How to Choose a Forex Broker: the Checks That Actually Matter (2026)

Almost every protection you will be shown while choosing a broker is real, and almost every one of them does less than it appears to.

That is not because brokers lie. It is because the reassuring words — regulated, licensed, segregated funds, client money protection — are technically accurate and much narrower than a reader reasonably assumes. We have now found the same shape four separate times, in four unrelated mechanisms, and none of them was chosen by us.

So this guide is not a list of features to compare. It is the set of checks that tell you what you are actually getting, in the order worth doing them.

Start With Which Company Will Hold Your Account

This is the check that makes every other check meaningful, and it is the one nobody performs.

A large broker is not one company. It is a group — often five or six separate legal entities in different countries, each with its own licence, its own regulator and its own client agreement. The brand on the website is shared. The company that takes your deposit is not.

Which entity you get depends on where you are and how you signed up. A broker can hold an excellent European licence and route an African client to an offshore subsidiary with a different one. Everything a licence gives you — supervision, capital requirements, dispute resolution, any compensation scheme — follows the entity, not the brand.

So before anything else: find the company name on the client agreement you are actually asked to accept, and check that it is the company whose licence you were shown.

How to Check a Licence Properly

Never take a licence number from the broker’s own footer. Look it up on the issuing authority’s register. Every regulator in our markets publishes one, and a number that does not resolve is the single loudest warning sign available to you.

Where to look, by market:

• South Africa — the FSCA’s FAIS register and, for CFDs specifically, the OTC Derivative Provider register. A broker offering CFDs to South Africans needs the ODP authorisation, not merely a FAIS licence.
• Kenya — the CMA’s licensee lists, which are published per licence category, and the category matters (see below).
• Nigeria — the SEC’s registered-operator search, plus its illegal-operator alerts.
• Ghana — SEC Ghana, which since its 2026 directive covers online trading platforms.
• Tanzania, Uganda — no licence of this kind exists, so there is nothing to look up. That is itself the finding, and our Tanzania and Uganda pages explain what follows from it. Forex regulation in Africa sets the seven markets side by side.

Read two registers, not one

A single register gives you a partial answer, and one real case shows how partial.

Basfour 3773 (Pty) Ltd appears on the FSCA’s ODP register with its application recorded as “Application Withdrawn”. Read alone, that looks like an ordinary commercial decision — a firm that started an application and changed its mind.

The same company appears on the FSCA’s enforcement register, trading as Oinvest, carrying an administrative penalty of R58,608,810.

Neither record tells that story by itself. An authorisation check that stops at one register is incomplete, and the two are usually published in different places by the same regulator.

The same logic applies to a withdrawn or lapsed authorisation. Withdrawn is not the same as absent and not the same as refused — it means the firm had the permission and gave it up, and why is rarely in the register.

What a Licence Category Tells You That “Regulated” Does Not

A licence is not one thing. In several of our markets the same regulator issues different classes of licence for the same activity, and the class decides something a reader cares about a great deal: whether the locally regulated company is the one on the other side of your trade.

Kenya makes this concrete. The CMA issues a dealing licence and a non-dealing licence for online forex broking. A dealing broker is your counterparty — when you win, that company pays. A non-dealing licence is an agency licence: the licensed Kenyan company is not your counterparty, and the risk sits with an offshore entity.

Fourteen firms hold the non-dealing licence. Two hold the dealing licence. The non-dealing list includes every large international broker with a Kenyan presence.

Where a broker is the dealing counterparty, that is worth knowing too — and the place to confirm it is the contract rather than the register. Capital.com’s Kenyan agreement states at clause 3.4 that the company is authorised “as a Dealing Online Foreign Exchange Broker, acting as principal and counterparty to the Client’s Transactions.” Three sources agreeing — register category, company announcement and governing contract — is the standard to hold out for, and the contract is the one that binds.

“Segregated Funds” Does Not Mean What It Sounds Like

This is the most widely repeated protection in the category and the most widely misunderstood, so it is worth being precise.

Segregation is real. Client money is held in accounts separate from the broker’s own funds, at licensed banks. That genuinely protects you from the broker spending your deposit on its own costs.

What it does not give you is a claim on a specific sum. Client money is normally held in omnibus accounts — pooled accounts containing money belonging to many clients at once. One broker’s Kenyan agreement states the consequence in its own words: funds may be held in “a pooled account with money belonging to other clients”, and “in case of default or insolvency of the Company, no single client will have a claim against a specific sum in a specific account.”

The same contract adds that if the bank fails, the client may have only an unsecured claim, that the company “does not accept any liability or responsibility for any resulting losses”, and that “the proportionate loss shall affect all of the Company’s Clients’ funds held in omnibus accounts.”

Compensation Schemes: Check Whose

A statutory compensation scheme — a fund that pays clients when an authorised firm fails — is one of the few protections that is worth exactly what it says. It is also one of the rarest, and it belongs to a jurisdiction rather than to a brand.

