Regulation guide

What is a regulator?

A financial regulator is a government or quasi-government body that supervises brokers. They enforce capital requirements, license standards, segregation of client funds, complaint handling, and sometimes offer statutory investor compensation if a broker fails.

Tier 1 — Strong oversight

Top-tier regulators (FCA, ASIC, BaFin, MAS, CySEC) conduct active supervision and offer some form of investor compensation. Examples:

• FCA (UK) — £85,000 per claimant via FSCS
• ASIC (Australia) — Segregated funds required; no statutory compensation
• BaFin (Germany) — €100,000 deposit protection

Tier 2 — Mid-tier

Adequate regulation but typically no compensation scheme. Examples: FSCA (South Africa).

Tier 3 — Light-touch

Limited regulatory supervision. Examples: IFSC (Belize).

Offshore / Unverified

Offshore jurisdictions like St. Vincent & the Grenadines do not regulate FX trading at all. "SVG FSA" registrations are company registry listings, not financial regulation. Brokers using these designations are not subject to capital or conduct rules, and offer no investor protection if they fail.

EU passporting

Brokers regulated by an EU member state (commonly CySEC) can "passport" their services to other EEA countries. This means a CySEC-regulated broker can serve German, French, and Italian clients. The home regulator (CySEC, in this case) remains the primary supervisor.

Multi-regulation

Many serious brokers hold multiple licenses (e.g. Exness holds CySEC, FCA, FSA, CMA). This gives clients access to multiple compensation schemes and means the broker is supervised by more than one authority. It's a positive signal.