How do I check whether an offshore broker is legitimate?
Verdict
- Start with the company named in your client agreement and check it on its regulator's public register; Pepperstone, our pick, passes this cleanly: Pepperstone Markets Limited, company no. 177174 B, SCB licence SIA-F217.
- Then check what the licence covers: some licences shown on broker sites are for consultation or marketing, not for holding client accounts.
- Read the terms for excluded countries, negative-balance protection and compensation, then test a small withdrawal.
- A group's top-tier licences elsewhere do not protect you unless the company holding your account holds them.
Offshore does not mean illegitimate, but it does mean you must do the checking a local regulator would otherwise do for you. Here is a six-step method, worked through on Pepperstone, with real examples of licences that look stronger than they are.
The method, worked on Pepperstone
- Identify the contracting company. For Singapore residents, Pepperstone's site footer names Pepperstone Markets Limited, #1 Pineapple House, Old Fort Bay, Nassau.
- Match the licence. The site gives Securities Commission of The Bahamas licence SIA-F217 and company no. 177174 B; search the SCB register for both.
- Check local status. The MAS Financial Institutions Directory returns no result for Pepperstone, so you know you are dealing offshore.
- Read the terms. The entity's December 2025 terms exclude Australia, the UK, the EU and the US, and give retail clients negative-balance protection.
- Look for compensation. None is named for this entity; client money is segregated.
- Test the exit. Deposit a small amount, then withdraw it; Pepperstone lists card and e-wallet withdrawals at up to 1 to 2 business days.
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Licences that are not what they seem
A licence number on a website proves only that some company holds some licence. Examples from brokers' own published details:
- XS lists a UAE licence held by a financial-consultation company, and its own page does not say that company holds retail trading accounts.
- XS also lists a Kuwait Ministry of Commerce and Industry number, which is a commercial licence, not a securities regulator.
- Pepperstone's UAE company holds a Capital Market Authority licence for introduction and consultation, which is not a retail dealing licence.
- Pepperstone's international protection page cites Australia's Corporations Act for the Bahamas entity's segregated money, so ask Pepperstone how that applies to you.
Red flags that should stop you
- No company name or registered address in the footer or client agreement.
- A licence number that does not appear on the regulator's register under that company's name.
- Pressure to deposit quickly, bonuses tied to withdrawal restrictions, or refusal to return funds to the source you paid from.
- Withdrawal terms that allow broad discretionary fees; read any such clause closely.
Where Pepperstone stands
Pepperstone discloses its contracting company, licence and terms clearly, publishes a retail-loss figure (80% of retail investor accounts lose money with this provider, on its international site) and belongs to a group regulated by ASIC, the FCA, CySEC, BaFin and the DFSA. Its weak point for Singapore residents is the absence of a MAS licence and of any compensation scheme for the Bahamas entity.
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Sources
Broker disclosures and the MAS register.
Is a Bahamas licence a real licence?
Yes, the Securities Commission of The Bahamas is a securities regulator. Whether its rules suit you is a separate question from whether the licence exists.
Does a group's FCA licence protect me?
Only if your account is with the FCA-regulated company. Pepperstone's Singapore clients deal with its Bahamas entity.
How small should a test withdrawal be?
Small enough to lose without pain. Pepperstone's minimum funding is $10, so a test costs very little.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Pepperstone's international site states that 80% of retail investor accounts lose money when trading CFDs with this provider. This page is not investment advice; broker terms change, so confirm them on the broker's own site before opening an account.