Prop Firm Regulation Explained

Most traders don’t realise that prop firms are completely unregulated. This guide explains why, how that impacts your trading, and how to reduce risk when choosing a firm.

You’ll learn the difference between prop firms and regulated brokers, how regulatory bodies like ASIC (Australia), the FCA (UK), NFA (USA), CySEC (EU), and CIRO (Canada) apply only to brokers, and why these rules don’t cover prop firms.

It covers how prop firms avoid regulation by not handling client funds, and what that means in practical terms, no protection if the firm shuts down, refuses payouts, or changes rules. We also cover how broker-linked prop firms work (like IC Funded using IC Markets), and what that does and doesn’t protect you from.

What’s inside:

• Why prop firms are unregulated by ASIC, FCA, NFA, CySEC, or CIRO
• What “unregulated” really means for your payouts and trading conditions
• Differences between prop firms and CFD brokers (execution, risk, recourse)
• Broker-linked prop firm structures explained
• What to check before signing up (firm ownership, terms, payout history)
• Red flags to avoid (fake licence claims, offshore secrecy, payout delays)

Ideal for any trader who wants to understand the legal risk of prop trading and how to spot safer firms.

Includes a downloadable PDF, plus a comparison table of regulated brokers vs prop firms, and independent vs broker-backed prop firms.