What Is a Regulated Broker? What Regulation Covers
A regulated broker is one authorised by a financial supervisory authority in a specific jurisdiction, which sets binding rules on how it holds client money, how much leverage it may offer, and what it must disclose. Regulation constrains the broker's conduct and solvency; it is not an endorsement of its pricing, its execution or its platform. It protects the money in your account against the broker's failure and misconduct, and does nothing at all about the money you lose trading.
How it works
A licence typically imposes some combination of the following: minimum regulatory capital, segregation of client funds in accounts separate from the firm's own money, periodic reporting and independent audit, a compensation scheme that pays out if the firm becomes insolvent, access to an ombudsman for disputes, caps on retail leverage, negative balance protection, and restrictions on how the firm may advertise.
The specifics vary by regime. Stated factually, without ranking:
| Authority | Jurisdiction | Typical retail features |
|---|---|---|
| FCA | United Kingdom | Segregated funds, FSCS compensation up to £85,000, leverage capped at 30:1 on major FX, negative balance protection |
| CySEC | Cyprus (EU) | Segregated funds, Investor Compensation Fund up to €20,000, the same 30:1 major FX cap under EU rules |
| ASIC | Australia | Segregated funds, 30:1 cap on major FX since 2021, no statutory compensation scheme |
| CFTC / NFA | United States | Roughly 50:1 on major FX, FIFO order handling, no hedging, no compensation scheme |
| BaFin, FSCA, and offshore regimes | Germany, South Africa, Seychelles, Belize and others | Requirements range from EU-equivalent to considerably lighter |
Two practical points. First, caps and compensation limits change, so the regulator's own public register is the only current source. Second, regulation attaches to a legal entity, not to a brand: large groups operate several entities under different licences, and the one named on your client agreement is the one whose rules apply to your money — often not the one in the advertising.
Why it matters
Segregation decides whether your balance still exists if the broker fails. The leverage cap decides how far price can move before a margin call. The compensation scheme decides what happens after insolvency, up to a limit that is usually far below a funded trading account.
None of it touches performance. A fully regulated broker will process a losing strategy exactly as efficiently as a profitable one, and a licence tells you nothing about spread, swap or execution quality — the three costs that actually differ between firms.
What the data shows
Across the 10,000+ accounts connected to ShowMyTrades (August 2026), trades arrive from 703 distinct broker servers. That is the practical scale of the problem: seven hundred different sets of conditions behind superficially identical account pages.
Traders treat those differences as real. 429 users run accounts at more than one broker, and 699 run more than one account — comparing the same strategy across firms is a routine use of the platform, not an edge case.
Regulation and evidence are separate questions, and both are thinly held: of the 10,000+ published accounts, 65 carry Track Record Verified and 264 carry Trading Privileges Verified. A licence says the broker is supervised. Verification says the numbers on the page came out of that broker rather than out of a form.
Where you see it on ShowMyTrades
- The account header carries a broker badge, with the trade server name in its tooltip, read from the terminal rather than typed in by the owner. Next to it sit the platform, the account currency, the leverage in force, and whether the account is a Real Account, a Demo Account or a Contest Account.
- The Terminal panel shows the live connection to that trade server — Ping, Retransmission and connection state — which is how the same strategy at two brokers stops being an argument and becomes a comparison.
- The Track Record and Trading Privileges badges in the same header carry the separate claim: Track Record verification means the data comes from the broker over a read-only investor connection, and Trading Privileges verification means the publisher proved control of the account.
We report which broker and server an account trades on. We do not rate brokers, rank regulators, or check licences — that is the regulator's register, not ours.
Common misunderstandings
- "Regulated" is not a single status. It is per entity and per jurisdiction, and the offshore arm of a well-known brand carries offshore protections, not the parent's.
- A licence is not a performance guarantee. No regulator insures you against your own strategy.
- Compensation schemes cover insolvency, not losses, and they are capped well below the size of many funded accounts.
- High leverage is not by itself evidence of a bad broker. It tells you which regime the entity sits under, which is a different fact.
For what to check before trusting any published record, read the guide on verified vs unverified track records.
Related terms
Margin Call
A margin call is the broker's warning that your equity no longer covers your open positions. The margin level formula, the stop-out sequence, and real data.
Spread
A spread is the gap between the bid and ask price, the cost you pay to enter a trade. Here is how it works, what it costs per lot, and why brokers differ.
Verified Track Record
A verified track record is performance data pulled straight from the broker through a read-only link, continuously, with nothing the publisher can edit.
Leverage
Leverage is the ratio between position size and the capital backing it. Here is the margin formula, a worked example, and drawdown data from thousands of accounts.