Cyprus (CySEC) regulates many of the world's largest forex brokers. This checklist shows how to confirm — in about ten minutes — that a broker really keeps your money separate from its own.
Cyprus is one of the most important homes for retail forex brokers in the EU. Its regulator, the Cyprus Securities and Exchange Commission (CySEC), operates within the EU's MiFID II framework, which means CySEC-regulated brokers must follow the same core client-protection rules as brokers anywhere in the bloc. The most important of those rules is client fund segregation: your deposit must be held separately from the broker's own money.
Segregation matters because it decides what happens to your balance if the broker fails. When client money is properly segregated, it is not part of the broker's assets and cannot be handed to the broker's creditors in an insolvency. When it is not, your funds can be lost with the company. The nine checks below let you verify segregation yourself, without taking the broker's marketing at face value.
Two things: (1) the broker is genuinely CySEC-regulated under the entity you are contracting with, and (2) that entity states, in writing, that client money is held in segregated accounts at regulated banks. The Investor Compensation Fund is the backstop if both fail.
An unmatched or "clone" entity name, a licence that is suspended or missing from the register, pressure to deposit before documents are provided, or a website that displays a CySEC badge but no verifiable licence number. Any one of these is a reason to walk away.
It is worth being precise about the limits of these protections, because brokers sometimes present them as a general safety guarantee.
Segregation is about the safety of the custody of your money, not the outcome of your trading. Both matter, but they are separate questions.
Because CySEC sits inside MiFID II and ESMA, a properly regulated Cyprus broker offers the same headline retail protections as brokers regulated in Germany or France: segregation, negative balance protection, leverage caps, and a compensation scheme. The value of this checklist is confirming a given broker actually operates under that Cyprus entity — not a look-alike offshore one.
Our EU shortlist covers only brokers regulated by CySEC, BaFin, the FCA or equivalent — with segregation and compensation details set out clearly.
See the EU broker guide →Segregation means the broker holds your money in bank accounts separate from its own operating funds. If the broker becomes insolvent, segregated client money is not part of the company's assets and cannot be used to pay the broker's creditors. It is a core client-protection rule for CySEC-regulated firms.
Find the broker's licence number on its website and search it in the public register on the CySEC website. Confirm the legal entity name matches the company you are opening an account with, and that the licence status is active.
The Investor Compensation Fund (ICF) is a Cyprus scheme that compensates eligible retail clients of a CySEC-regulated firm if that firm fails and cannot return their money, up to a capped amount per client. It is a backstop that sits behind segregation, not a replacement for it.
No. Segregation and the Investor Compensation Fund protect you if the broker fails or misuses client money. They do not protect you from losses caused by your own trades. CFD trading carries significant risk regardless of how well your funds are held.
In client bank accounts at credit institutions, kept separate from the broker's own money and clearly labelled as client funds. A well-run broker discloses in its terms that client money is held in segregated accounts at regulated banks and is reconciled regularly.