What is a regulated broker?

What it is

A regulated broker is one that is licensed and supervised by a recognised financial regulatory authority. In the UK, that authority is the Financial Conduct Authority (FCA). Regulation imposes rules on how brokers operate, how they handle client funds, and what happens if they fail.

Trading with an unregulated broker means your funds have no legal protection. If the broker goes bankrupt, is fraudulent, or simply disappears, you have very limited recourse. With a regulated broker, your funds are protected up to certain limits and the broker must follow strict rules about client money segregation.

How it works

Regulated brokers must:

Keep client funds in segregated accounts — separate from the broker's own operating funds
Maintain minimum capital requirements — proving they can meet obligations
Provide negative balance protection (EU/UK) — your losses cannot exceed your deposit
Submit to regular audits and reporting requirements
Participate in compensation schemes (in the UK: FSCS covers up to £85,000)

Key regulators by region

UK: FCA (Financial Conduct Authority) — register.fca.org.uk
EU/Cyprus: CySEC (Cyprus Securities and Exchange Commission)
Australia: ASIC (Australian Securities and Investments Commission)
Offshore: Various — FSA (Seychelles), VFSC (Vanuatu), BVI FSC — much lower standards

Why it matters

For EA traders, broker regulation is non-negotiable. Your capital sits in that account, sometimes with open positions running 24 hours a day without human supervision. You need to know that the broker is legitimate, properly capitalised, and that your funds are protected if something goes wrong with the business.

Beyond fund safety, regulated brokers offer better execution quality and are less likely to engage in practices like stop hunting or price manipulation that would interfere with your EA's performance.

How to check if a broker is regulated

Find the broker's regulatory number — it should be stated on their website footer
Visit the regulator's online register (e.g. register.fca.org.uk for the FCA)
Search for the broker's name or registration number
Confirm the authorisation status is "Authorised" and the permissions include retail forex trading

Common misconceptions

Being registered is not the same as being authorised. Some brokers list FCA registration (not authorisation) to appear regulated. An authorised firm can hold client money. A registered firm typically cannot.
Offshore regulation is not equivalent to FCA or ASIC. Seychelles, Vanuatu, and similar jurisdictions have minimal oversight and offer very limited client protection.

The Karnek note

Karnek is read-only monitoring for MetaTrader - it watches every account you run, live on one dashboard, and alerts you the moment something stops. It never trades and never asks for a trading password.

See it in Karnek: Karnek is read-only by design, it can never place, change or close a trade.