EU trader's checklist for evaluating broker deposit protection

EU regulation under MiFID II, ESMA, CySEC and the FCA creates meaningful safeguards for retail traders — but they only apply if the broker you choose is genuinely regulated, and only if you know where to check. This checklist covers 10 verifiable protection points. Tick all 10 before you deposit.

The 10-point deposit protection checklist

• 01 Broker holds a valid CySEC or FCA licence Must have Find the broker's legal entity and licence number on their site. Then verify it directly: CySEC register · FCA register. If the number doesn't match the entity, stop here.
• 02 Client funds held in segregated accounts Must have The broker's Terms or Client Agreement must explicitly state that client money is kept in segregated bank accounts, separate from the broker's own capital. No mention of segregation = red flag.
• 03 Negative balance protection applies to retail accounts Must have Mandatory for retail clients under ESMA rules. Confirm the clause in the Client Agreement explicitly covers retail (not professional) clients. This means your maximum loss is capped at your account balance.
• 04 ICF or FSCS membership disclosed Strongly recommended CySEC brokers should be members of the ICF (Investor Compensation Fund) — covers eligible retail clients up to €20,000 if the firm defaults. FCA brokers are covered by FSCS up to £85,000. Check the broker's legal pages for the specific membership statement.
• 05 Withdrawal policy is clear, written, and timely Must have Processing times, minimum amounts, and any fees must be disclosed before account opening. Typical EU-regulated withdrawal: 1–3 business days. Vague or missing withdrawal terms = red flag.
• 06 Leverage caps match ESMA retail limits Must have For EU/EEA retail clients: 30:1 major forex, 20:1 minor forex, 10:1 commodities, 5:1 stocks, 2:1 crypto. Any broker offering higher leverage to retail clients is outside EU rules — your protections may not apply.
• 07 CFD loss-rate warning is prominently displayed Must have EU-regulated brokers must show the actual percentage of retail accounts that lose money (e.g. "73% of retail investor accounts lose money when trading CFDs with this provider"). If it's absent or hidden, the broker is not meeting EU disclosure requirements.
• 08 All fees are disclosed — spreads, swaps, inactivity Strongly recommended Spreads, overnight financing (swap) rates, and inactivity fees should all be findable before you open an account. Hidden fees that only appear post-deposit erode capital before you trade.
• 09 Formal complaints process and regulator escalation path Strongly recommended A compliant broker must have a written complaints policy naming the competent authority to escalate to (CySEC, FCA, or your national regulator). Look for it in the Legal or Compliance section of the website.
• 10 Marketing is fair — no income claims or guaranteed returns Must have A CySEC/FCA-regulated broker cannot make "guaranteed returns", "risk-free trading", or income claim statements. If you saw those claims on social media or an affiliate site, verify they came from a separate publisher — not the broker itself. Affiliate disclosures should be visible.

Red flags — walk away if you see these

Brokers that pass all 10 checks — CompareFX picks for EU traders

These two CySEC/CBI-regulated brokers meet every item on this checklist and are among our top-rated picks for EU retail traders in 2026.

Frequently asked questions

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