Best Regulated Brokers 2024
We strongly recommend that traders only use regulated trading platforms. Why? Authorization from a respected regulator is the best sign that you can trust a broker and that it operates a fair trading environment.
Choosing a well-regulated broker also reduces the risk of falling victim to trading scams, which have plagued the industry in recent years. In 2023, the FCA in the UK issued a record 2,285 scam warnings, while the FBI in the US reported investment scam losses of $4.57 billion, up from $3.31 billion the previous year.
Explore our pick of the best regulated brokers. We’ve verified the regulatory credentials of every platform listed.
Top 10 Regulated Brokers
Our tests show these 10 regulated brokers and trading platforms are in a league of their own:
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1FOREX.comRegulated by: NFA, CFTCActive Trader Program With A 15% Reduction In Costs
Ratings
$1000.01 Lots1:50NFA, CFTCForex, Stocks, Futures, Futures OptionsMT4, MT5, TradingView, eSignal, AutoChartist, TradingCentralWire Transfer, Credit Card, Debit Card, Visa, Mastercard, Skrill, Neteller, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, PLN -
2NinjaTraderRegulated by: NFA, CFTC
Ratings
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire TransferUSD -
3eToro USARegulated by: SEC, FINRAInvest $100 and get $10https://www.daytrading.com/ is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
Ratings
$10$10SEC, FINRAStocks, Options, ETFs, CryptoeToro Trading Platform & CopyTraderACH Transfer, Debit Card, PayPal, Wire TransferUSD -
4OANDA USRegulated by: NFA, CFTCCFDs are not available to residents in the United States.
Ratings
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
5DNA MarketsRegulated by: ASIC
Ratings
$1000.01 Lots1:500ASICCFDs, Forex, Indices, Commodities, Stocks, CryptoMT4, MT5Credit Card, Debit Card, Wire Transfer, BPAY, Skrill, Neteller, Bitcoin Payments, Bitwallet, AstroPay, MastercardUSD, EUR, GBP, CAD, AUD, NZD, SGD -
6IGRegulated by: FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOBForex trading involves risk. Losses can exceed deposits.
Ratings
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOBCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
7Pocket OptionRegulated by: MISA50% Deposit Bonus
Ratings
$50$1MISABinary Options, Currencies, Commodities, Stocks, Indices, CryptosWeb, MT4, MT5Wire Transfer, Credit Card, Bitcoin Payments, Volet, Perfect Money, Visa, Mastercard, Debit Card, WebMoney, FasaPay, Ethereum Payments, Maestro, JetonCashUSD -
8IQCentRegulated by: IFMRRC20% to 200% Deposit Bonus
Ratings
$250$0.011:500IFMRRCBinary Options, CFDs, Forex, Indices, Commodities, CryptoOnline Platform, TradingViewCredit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, MastercardUSD, EUR -
9Interactive BrokersRegulated by: FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA
Ratings
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMAStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
10Plus500 USRegulated by: CFTC, NFAWelcome Deposit Bonus up to $200Trading with leverage involves risk.
Ratings
$1000.0 LotsCFTC, NFAFutures on Forex, Commodities, Cryptos, Indices, Interest RatesWebTrader, AppACH Transfer, Wire Transfer, Debit Card, Mastercard, VisaUSD
This is why we think these brokers are the best in this category:
- FOREX.com - Founded in 1999, FOREX.com is now part of StoneX, a financial services organization serving over one million customers worldwide. Regulated in the US, UK, EU, Australia and beyond, the broker offers thousands of markets, not just forex, and provides excellent pricing on cutting-edge platforms.
- NinjaTrader - NinjaTrader is a US-headquartered and regulated brokerage that specializes in futures trading. There are three pricing plans to suit different needs and budgets, as well as ultra-low margins on popular contracts. The brand's award-winning charting software and trading platform also offers a high-degree of customization and superb technical analysis features.
- eToro USA - eToro is a social investing platform that offers short-term and long-term trading on stocks, ETFs, options and crypto. The broker is well-known for its user-friendly community-centred platform and competitive fees. With FINRA and SIPC oversight and millions of users across the world, eToro is still one of the most respected brands in the industry. eToro securities trading is offered by eToro USA Securities, Inc.
- OANDA US - OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
- DNA Markets - DNA Markets is a forex and CFD broker established in 2020. The broker operates two entities in Australia and the offshore jurisdiction, St Vincent and the Grenadines. Traders can access 800+ markets, with a Standard account for beginners and a Raw account for experienced traders. The reliable MetaTrader 4 and MetaTrader 5 platforms are available, alongside Signal Start.
