Why ‘regulated’ does not always mean ‘protected’: the entity matters

Almost every broker says it is regulated. The useful question is which company holds your account and which regulator answers for it. In our reviews, the difference between entities under one brand was one of the biggest factors in how we scored regulation.

One brand, several companies

Large brokers usually operate a group of companies, one for each regulatory regime. When you open an account, you are placed with one of them, normally based on where you live. Each has its own licence, its own rules on leverage and its own compensation arrangements.

What the brokers themselves say

These examples come from the brokers’ own pages, as we read them in September 2026.

• Exness: its regulation page lists FCA and CySEC entities but says they do not offer trading services to retail clients. Its retail-serving entities are mainly in the Seychelles, Curaçao, the BVI, Belize and Mauritius, with an FSCA-licensed entity for South Africa.
• AvaTrade: its regulation comparison page states that its BVI entity is ‘not subject to European client protections’, while its Irish entity has negative balance protection and an investor compensation scheme.
• FXCM: its global site is operated by Stratos Global LLC in St Vincent and the Grenadines, which says it is not required to hold a financial services licence there. Its UK, EU, Australian and South African clients are served by separately regulated Stratos entities.
• HFM: its regulatory page lists FCA, CySEC and FSCA entities, but the international account pages we read say accounts are operated by HF Markets (SV) Ltd, which is listed without a regulator.
• IG: even at a group licensed in many jurisdictions, IG says there is no compensation scheme for its Australian, US or IG International entities, and UK clients have FSCS cover.

Why it matters

• Compensation: schemes such as the UK’s FSCS or the EU’s investor compensation funds only apply to firms and clients within their scope.
• Negative balance protection: mandatory for retail clients under UK, EU and Australian rules, but not necessarily elsewhere.
• Leverage and marketing rules: offshore entities can offer much higher leverage than regulated retail entities in the UK, EU or Australia.
• Complaints: which ombudsman or regulator you can go to depends on the entity.

What to do

1. Ask which legal entity your account will be opened with, before you deposit.
2. Find that entity on its regulator’s register (see how to check a licence).
3. Read what the client agreement says about compensation and negative balance protection.
4. If you are eligible for more than one entity, ask for the one with the strongest protections that suits you.

General information for education only, not financial advice. Trading forex and CFDs carries a high risk of loss. Read the disclaimer.