Legal Entities and Licences

One brand, several companies

A large broker might have a UK company licensed by the FCA for UK clients, a Cyprus company licensed by CySEC for the European Union, an Australian company under ASIC, and a Seychelles or Mauritius company for everyone else. They share a name, a website and a platform, but they are legally distinct, with different capital, different rules and different protections. The offshore entity typically offers higher leverage and bonuses precisely because its regulator allows them.

Finding your entity

• The website footer lists the group's licensed companies and, often, which regions each serves.
• The account application names the entity in the client agreement you accept.
• The regulator's register shows the licensed company name, which should match.
• If the footer names five regulators but your agreement is with the sixth, unlisted company, ask why.

How onboarding steers you

Many brokers route clients by country of residence. A German resident is offered the EU entity and 1:30 leverage. A Kenyan resident is offered the offshore entity and 1:500. Some brokers let clients choose, and a few nudge clients towards the offshore entity with higher leverage and promotions. Choosing the entity with the strongest regulator available to you usually costs some leverage and gains a great deal of protection.

Reading a licence number

A licence number is only useful if you check it against the regulator's own register. The number on a broker's website can be copied from a genuine firm by a fake one; the register cannot. The lesson on checking a broker shows the process.

Key takeaways

• A broker brand is several licensed companies; you contract with one.
• Your protections come from that entity's licence, not the brand's best licence.
• Find the entity in the client agreement and check it on the regulator's register.