- IG - Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand-US offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
- Pocket Option - Established in 2017, Pocket Option is a binary options broker offering high/low contracts on forex, stocks, indices, commodities and cryptocurrencies. With over 100,000 active users and a global reach, the platform continues to prove popular with budding traders.
- IQCent - IQCent is an offshore binary options and CFD broker based in the Marshall Islands. The brand continues to offer a range of unique account types with bonuses and perks, including payout boosts, TradeBacks and free rollovers. With 100+ assets, around-the-clock trading and 98% payouts, the firm is popular with aspiring short-term traders.
- Interactive Brokers - Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
- Plus500 US - Plus500 is a well-established broker that entered the US market in 2021. Authorized by the CFTC and NFA, it provides futures trading on forex, indices, commodities, cryptocurrencies, and interest rates. With a 10-minute sign-up, a manageable $100 minimum deposit, and a straightforward web platform, Plus500 continues to strengthen its offering for traders in the US.
Best Regulated Brokers 2024 Comparison
FOREX.com
"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."
Christian Harris, Reviewer
FOREX.com Quick Facts
Bonus Offer | Active Trader Program With A 15% Reduction In Costs |
---|---|
Demo Account | Yes |
Instruments | Forex, Stocks, Futures, Futures Options |
Regulator | NFA, CFTC |
Platforms | MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral |
Minimum Deposit | $100 |
Minimum Trade | 0.01 Lots |
Leverage | 1:50 |
Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN |
Pros
- There’s a wealth of educational resources including tutorials, webinars, and a stacked YouTube channel to help you get educated in the financial markets.
- The in-house Web Trader continues to shine as one of the best-designed platforms for aspiring day traders with a slick design and over 80 technical indicators for market analysis.
- Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
Cons
- There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.
- Despite increasing its range of instruments, FOREX.com's product portfolio is still limited to forex and CFDs, so there are no options to invest in real stocks, real ETFs or real cryptocurrencies.
- FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
Demo Account | Yes |
---|---|
Instruments | Forex, Stocks, Options, Commodities, Futures, Crypto |
Regulator | NFA, CFTC |
Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
Minimum Deposit | $0 |
Minimum Trade | 0.01 Lots |
Leverage | 1:50 |
Account Currencies | USD |
Pros
- NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
- You can get thousands of add-ons and applications from developers in 150+ countries
Cons
- The premium platform tools come with an extra charge
- There is a withdrawal fee on some funding methods
- Non forex and futures trading requires signing up with partner brokers
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
Rebecca Holden, Reviewer
eToro USA Quick Facts
Bonus Offer | Invest $100 and get $10 |
---|---|
Demo Account | Yes |
Instruments | Stocks, Options, ETFs, Crypto |
Regulator | SEC, FINRA |
Platforms | eToro Trading Platform & CopyTrader |
Minimum Deposit | $10 |
Minimum Trade | $10 |
Account Currencies | USD |
Pros
- eToro USA Securities is a trustworthy, SEC-regulated broker that is a member of FINRA and SIPC
- A free demo account means new users and prospective day traders can try the broker risk-free
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
Cons
- There's no MetaTrader 4 platform integration for traders who are accustomed to using third-party charting tools
- Average fees may cut into the profit margins of day traders
- There's a narrower range of day trading instruments available compared to competitors, with only stocks, ETFs and cryptos
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
Rebecca Holden, Reviewer
OANDA US Quick Facts
Demo Account | Yes |
---|---|
Instruments | Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA) |
Regulator | NFA, CFTC |
Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
Minimum Deposit | $0 |
Minimum Trade | 0.01 Lots |
Leverage | 1:50 |
Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- OANDA is a reliable, trustworthy and secure brand with authorization from tier-one regulators including the CFTC
- The broker's API facilitates access to 25 years of deep historical data and rates from 200+ currencies
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
Cons
- It's a shame that customer support is not available on weekends
- There's only a small range of payment methods available, with no e-wallets supported
- The range of day trading markets is limited to forex and cryptos only
DNA Markets
"DNA Markets is an excellent choice for short-term traders familiar with the MetaTrader platforms. The smooth sign-up process also makes it easy to get started while the $100 minimum deposit is accessible. That said, DNA Markets trails the top brokers in education, research and mobile trading. "
Jemma Grist, Reviewer
DNA Markets Quick Facts
Demo Account | Yes |
---|---|
Instruments | CFDs, Forex, Indices, Commodities, Stocks, Crypto |
Regulator | ASIC |
Platforms | MT4, MT5 |
Minimum Deposit | $100 |
Minimum Trade | 0.01 Lots |
Leverage | 1:500 |
Account Currencies | USD, EUR, GBP, CAD, AUD, NZD, SGD |
Pros
- DNA Markets offers top-rate platforms and charting tools for day traders with access to MT4 and MT5
- The broker provides 24/5 customer support with response times of <2 minutes during testing
- You can access low trading fees with spreads from 0.0 pips in the Raw account and zero non-trading fees
Cons
- Although it continues to strengthen its client base and reputation, DNA Markets lacks the track record of top brokers like Vantage
- Despite access to MT4 and MT5, there is no proprietary trading app for seamless account management whilst on the go
- Unlike many alternatives, there are limited educational and research tools for traders seeking an all-in-one solution
IG
"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."
