If a forex broker becomes insolvent, what you recover depends on two things: whether your money was properly segregated from the firm’s own funds, and whether a compensation scheme covers the entity that held your account.
What does segregation do?
Segregation keeps client money in separate bank accounts so it is not available to the broker’s creditors. It protects you only if the broker actually followed the rules, and returning funds through an administrator can still take months.
Which compensation schemes exist?
| Jurisdiction | Scheme | Limit for investment claims |
|---|---|---|
| United Kingdom | Financial Services Compensation Scheme | Up to £85,000 per eligible person |
| Cyprus | Investor Compensation Fund | Up to €20,000 |
| Germany | Entschädigungseinrichtung der Wertpapierhandelsunternehmen | 90% of the claim, up to €20,000 |
| Ireland | Investor Compensation Scheme | 90% of the loss, up to €20,000 |
| Offshore centres | None in most cases | Not applicable |
Schemes pay out when a firm fails and cannot return client assets. They do not cover trading losses. Limits and eligibility rules change, so check the scheme’s own website.
What reduces the risk in advance?
Use an entity under a regulator with a compensation scheme, keep only the money you need for trading in the account, and prefer brokers whose finances are public. Our Trust Score rewards exactly those features.