Forex broker due-diligence checklist

Print this page or copy the checklist below, and work down it before you fund any account. It is the do-it-yourself companion to broker regulation explained and the wider how to choose a broker guide: those pages tell you what the checks mean, this one is the list you actually tick.

What should you verify before depositing with a broker?

Regulation is the single most important thing to confirm — a broker with tight spreads and a slick platform is worth nothing if it is not licensed and cannot be made to return your money. Every claim on a broker's website is marketing until you have confirmed it on the authority's own database. Tick each box:

• Write down the broker's exact legal entity name and its licence or registration number (usually in the website footer or a page marked "Regulation" or "Legal").
• Open the regulator's own register by typing the address yourself — never follow a "verify us here" link supplied by the broker.
• Search the register by the licence number, then again by the entity name; both must return the same firm.
• Confirm the entity that will take your deposit is the licensed one — many groups route new clients to an offshore entity the top-tier licence does not cover.
• Check the licence actually covers your product and your country (for most beginners that means margin FX or CFDs offered to retail clients where you live).
• Read the regulator's disciplinary actions, warnings and current status for the firm — and, where the register shows them, for its named principals.
• Confirm on the regulator's site how client money is held and whether any compensation scheme applies — read this on the authority, not on the broker's marketing.
• Deposit a small amount first and request a withdrawal before adding more; deposits that clear instantly while withdrawals stall are a warning sign.
• Save a dated screenshot of the register result and the withdrawal terms, so you have your own record of what you were told.

Where is the regulator's official register?

Each serious authority publishes a free public register. Use the one for your own country where you can — local enforcement is easier to reach — and type the address into your browser yourself rather than trusting a link. These five are a starting point, not the whole world:

A word on that last row, because it catches beginners everywhere: being listed on a register is not the same as holding a licence. New Zealand's Financial Service Providers Register, for instance, records that a firm exists and has met basic procedural steps; issuing derivatives to residents additionally requires a licence from the FMA. Some firms register in a country purely to borrow its credibility. Confirm the licence that covers your product, not merely that the name appears somewhere.

Why is each check on the list?

Every line removes one specific way people lose a deposit. Checking the register rather than the website exists because a logo and a number are trivial to copy, so the claim is never the proof. Matching the exact entity is there because the most common trap is a well-known top-tier licence held by one company in a group while a different, offshore company is the one that actually takes your money — the badge is real, but it does not cover you. Confirming the product and country catches licences that exist but do not extend to retail clients where you live. Reading the disciplinary history tells you how the firm and the people behind it have behaved before. And the withdrawal test is the check scammers cannot fake: the classic pattern is a deposit that clears in seconds and a withdrawal that meets endless friction, so proving you can get a small amount back out — before you scale up — is worth more than any review. One teaching source also advises against funding an account with a credit card; treat that as risk guidance, since it means trading with money you do not have and it removes the chargeback route a card would otherwise give you. None of this predicts whether your trades will win — it decides whether your money is somewhere you can get it back.

What if you cannot verify the broker's licence?

If the firm or its number does not appear, appears under a different entity, or the licence does not cover your product or country, treat that as your answer and stop — an unverifiable licence is a red flag, not a formality. Prefer a broker regulated in your own jurisdiction where enforcement is within reach, test everything on a demo account before real money, keep more than one broker rather than everything in one place, and never deposit money you cannot afford to lose. Pair this with the pre-trade checklist and size every position with the position size cheat sheet; the site's risk disclosure explains why most beginners lose money regardless of who they trade with.

Frequently asked questions

Sources

• FirstPip knowledge base — Why broker regulation matters (S012, S013)
• FirstPip knowledge base — How to choose a forex broker and avoid scams (S012, S013)
• FCA — How to check a firm is authorised (Financial Services Register)
• NFA — BASIC (Background Affiliation Status Information Center), investor FAQs
• ASIC — Professional registers search
• MAS — Financial Institutions Directory

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