Christian Harris, Reviewer
IG Quick Facts
Demo Account | Yes |
---|---|
Instruments | CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting |
Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB |
Platforms | Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral |
Minimum Deposit | $0 |
Minimum Trade | 0.01 Lots |
Leverage | 1:30 (Retail), 1:250 (Pro) |
Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
- The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our Best Trading App award
Cons
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
- While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients
- IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors
Pocket Option
"Pocket Option excels for its easy-to-use web platform which provides a best-in-class user experience for short-term binary traders. The $50 minimum deposit is also accessible for beginners while opening an account is really easy. Looking at the negatives, Pocket Option still trails alternatives in its market offering and regulatory credentials."
Rebecca Holden, Reviewer
Pocket Option Quick Facts
Bonus Offer | 50% Deposit Bonus |
---|---|
Demo Account | Yes |
Instruments | Binary Options, Currencies, Commodities, Stocks, Indices, Cryptos |
Regulator | MISA |
Platforms | Web, MT4, MT5 |
Minimum Deposit | $50 |
Minimum Trade | $1 |
Account Currencies | USD |
Pros
- The MetaTrader platforms offer integrated analysis with helpful technical summaries for short-term traders
- The range of payment methods beats the majority of rivals, providing fast, secure and convenient deposits for traders in most countries
- The web platform shines for its straightforward design and usability that will appeal to beginners looking to speculate on popular financial markets in a few clicks
Cons
- The MISA is a weak regulator with limited investor protection for retail traders
- The maximum binary contract length of 4 hours is restrictive for longer-term trading strategies. Alternatives like Videforex offer binaries up to 1 month
- You need to deposit $1000 to access the extended list of 250+ assets, otherwise just 130+ assets are available
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
Rebecca Holden, Reviewer
IQCent Quick Facts
Bonus Offer | 20% to 200% Deposit Bonus |
---|---|
Demo Account | Yes |
Instruments | Binary Options, CFDs, Forex, Indices, Commodities, Crypto |
Regulator | IFMRRC |
Platforms | Online Platform, TradingView |
Minimum Deposit | $250 |
Minimum Trade | $0.01 |
Leverage | 1:500 |
Account Currencies | USD, EUR |
Pros
- IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders
- CFD trading fees are competitive based on tests, including 0.7 pips on major forex pairs such as EUR/USD
- The proprietary terminal offers TradingView-powered charts which deliver dozens of technical indicators and studies
Cons
- There's no automated trading support for algo traders
- The broker is not overseen by a respected regulator, though this is common among binary options firms
- The market analysis is very basic with limited technical summaries and insights from analysts
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
Demo Account | Yes |
---|---|
Instruments | Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies |
Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA |
Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
Minimum Deposit | $0 |
Minimum Trade | $100 |
Leverage | 1:50 |
Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- There's a vast library of free or paid third-party research subscriptions catering to all types of traders, plus you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
- The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.
Cons
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
- You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
Plus500 US
"Plus500 US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills."
Michael MacKenzie, Reviewer
Plus500 US Quick Facts
Bonus Offer | Welcome Deposit Bonus up to $200 |
---|---|
Demo Account | Yes |
Instruments | Futures on Forex, Commodities, Cryptos, Indices, Interest Rates |
Regulator | CFTC, NFA |
Platforms | WebTrader, App |
Minimum Deposit | $100 |
Minimum Trade | 0.0 Lots |
Account Currencies | USD |
Pros
- The straightforward account structure, pricing model and web platform offer an easier route into futures trading than rivals like NinjaTrader
- Plus500 is a publicly traded company with a good reputation, over 24 million traders, and a sponsor of the Chicago Bulls, instilling a sense of trust
- The Futures Academy is an excellent resource for new traders with engaging videos and easy-to-follow articles, while the unlimited demo account is great for testing strategies
Cons
- Plus500 US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders
- Although support response times were fast during tests, there is no telephone assistance
- While Plus500 US continues to broaden its investment offering, it's currently restricted to around 50+ futures with no stocks
How Did We Choose The Best Regulated Brokers?
