Regulator basics — FCA, CySEC, ASIC, SEC, FINRA

Regulation is not a guarantee, but it is the single most reliable trust signal you can use. Regulated brokers have to meet capital, conduct and disclosure standards, and most regulators provide a compensation scheme that returns at least some client money if the broker fails.

The Financial Conduct Authority (FCA) regulates UK firms and operates the Financial Services Compensation Scheme, which covers up to £85,000 of eligible client funds per person per failed firm. The FCA imposes strict leverage limits on retail forex/CFDs (30:1 on majors), bans certain bonus schemes, and maintains an open public register at fca.org.uk you can search in seconds.

CySEC is the Cyprus Securities and Exchange Commission. Many EU-passported brokers are based in Cyprus because CySEC is a relatively economical place to obtain a licence while still passporting across the EEA. CySEC enforces the same EU-wide ESMA leverage limits and offers an Investor Compensation Fund of up to €20,000.

ASIC (Australia), SEC (US securities) and FINRA (US broker-dealers) operate similarly, with their own caps and protections. The SIPC scheme in the US covers up to US$500,000 of securities and US$250,000 of cash if a broker fails. FINRA also runs BrokerCheck — an excellent free service for verifying registered persons.

Three habits. First, verify the licence number on the regulator’s public register, not on the broker’s own site. Second, read what the licence actually permits — many “regulated” brokers hold a licence that does not cover the products they market to you. Third, remember that regulation does not protect you from market losses, only from broker misconduct.