not a trading licence. We pulled this apart in regulated versus unregulated brokers, because the wording gap is where most of the misleading claims sit.

Some jurisdictions issue what the industry loosely calls securities dealer licences with far lighter requirements than an EU or UK authorisation. That is a real licence, and it is worth knowing what it actually covers before assuming it carries similar protections. Our overview of offshore broker licences sets out the trade-off in recourse.

Step five: match the money to the entity

Open the account documents you are being asked to accept and check three names against each other: the entity on the register, the entity on the client agreement, and the beneficiary name on the deposit instructions. In a properly structured firm these line up, and payments go to a segregated client account in the firm's own name.

When the deposit instructions name a payment processor in an unrelated country, or worse, an individual, you are funding something other than the regulated entity you looked up. Ask why in writing. A firm with a clean structure answers that question in one email; the answer usually names the payment institution and explains the flow.

What the ten minutes buys you

You end up knowing which company holds your money, what it is permitted to do, whether that permission is live today, and whether a complaint has anywhere to go. In many regimes the last part includes an ombudsman and an investor compensation scheme with a stated limit; in others it does not exist at all.

Do the check again if the firm restructures. Group entities get migrated between jurisdictions, and clients are sometimes moved to a different company with a short notice email that reads like an administrative formality. It is not one. The counterparty on your agreement changed, and so did the rulebook sitting behind it.

"Type the regulator's address yourself. Half the fake broker sites I have looked at link straight to a page that mirrors the register, and it took thirty seconds to build."

— Roman Onta, Executive Director, SINGUARD

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