To find the best regulated trading brokers, we:
- Took our database comprising around 500 online brokers and trading platforms;
- Pinpointed those that are regulated after verifying their credentials on the respective regulator’s databases;
- Sorted them by their rating which balances 100+ data entries with the personal observations of our testers.
All Regulators
- Australian Securities and Investments Commission (ASIC) Brokers 2024
- Canadian Investment Regulatory Organization (CIRO) Brokers 2024
- Capital Markets Authority (CMA) Brokers 2024
- Central Bank of Ireland (CBI) Brokers 2024
- Commodity Futures Trading Commission (CFTC) Brokers 2024
- Cyprus Securities and Exchange Commission (CySEC) Brokers 2024
- Dubai Financial Services Authority (DFSA) Brokers 2024
- European Securities and Markets Authority (ESMA) Brokers 2024
- Federal Financial Supervisory Authority (BaFin) Brokers 2024
- Financial Conduct Authority (FCA) Brokers 2024
- Financial Industry Regulatory Authority (FINRA) Brokers 2024
- Financial Markets Authority (AMF) Brokers 2024
- Financial Sector Conduct Authority (FSCA) Brokers 2024
- Financial Service Board (FSB) Brokers 2024
- Investment Industry Regulatory Organization Of Canada (IIROC) Brokers 2024
- Japan Financial Services Agency (FSA) Brokers 2024
- Monetary Authority of Singapore (MAS) Brokers 2024
- National Commission for Companies and the Stock Exchange (CONSOB) Brokers 2024
- National Securities Market Commission (CNMV) Brokers 2024
- New Zealand Financial Markets Authority (FMA) Brokers 2024
- Securities And Exchange Board Of India (SEBI) Brokers 2024
- Securities and Exchange Commission of Brazil (CVM) Brokers 2024
- Securities And Futures Commission Of Hong Kong (SFC) Brokers 2024
- Swiss Financial Market Supervisory Authority (FINMA) Brokers 2024
- The Securities Commission Malaysia (SC) Brokers 2024
- US Securities and Exchange Commission (SEC) Brokers 2024
- Vanuatu Financial Services Commission (VFSC) Brokers 2024
Do I Need A Regulated Broker?
Yes. If you want to trade on a secure trading platform then selecting a regulated broker is a no-brainer.
Sometimes traders may opt for an unregulated broker to access trading promotions or high leverage that aren’t permitted in tightly regulated jurisdictions, but we do not recommend this, especially for newer traders.
There are three key reasons why you should choose a regulated broker:
- Protection: Many regulators require authorized brokers to provide retail traders with access to compensation in the event the firm is unable to meet its financial obligations, negative balance protection to prevent traders losing more than their deposited funds, and to operate segregated accounts so client funds cannot be misused. For example, the Securities Investor Protection Corporation (SIPC) in the US provides up to $500,000 per person and the Financial Services Compensation Scheme (FSCS) in the UK provides up to £85,000.
- Transparency: Regulators normally require brokers to be transparent about trading fees, order execution, and risks, all of which are critical considerations for day traders. For example, in the European Union (EU), regulated brokers are required to publish the percentage of losing traders on their website, especially when using complex products like contracts for difference (CFDs), which are popular with active traders.
- Security: Regulated brokers are often required to implement systems to protect your data, notably encryption protocols and security audits. For example, the ASIC in Australia requires multi-factor authentication for digital transactions while the FCA in the UK requires brokers to adhere to strict rules under the General Data Protection Regulation (GDPR).
For these reasons, I only deposit funds with regulated brokers. As a UK-based investor, this means I hold my capital with FCA-regulated trading platforms.
Are All Brokers Created Equal?
Where things get slightly tricky is that simply choosing any ‘regulated broker’ isn’t enough.
This is because not all regulatory bodies offer the same levels of protection. There is a common misconception that financial agencies supervise brokers across numerous jurisdictions. However, often regulatory remit is limited to those brokers with a license issued within the regulator’s jurisdiction.
