Check regulatory status
Use official registers to verify whether a firm is authorised or registered before paying any fees. In the UK, the FCA Firm Checker shows if a firm has permission for specific activities, while the Financial Services Register contains full regulatory records including historic disciplinary action. Remember that registration for anti-money laundering purposes does not grant the same protections as full authorisation. If a firm is listed as no longer authorised or revoked, avoid dealing with it entirely.
Verify firm details
Cross-check contact details on official registers against what the firm provides directly. Some unauthorised operations pose as clone firms, copying genuine authorised businesses to deceive traders. The FCA warns that contact details on its registers are supplied and confirmed by firms themselves, so verify these independently. Most authorised firms must update or confirm contact information at least once annually.
Understand evaluation structure
Prop firms typically require traders to complete evaluation challenges before accessing simulated funded accounts. According to FTMO, its challenges utilise demo environments that simulate real market conditions including fees, spreads and swaps. Traders should confirm whether the programme uses one-step or multi-step evaluation processes, what trading objectives apply, and which platforms are available.
Confirm your protections
Your access to complaint mechanisms and compensation schemes depends on the firm's exact regulatory status and your jurisdiction. The FCA states that using an unauthorised firm means you likely cannot access the Financial Ombudsman Service or the Financial Services Compensation Scheme. If dealing with an appointed representative, verify with the principal firm what activities are permitted and how you would be protected if something goes wrong.
Review risk disclosures
Read original terms carefully to identify what capital is simulated versus real, what fees are non-refundable, and how reward calculations work. FTMO describes its accounts as entirely simulated trading capital where traders use platforms like MetaTrader or cTrader. Check whether downside risk is limited to entry fees or extends further, and understand any scaling or progression paths offered.
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