How to Tell Who Is on the Other Side of Your Trade

The question is about your contract, not the broker's intentions

Retail marketing talks about routing, liquidity and technology. None of that answers the question that actually determines your risk, which is simpler: while your trade is open, who owes you the money? Every part of the answer is written down somewhere, and none of it requires trusting a comparison site.

The client agreement names the counterparty

Start with the contract you signed. It states which legal entity you contracted with, where that entity is incorporated, and whether it deals with you as principal. In CFD and rolling spot trading the answer is usually yes: the firm is your counterparty on every position, and the wording to look for is that it deals on its own account, or as principal, in relation to your orders.

Note the entity name precisely. Groups often run several licensed companies alongside unregulated ones, and the entity on your agreement — not the brand on the website — is the one whose regulator, capital requirements and client-money rules apply to you.

The execution policy describes what happens next

Being the counterparty is not the same as keeping the risk. The execution policy describes whether the firm covers its exposure with liquidity providers, keeps it internally, or does some of each; whether it acts as a systematic internaliser; and which venues, or classes of venue, it relies on. That is the difference between who is on the other side of the contract and who ends up carrying the market risk, and the two matter for different reasons.

The register entry says what the entity is allowed to do

Look the entity up on the regulator's own public register, using the reference number from the website footer or the agreement. The register shows the permissions it holds — dealing as principal, dealing as agent, arranging deals, holding client money — and any restrictions attached to them. A firm without permission to hold client money cannot be the one holding yours, whatever an account page implies.

The disclosure documents cover the counterparty failing

Key information and risk disclosure documents normally include a section on the risk that the firm becomes unable to meet its obligations, and on what protections exist: segregation of client money, any compensation scheme and its limits, negative balance protection where it applies. This is the section that turns the sentence "the firm is my counterparty" into a description of what happens if that firm fails.

Your own confirmations record it trade by trade

Trade confirmations and account statements name the entity you dealt with on each transaction. Where a group routes clients to different entities by residence, this is the record showing which one you actually traded with, and it is not always the one that opened your account.

What the answer changes

Knowing your counterparty changes three things: whose rules govern your money, who you complain to and under which scheme, and what your exposure is if the firm fails rather than if the market moves. It does not tell you whether your fills were fair — that is a separate question answered from your own execution records — and it does not make one business model safer than another by itself.

Claims you cannot verify

Statements about how much of a firm's order flow is passed through, what proportion of client positions it hedges, or how quickly it fills compared with competitors cannot be verified from outside unless the firm publishes the underlying data and someone independent can audit it. Treat them as marketing. The documents above are verifiable, which is exactly why they are worth the time and the claims are not.