How do I check whether a CFD broker is trustworthy?
Verdict
- Check the company, not the brand. Pepperstone, our top pick, passes on transparency: it names the entity that serves Singapore residents, Pepperstone Markets Limited, regulated in the Bahamas (SCB, SIA-F217), and says plainly it is not MAS-licensed.
- Look the entity up yourself. The MAS Financial Institutions Directory shows whether a firm holds a Singapore licence; for Pepperstone it returns no result.
- Read how your money is held and what happens if the account goes negative or the firm fails. Pepperstone's retail clients get negative-balance protection; no compensation scheme is named.
- Finish with a small deposit and withdrawal before you trade size.
Trust in a CFD broker comes down to verifiable facts: who holds your account, who supervises that company, and what the contract says happens when things go wrong. Below are the checks, in order, applied to Pepperstone and XS.
Pepperstone, run through the checks
The group behind Pepperstone holds licences from ASIC, the FCA, CySEC, BaFin, the DFSA and the SCB. A Singapore resident, though, deals with one company only: Pepperstone Markets Limited, company no. 177174 B, Nassau, licensed by the Securities Commission of The Bahamas (SIA-F217). It has no Singapore licence and no local entity, and its site does not pretend otherwise. Retail clients are not liable for negative equity under clauses 6.2–6.3 of the SCB terms. One oddity worth knowing: the international protection page says segregated money is covered by Australia's Corporations Act 2001, an Australian law, as published on a Bahamas entity's page. Ask Pepperstone to confirm in writing how client money is held before you fund a large account.
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Six checks, in the order we run them
- Find the legal company name on the client agreement or the website footer, not the logo.
- Search that exact name on the regulator's register. For Singapore, use the MAS Financial Institutions Directory; for an offshore firm, the register of the regulator it names.
- Match the licence number on the site to the one on the register. A group licence held by a sister company does not cover you.
- Read the client-money section: segregated accounts, at which banks, and any compensation scheme.
- Check the retail loss disclosure and negative-balance terms in the risk documents.
- Deposit a small amount, withdraw part of it, and time how long it takes.
How Pepperstone and XS answer those checks
| Check | Pepperstone | XS |
|---|---|---|
| Entity named for your account | Pepperstone Markets Limited (Bahamas) | Not specified on its account pages |
| MAS licence | None (MAS directory: no result) | None in its regulation list |
| Other regulators in the group | ASIC, FCA, CySEC, BaFin, DFSA, SCB | ASIC, CySEC, FSCA, Seychelles FSA, Labuan FSA, Mauritius FSC |
| Retail negative-balance protection | Yes, in the SCB terms | Not in our data |
| Compensation scheme named | None | Not in our data |
| Retail loss disclosure | 80% of retail accounts lose money | Not in our data |
If you want a Singapore-licensed firm
Some brokers do hold MAS licences through a Singapore company: eToro Singapore Pte. Ltd. (CMSL CMS101824), Plus500SG Pte Ltd (CMS100648), IG Asia Pte Ltd, Saxo Capital Markets Pte. Ltd., CMC Markets Singapore, OANDA and StoneX Financial Pte. Ltd. (FOREX.com). Being licensed locally is a real advantage; it does not by itself make costs or platforms better, so compare those separately.
Sources
Registers and legal documents used for the checks above.
Does a big brand name mean a broker is safe?
No. Each brand runs several companies under different regulators. What matters is the company named on your contract and the register entry for that company.
Is Pepperstone regulated in Singapore?
No. It serves Singapore residents through Pepperstone Markets Limited, licensed in the Bahamas (SIA-F217). The MAS directory returns no result for Pepperstone.
What is negative-balance protection?
A promise that a retail client cannot owe the broker more than the account balance after a sharp move. Pepperstone's SCB terms provide it to retail clients; Pepperstone Pro clients get only a discretionary one-time cover up to USD 100,000.
CFDs are complex, leveraged products with a high risk of losing money quickly. Regulation reduces some risks but not market risk. This page is not investment advice; verify every licence on the regulator's own register.