Prop Firm Regulation by Country

Many prop firms that sell evaluations are not licensed by a financial regulator, and several say so plainly in their terms. At least one regulator, the Czech National Bank, has said that simulated trading on a demo account is not an investment service that needs its permission, while regulators in the United States and Canada acted in 2023 against a firm they alleged had misled customers, so a firm’s structure and disclosures matter more than any licence badge.

Why many prop firms sit outside financial regulation

Financial regulators license activities such as dealing in financial products, holding client money and giving investment advice. A typical evaluation firm does none of these in the usual sense: the trader pays a fee for a service, trades a simulated account, and receives rewards under a contract. FTMO, whose companies are registered in Prague, states that all its accounts are demo accounts with fictitious funds and that FTMO companies do not act as a broker and do not accept deposits.

That position changes when real money or real markets come in. A firm that copies traders’ orders into real accounts, runs live accounts through a broker, or tells customers their trades reach real liquidity providers is closer to activities regulators do cover. The A book vs B book guide explains these models.

Country by country

United States

On 28 August 2023 the CFTC filed a complaint against Traders Global Group, which traded as My Forex Funds, alleging that the firm, not third party liquidity providers, was the counterparty to substantially all customer trades, and that more than 135,000 customers had paid at least $310 million in fees. The reach of the CFTC’s powers was disputed from the start: Commissioner Caroline Pham issued a statement on the filing arguing that the agency’s authority covers only leveraged, margined or financed retail commodity transactions, not all retail commodity transactions. In May 2025 a special master appointed by the court recommended that the complaint be dismissed with prejudice and that the CFTC be sanctioned for false statements to the court, and the CFTC’s acting chairman called the agency’s conduct inexcusable.

US futures firms sit closer to regulated markets than many CFD firms because live futures trading needs a clearing broker. Topstep‘s payout policy offers US traders a prop to brokerage payout option, and Plus500’s FY2025 results describe Plus500 as the exclusive clearing and technology provider for Topstep’s brokerage expansion. Some offshore CFD firms limit US access instead: The Trading Pit does not sell its CFD programmes to residents of the United States, Canada or Russia, and Blueberry Funded does not sell evaluations to US or Australian residents. The guide for US traders covers the options.

Canada

On 1 September 2023 the OSC issued a temporary cease trade order against Traders Global Group and its principal, stating that it was investigating possible breaches of securities law including fraud, unregistered trading and illegal distribution of securities, and that neither was registered with the OSC in any capacity. The OSC urged investors to check the registration of anyone selling them an investment.

United Kingdom

The FCA describes principal trading firms as firms that deal on their own account, with the investments held by the firm and bought with its own money, and it sets out how these firms apply for authorisation. Its consumer guidance says that if you deal with a firm that is not authorised for the activity, you will not have access to the Financial Ombudsman Service and will not be protected by the FSCS if the firm fails. Some UK based providers say plainly that they are not regulated. ThinkCapital‘s provider, TFG (Payments) Limited in London, states that it is not authorised or regulated in any jurisdiction and that its link to the ThinkMarkets group does not extend that group’s regulatory permissions, client money protections or compensation arrangements to customers. Some broker programmes exclude UK residents altogether: Axi Select‘s launch announcement excluded residents of Australia, New Zealand and the United Kingdom.

Czech Republic and the wider EU

The Czech National Bank’s published opinion on simulated trading says that where trading is only simulated, with no real execution of orders and no real settlement, it is not an investment service and no CNB permit is needed. It adds that fictitious funds used on a demo account are not electronic money, and that paying a largely non refundable entry fee for the chance of a reward from fictitious trades is not a payment service. The opinion expressly does not cover models where demo orders are mirrored onto a real account. Elsewhere in the EU, group structures matter: Purple Trading is a Cyprus investment firm regulated by CySEC, while the group’s prop brand, Fintokei, is run by a separate company in Brno. OANDA’s former prop business was run by OANDA Assessments Ltd in Malta before it moved to FTMO Group in March 2026.

Australia

ASIC says that a business generally needs an Australian financial services licence to provide financial services, which include dealing in a financial product and giving financial product advice. Moneysmart, ASIC’s consumer site, tells people to check a licence on ASIC’s professional registers, notes that holding a licence does not mean ASIC endorses the company, and publishes an investor alert list of entities without a licence that may be targeting Australians. Some firms simply exclude Australian residents, as Axi Select and Blueberry Funded do. The guide for Australian traders covers firms that accept them.

Offshore centres and group structures

Many firms spread their operations across several companies in different places. Blue Guardian is run by Blue Guardian Limited in Saint Lucia, with payments through Iconic Exchange FZCO in Dubai. WSFunded names WSF Technology FZCO in Dubai, with simulated accounts provided by a Saint Lucia company and payment operations through a company in Cyprus. Hantec Trader‘s operator, Hantec Trader Limited in Mauritius, states that it does not carry out regulated activities, does not act as a broker and is not authorised by a regulator, and that it is a separate entity from the group broker. Hola Prime lists Hola Prime Limited in Hong Kong as the website owner and states that MT5 services are provided through Hola Prime Ltd in Mauritius under Financial Services Commission licence GB24203729. Top One Trader lists a registered office in Anjouan in the Union of Comoros.

Worked example: following the money

Take a made up firm whose terms name a Saint Lucia company as your contracting party, a Dubai company as payment processor and a licensed Mauritius broker as the platform provider. You pay a $300 evaluation fee, pass, and are owed a $2,400 reward. The figures are an illustration.

• The reward is owed by the Saint Lucia company, because that is who you contracted with.
• The Mauritius broker’s licence covers the broker’s own services, not the prop contract, which is the point ThinkCapital’s terms make about its own group.
• If the contracting company is unregulated, there is no ombudsman or compensation scheme behind the $2,700 you have paid and are owed.

Now compare two traders at the same firm. One requests every eligible payout, so the amount owed rarely exceeds one cycle of profit. The other leaves $9,600 of their share unpaid for three months. The legal position is the same, but the second trader has far more riding on a company with no regulator behind it.

Common mistakes

• Treating a group broker’s licence as cover for the prop firm. The contracting entity is what counts.
• Trusting badges. Membership of an industry body, such as the Financial Commission membership that Axi Select’s programme page describes, is not the same as a regulator’s licence.
• Ignoring restricted country lists. Buying from a restricted country puts you outside the terms you agreed to.
• Assuming regulation guarantees payment. A licence sets standards; it does not remove the risk of loss.
• Reading marketing instead of terms. The terms name the company, the governing law and the regulatory position.

Checklist

• Find the contracting company, its country and registration number in the terms.
• Read what the firm says about its regulatory status and simulated accounts.
• If a licence is claimed, check it on the regulator’s own register.
• Check the restricted country list for where you live.
• Keep unpaid profit low by requesting payouts when eligible.

For how to weigh all this, read are prop firms legit and the regulation shift, and check prop firm red flags before you buy. More analysis sits in the industry section, and every listed firm is in the prop firm directory.