So the question is never “does this broker have investor protection”. It is “does the entity on my contract have it”.

A worked example of how this goes wrong. Capital.com publishes insurance cover promising that clients are “covered for losses in excess of $20,000, up to $1,000,000, in the unlikely event of insolvency”. That page identifies a Bahamas entity and names no Kenyan one anywhere. A Kenyan client, whose contract is with the Kenyan company, does not get it on anything published — and no investor compensation fund, protection scheme or insurance appears anywhere in the Kenyan agreement.

Nothing there is dishonest. The cover exists; it simply belongs to a different company in the same group. Attributing a group-level protection to a reader whose contract is with another entity is the most common serious error in this category, and it is made by nearly every page ranking for these searches.

Two further distinctions worth holding:

• A statutory scheme is not a private insurance policy. One is a legal entitlement; the other is a commercial arrangement with terms, limits and an insurer.
• A dispute-resolution body is not compensation. An ombudsman can order a firm to pay you. It cannot pay you if the firm has no money.

Negative Balance Protection: In the Contract, or Not at All

Leverage can take an account below zero — you can end up owing the broker money. Negative balance protection caps your loss at your balance.

It is a genuine and valuable protection. The only thing to check is where it is written. On a marketing page it is a statement of current practice that can change without notice. In the client agreement it is a term of your contract.

Capital.com’s Kenyan agreement carries it at clause 8.19: the client “cannot lose more than their investment”, and “any of your losses will be limited to your Account balance.” That is the version worth having. Ask for the clause number; if the answer is a help-centre article, you have been shown something weaker than you were promised.

How to Read a Warning List

Regulators publish lists of firms operating without authorisation. A broker appearing on one is a hard fact and an easy decision.

A broker’s absence from one is where readers go wrong, and the rule is not obvious: an absence only tells you something if the list has ever covered the kind of company you are looking up.

That single test changes the answer completely from market to market:

So “not on any warning list” is a sentence that means five different things across our seven markets, and in two of them it means nothing whatsoever. The useful check is always the positive one: confirm that the broker is authorised, and that the authorisation belongs to the entity on your contract.

What Trading Actually Costs

The spread a broker advertises is a floor, not an average. “From 0.2 pips” is the best case on the best day, and the figure you will actually meet is the typical or average spread, which is usually several times larger. Both numbers are often published by the same broker, on different pages, and never side by side.

That gap is worth checking yourself before you compare anything, because a broker with the lowest advertised floor is not necessarily the cheapest to trade. In our reviews we show both figures for exactly this reason.

Three other costs are easy to miss and add up faster than the spread:

• Swap or overnight financing, charged for every night a leveraged position is held — and often asymmetric, so the cost differs between a long and a short in the same instrument.
• Currency conversion, charged on the way in and again on the way out if your account is in dollars and your money is not. Ask for the conversion spread as a number. If the answer is a reference to another document, check that the document is published.
• Inactivity or dormancy fees, which apply to the account you stopped using rather than the one you are trading.

And a warning about a specific pattern: some brokers publish no limits, fees or processing times at all, stating that the figures appear inside your account. That means the two numbers you most need before depositing are visible only after you have signed up. It is legal and it is increasingly common, and it is a fact about that broker worth weighing.

Getting Your Money Out

The deposit is never the hard part. Plan the exit before you fund anything.

Check the rail, not only the broker. Mobile money has its own published ceilings, and they bind whatever the broker’s limits are. Safaricom publishes M-PESA maximums of KES 250,000 per transaction and KES 500,000 per day — so a Kenyan cannot move KES 300,000 in one transaction whatever a broker’s terms say, because the rail will not carry it. Those figures come from the payment provider, not the broker, which makes them both harder and easier to verify.

Read the withdrawal clauses in the agreement, which is where the conditions live rather than on the payments page. The recurring ones worth looking for: no withdrawals to a third party or an account in another name; a hold period after any security change; the company’s right to decline a method and offer another; and return-to-source rules on card-funded accounts, which can restrict where money may be sent after a period of inactivity.

Confirm which fees are passed on to you. A promise to cover third-party costs on a marketing page and a contractual right to debit charges to your account are two different statements, and the contract is the one that governs.

The Pattern Worth Carrying Away

Four unrelated mechanisms, one shape: a protection that reads stronger than it is.

1. A licence category — real supervision, and in fourteen Kenyan cases out of sixteen the supervised company is not your counterparty.
2. A local rule — regulation 16(4) binds the licensed Kenyan broker and not the unlicensed offshore one, so it narrows what the accountable firm may offer you.
3. Segregated funds — genuinely separated from the broker’s money, and pooled so that no client has a claim on a specific sum.
4. A regulator’s register — correct about the licence, and pointing at a website governed by a different company.

None of these is a scandal and none was chosen by us; it is what the documents keep saying. What they have in common is that the reassuring word is accurate and the reassurance it creates is not. Read the thing the word refers to, and you will be doing more than almost anyone else choosing a broker this year.