KoboFX

Regulation: Why a License Protects Your Money

SchoolKindergarten01/01/2026
Portrait of Iriss Lee
By Founder & Editor3 years trading forex. Writes every KoboFX guide and review. Full profile →

Risk warning: A licence does not remove risk. It only adds rules. This is education, not financial advice.

A regulated broker holds a licence from a government body. That licence means rules.

LICENCEFCA / CySECLicence = rules$10 VAULTclient money, not mixedSeparate money
A licence locks three rules: your $10 sits in a separate client vault, the broker shows fees and handles complaints, and you gain a regulator to report to.

What a licence gives you

  • Separate money — your money (for example $10) stays in a client bank account. It is not mixed with the broker's money.
  • Rules to follow — the broker must show fees, handle complaints, and submit reports.
  • A place to complain — you can report the broker to its regulator.

Common licences beginners check: FCA (UK), CySEC (Cyprus), and sometimes ASIC (Australia) or FSCA (South Africa).

Some central banks limit how money moves overseas for forex trading. Most brokers beginners use are licensed outside their own country. That is common, but it makes checking the licence more important.

How to verify in 3 minutes

  1. Open the broker's "Regulation" or "About" page. Copy the licence number.
  2. Go to the regulator's website (FCA, CySEC) and search the number.
  3. Check the company name matches the broker exactly.

If the number is missing or does not match, do not fund. See How to Verify a Broker's Regulation (FCA, CySEC, CBN) and Unregulated Broker Scams.

Three checks, one match1. Broker pageLicence: C123456Regulator: FCA2. Regulator searchSearch: C123456Result found3. Match ✓Name matchesStatus: Licensed››Fictional numbers — use the real licence from the broker site
Copy the number, search it, match the name. Broker page, regulator result, and name must all agree before you fund.

What a licence does not do

  • It does not promise profit.
  • It does not stop market risk.
  • It does not guarantee fast withdrawal — but it gives you a path to complain.

For the full broker checklist, see The Complete Guide to Choosing a Forex Broker (2026) and The Complete Guide to Forex Safety (2026).

Bottom line: Choose a licensed broker that keeps client money separate and verified on FCA/CySEC, or you risk money with no complaint path. Related guides: Choosing a Forex Broker, Forex Safety and Avoiding Scams.