Check UK Authorisation
Before using any UK-based financial firm, verify its status through the FCA Firm Checker or Financial Services Register. These tools reveal whether a firm is authorised to offer specific products, merely registered for supervision, or operating without permission. An authorised firm must meet standards set by the regulator and has permission to provide regulated services, which gives you access to the Financial Ombudsman Service and the Financial Services Compensation Scheme if problems arise. The Register also shows historical fines, whether a firm can handle client money, and if its authorisation has been revoked. Contact details displayed are supplied by the firm itself, so compare these against any details you have received to guard against clone firm scams.
Verify Australian Licences
For CFD providers operating in Australia, confirm they hold an Australian financial services licence through ASIC's Professional Registers Search. ASIC requires CFD issuers to hold an AFS licence and meet financial resource and client money handling requirements. Dealing with an unlicensed overseas provider means Australian consumer protections, including access to the Australian Financial Complaints Authority, will not apply. The source warns that absence of an AFS licence could indicate a scam. Additionally, check how you would be classified, as wholesale client status removes protections such as negative balance protection and external dispute resolution rights.
Understand Protection Limits
Protection availability depends on both the firm's regulatory status and the specific service you want. In the UK, registered firms supervised for anti-money laundering purposes cannot offer regulated products, and you lack FSCS or Ombudsman protection if they fail. For appointed representatives or agents, the principal firm bears responsibility, but only for activities it has approved, so confirm the scope of permission directly with the principal. In Australia, retail CFD clients receive mandatory negative balance protection and margin close-out rules, though these safeguards do not eliminate the fundamental risks of leveraged trading. Always verify which protections apply to your situation before committing funds.
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