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Regulatory Capital

Brokers & Regulation

The minimum own funds a broker must hold to keep its licence. The size of that requirement is what a licence badge really signals.

Regulatory capital is the minimum own funds a broker must hold to keep its licence — money that belongs to the firm, sits above client money, and exists to absorb losses before clients are affected. The figures differ enormously by jurisdiction, and that gap is the clearest signal a licence badge carries. A tier-one regime requires seven-figure capital, audited accounts and prompt reporting of any breach; a light-touch offshore licence may require a fraction of that with no published accounts at all. When comparing two brokers with different flags, the capital requirement behind each licence tells you more than the logos do.

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