What does "regulated broker" mean?
A regulated broker is a firm that holds a licence from a financial authority and must follow that authority's rules. The regulator can inspect the firm, fine it, limit its business or withdraw the licence.
A licence is tied to a specific legal entity and a specific country. Many broker groups run several entities. Each entity has its own licence, rules and level of client protection. So the useful question is not "is this broker regulated?" but "which entity holds my account, and which regulator licenses that entity?"
Regulation protects you against some kinds of broker misconduct and broker failure. It does not protect you from losing money on your trades.
- Find the company's legal name and licence number on its website.
- Search that number on the regulator's official register.
- Compare the name, website address and contacts with the register entry.
- Check which company would actually serve clients from your country.
- Search the regulators' warning lists for the name and the website.
What regulation usually requires
Rules differ between regulators. The table shows the main areas most of them cover.
| Area | What it means | What it protects against |
|---|---|---|
| Capital requirements | The firm must hold a minimum amount of its own money | A thin firm collapsing after a few bad days |
| Segregation of client funds | Client money is kept in separate accounts, away from the firm's own money | The firm using client money for its own costs or creditors claiming it |
| Audits and reporting | Accounts are audited, and the regulator receives regular reports | Hidden losses or misreported client balances |
| Conduct rules | Fair pricing, clear risk warnings, proper order execution | Misleading marketing and unfair treatment |
| Complaints process | The firm must handle complaints, often with an outside ombudsman or dispute body | Being left with no route when a dispute is not resolved |
| Compensation scheme | A fund that may pay clients if a firm fails and client money is missing, up to a limit | Losing deposits when a broker goes bankrupt |
| Leverage limits | A cap on how much leverage retail clients can use | Very large positions on a small deposit |
Read more on each topic: segregated client funds, investor compensation schemes and leverage limits by regulator.
Strong and light regulation
Some regulators apply all of these rules strictly. Others license firms with lighter requirements, fewer checks and no compensation scheme. A broker licensed by a lighter regulator is still "regulated", but the protection behind that word is smaller. The offshore vs onshore brokers guide explains the difference.
What regulation does not protect you from
- Market losses. If price moves against your position, the loss is yours. No regulator or compensation scheme refunds trading losses.
- Leverage. Leverage means controlling a larger position than your deposit. Leverage limits reduce the size of positions, but a leveraged CFD or forex position can still lose money fast, and a stop-out can close your trades at a loss.
- Your own decisions. Paying for signals, following tips or handing your login to someone else is not covered.
- Scams posing as brokers. A fake site can copy a real licence number. See clone sites and fake apps.
- Rules from another country. A foreign licence does not give you the protection of your own country's law.
For practical loss control, see risk management.
Regulated vs unregulated broker
| Regulated (strong regulator) | Unregulated | |
|---|---|---|
| Who checks the firm | A financial authority with inspection powers | Nobody |
| Client money | Must be segregated | No rule |
| Disputes | Complaints route, often an ombudsman | Only the firm's own goodwill |
| If the firm fails | Possibly a compensation scheme | Usually nothing |
| Market losses | Not covered | Not covered |
An unregulated firm may still pay out, but you depend fully on its honesty. A regulated firm gives you formal routes when something goes wrong, within the limits of its licence.
Regulation in Pakistan
Who supervises brokers
The regulator for securities and futures brokers 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 broker lists, per the SECP, lists of licensed brokers are on the PSX and PMEX websites.
On unlicensed activity, 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 same Act sets penalties: 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.
What the SECP says about offshore platforms
On offshore platforms, per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan. Also, per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse.
In practice, a foreign licence may give you some protection under that foreign regulator's rules. It does not give you protection under Pakistani law, and a Pakistani regulator cannot help you recover money from an offshore firm.
The SECP also warns about specific names: 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. A name not being on a warning list does not mean the platform is approved.
What the SBP says about payments
The State Bank of Pakistan has addressed offshore trading from the foreign exchange side:
- On payments: 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.
These are positions stated by the regulators. Before opening any account with a foreign platform, read them in full and consider getting legal advice. The law and regulators page and the regulation and safety hub collect the related guides.
How to check a broker's licence
- Find the exact legal entity name and licence number on the broker's site, usually in the footer or legal documents.
- Open the regulator's register yourself. Type the address directly; do not follow links from the broker or from messages.
- Check that the name, licence number, website address and permitted services match.
- Check the regulator's warning list.
- Confirm which entity your account would actually be opened with.
Step-by-step guides: verify a broker, FCA register, CySEC register, FSCA register, FSA Seychelles register, FSC Mauritius register, CMA Kenya register and other regulator registers. For a full list of checks, use the broker checklist.
Frequent questions
Does a regulated broker guarantee my money is safe?
No. Regulation reduces the risk of misconduct and broker failure. It does not cover trading losses, and protection depends on the specific regulator and entity.
Will a compensation scheme pay back my trading losses?
No. Compensation schemes, where they exist, deal with a failed firm that cannot return client money. Losses from your own trades are never covered.
Is a broker licensed abroad regulated in Pakistan?
Not by that licence. According to the SECP, offshore platforms have no Pakistani licence or oversight. Check the SECP and SBP positions above.
How do I know which entity holds my account?
Look in the client agreement and account documents. They name the legal entity and its regulator. If they don't, treat that as a warning sign.
What should I do if a broker refuses to pay me?
Use the firm's complaints process first, then the regulator or dispute body named in your agreement. See file a broker complaint and report a scam. Be wary of anyone offering to recover money for a fee; see recovery scams.