Check Regulatory Status
Verify the broker's authorisation through official registers before depositing funds. In the UK, use the FCA Firm Checker to confirm whether a firm is authorised or merely registered, since registered firms cannot provide regulated products and services requiring authorisation. Check that the firm has permission for the specific services you need. Avoid unauthorised firms or those lacking correct permissions. Match contact details against the register rather than trusting broker-provided information alone, as clone firms may impersonate genuine authorised firms.
Review Account Terms
Read the original product disclosure statement and terms and conditions carefully. Every CFD issuer maintains its own terms, so understand how the provider determines prices, handles client money, and calculates fees. Check whether the documents explain commissions, spreads, and overnight financing charges. Ask the provider to clarify any unclear provisions before agreeing to trade.
Confirm Client Category
Check how the broker classifies you in the original account terms. In Australia, retail clients receive negative balance protection and margin close-out protection, while wholesale clients may lose these safeguards. Verify your classification in writing and understand which protections apply to your account type. Do not assume standard protections apply without checking the original terms.
Assess Dispute Recourse
Check the original terms for jurisdiction and available recourse. In Australia, overseas providers without an Australian financial services licence leave you without AFCA access. In the UK, unauthorised firms deny you Financial Ombudsman Service and Financial Services Compensation Scheme protection. Verify licensing through official registers rather than relying on provider claims about jurisdiction or coverage.
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