Broker Checklist: How to Check a Forex Broker Before You Open an Account

Why do due diligence on a broker

Forex broker due diligence means checking a firm's identity, licence and conditions yourself instead of trusting its advertising. If you are asking how to choose a forex broker, this check comes before platforms or spreads.

Leveraged forex and CFD trading can lose money fast, sometimes more quickly than you expect. A weak or fake broker adds a second risk: you may be unable to get your money back.

Pakistan: read this first

Before you check any offshore broker, know the local position:

• The supervisor for securities and futures is the Securities and Exchange Commission of Pakistan (SECP), with trading in listed securities and commodities only via SECP-licensed securities and futures brokers.
• On approval status: per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan
• On protection: per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse
• On remittances: per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1))
• On residents' purchases: per the SBP, the purchase of offshore forex/margin/CFD products by Pakistani residents violates section 4(1) of FERA 1947
• On licensing: under the Futures Market Act 2016, s.47(1), no one may carry on a regulated activity (futures broker, adviser, representative) without an SECP licence. The penalty: under the Futures Market Act 2016, s.104(3), operating without a licence carries, for an individual, a fine of up to PKR 250 million or up to 3 years' imprisonment, or both.

For locally licensed firms, per the SECP, lists of licensed brokers are on the PSX and PMEX websites. Read more in Law and regulators and Offshore vs Onshore. Get independent legal advice if you are unsure how these rules apply to you.

The checklist

Print this section or copy it into a notebook. Tick each line only when you have checked it yourself.

Legal entity

• I know the full legal name of the company that will hold my money.
• I know the country where that company is registered.
• The entity named in the client agreement matches the entity named on the website footer.
• I know which entity applies to clients from my country, as groups often run several entities.

Licence

• I know which regulator licenses that exact entity.
• I know the licence or reference number the broker quotes.
• I understand what that regulator does and does not protect. See What Regulation Protects.
• I know whether client funds are kept separate from company money. See Segregated Funds.
• I know whether any compensation scheme covers me. See Compensation Schemes.

Register check

• I searched the regulator's own public register, not a link sent by the broker or by someone in a chat group.
• The name, number, address and website on the register match the broker.
• The register lists the website domain I am actually using.
• I checked the regulator's warning list for clones using the same name.

Step-by-step guides for each register: FCA Register, CySEC Register, FSCA Register, FSA Seychelles Register, FSC Mauritius Register, CMA Kenya Register and Other Regulator Registers. Open each regulator's official site by typing its address yourself. The general method is on Verify a Broker.

Terms and documents

• I read the client agreement, especially the parts on governing law, disputes and account closure.
• I read the risk disclosure.
• I understand margin call and stop-out. A margin call is a warning that your equity is low. Stop-out is the level where the broker closes positions automatically.
• I know the leverage limits that apply to my entity. See Leverage Limits.
• If there is any bonus, I read its conditions in full. See Trading Bonuses.

Costs

• I know the spread (the difference between buy and sell price) on the instruments I plan to trade.
• I know whether a commission is charged per lot.
• I know the swap (overnight fee) rules. See Swap fees.
• I know about deposit, withdrawal, inactivity and conversion fees.
• I checked my costs with the Calculators.

Withdrawals

• I know which withdrawal methods are offered and whether they must match the deposit method.
• I know which documents are needed for verification. See KYC and AML.
• I know the stated processing times and who is responsible for delays.
• I am ready to test a small withdrawal before trading larger sums.

Reviews, read with caution

• I treat reviews as signals, not proof. Both fake praise and fake complaints exist.
• I look for repeated, specific patterns such as blocked withdrawals, not single angry posts.
• I ignore claims that a firm is a scam unless an official source says so.
• I checked regulator warnings. In Pakistan these include SECP warnings by press release naming platforms (Quotex 09.04.2025; IBKR look-alikes, IGIL Securities, BMA Capital No.108 etc. 22.05.2025; Hillhouse Capital, S-169 Wharton 13.01.2026), none of which names Exness.

Red flags that end the check

• Guaranteed or fixed returns. See Guaranteed Profit Claims.
• Someone offering to trade for you. See Managed Account Risks.
• Contact only through WhatsApp or Telegram. See Fake Signal Groups.
• Lookalike domains or apps outside official stores. See Clone Sites and Fake Apps.
• Pressure to deposit more before you can withdraw.
• Offers to recover lost money for a fee. See Recovery Scams.

More signs are listed on Scam Warning Signs. If something has already gone wrong, see Report a Scam and File a Broker Complaint.

Frequent questions

What is the best way to check a broker?

No single check is enough. The most reliable starting point is the regulator's own register, compared line by line with the broker's legal documents.

Does a licence abroad make a broker legal in Pakistan?

Not by itself. Read the SBP and SECP positions in the section above and in Law and regulators.

Is a link to the register on the broker's site enough?

No. Open the regulator's official site yourself, because clone sites can copy register pages.

Can I trust online reviews?

Use them with caution. Rely on patterns and official warnings, not on individual posts.

Should I protect my account after opening it?

Yes. Turn on two-step login protection where it is available. See Two-Factor Authentication and Phishing and Fake Logins.