Therefore, bodies outside your financial jurisdiction may not provide such extensive legal recourse should there be an issue, be it access to investor compensation or formal dispute channels. For example, the JFSA in Japan offers up to ¥10,000,000 per investor through its Investor Protection Fund (IPF), however it’s primarily available to residents.
Equally, financial agencies enforce varying degrees of regulations. For instance, all FCA brokers must segregate trader’s funds. Whereas offshore bodies like the FSC of Mauritius may not enforce this regulation. Furthermore, FCA brokers must automate and process client withdrawals promptly, while offshore brokers have been known to delay withdrawals, which can be extremely frustrating.
To help you understand which regulators are ‘good’ and crucially – which aren’t, we’ve drawn upon our collective decades working in the trading industry and personal experiences using various trading platforms to classify regulators based on the level of protection they provide:
- Green Tier: These regulators provide the strongest investor safeguards and actively oversee authorized brokers. Notable examples include the SEC in the US, FCA in the UK and ASIC in Australia.
- Yellow Tier: These regulators still provide strong investor safeguards and monitor authorized brokers but not always to the same degree as ‘green tier’ regulators. Notable examples include the FSCA in South Africa, the SEBI in India, and the DFSA in Dubai which is becoming increasingly popular as established brokers like Plus500 have been looking to expand their presence in the Middle East.
- Orange Tier: These regulators provide limited investor safeguards and scrutiny of authorized brokers, requiring caution before signing up. Notable examples include the BMA in Bermuda, the BOB in Botswana and the BCE in Ecuador.
- Red Tier: These regulators provide little to no investor safeguards and we consider them high-risk. Notable examples include the VFSC in Vanuatu, the FSA in Seychelles, and the SCB in the Bahamas.
I recommend extreme caution when dealing with brokers registered with ‘red tier’ regulators. They are sometimes used by scammers to strip traders of any legal protections they may be afforded in well-regulated regions.In one high-profile case, the bad actors behind trading firm EverFX, convinced aspiring investors to move their funds to offshore entities where there was little to zero regulatory oversight.
The global scamming network is estimated to have made off with up to an eye-watering $1 billion.
How Can I Check If My Broker Is Regulated?
Checking whether a broker is regulated is incredibly straightforward, with an increasing number of financial bodies operating digital, publicly accessible databases where you can input a trading firm’s details.
You’ll normally need to follow a few simple steps:
- Navigate to the respective regulator’s database (usually searchable on the agency’s website)
- Enter the broker’s company name or license number (often found at the bottom of the broker’s website)
- Read the search results to confirm they are authorized (check which investment services and where they are permitted to do business)
I have personally checked the regulatory details of hundreds of brokers on countless regulators’ databases, from the US and UK to Europe, Australia and beyond.To show you how it’s done, below you can see the results of a search I ran on XTB, which claimed to be authorized by the CySEC.
Bottom Line
Choosing a regulated trading platform should be your first priority. It’s a win-win for both traders and brokers.
For traders, it’s the best indication a firm can be trusted to operate in a fair manner. For brokers, regulatory oversight helps build a solid reputation and reduces the need to constantly try and undercut competitors in areas like leverage limits.
Picking a regulated broker is also especially important given the increasing sophistication of trading scams we’ve been witnessing with alarm in recent years, capitalizing on the growing class of ‘finfluencers’ and interest in artificial intelligence (AI).
Use our list of top regulated day trading platforms to be sure a broker is regulated.
FAQ
What Is Trading Regulation?
Regulatory bodies and watchdogs supervise financial markets and online brokers. They enforce a range of rules and regulations to protect retail traders.
The Markets in Financial Instruments Directive (MiFID), since replaced by MiFID II, is the closest the world has got to an overarching regulatory system. It was brought into the UK in 2007 and has been the bedrock of Europe’s financial regulatory systems since.
What Is A Regulated Broker?
Regulated brokers receive a license to operate within that jurisdiction, so long as they adhere to specific rules and regulations, often designed to protect retail traders and the functioning of financial markets.
What Is An Unregulated Broker?
Unregulated brokers operate without having to adhere to a set of guidelines. Arguably, therefore, they do not have the same interest in safeguarding your interests. This allows them to offer attractive features like high leverage and welcome bonuses, but the catch is limited legal protection for your funds.
Which Is The Best Regulated Broker?
Use our list of the top regulated brokers to find a trading platform that best suits your needs. Our experts have independently verified the regulatory credentials of every broker recommended.
Article Sources
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