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XM regulation: what happens if the firm fails

The licence is what decides where your money sits and who is obliged to do something about it. Here is who licenses XM and what the protections are.

Facts last checked . Read the full XM review.

Regulation and safety

Regulated by
Belize FSC (8557558); CySEC (120/10); DFSA (F003484); FSCA (49976); Mauritius FSC (GB23202700); Seychelles FSA (SD190); CMA Kenya (233)
Regulator tier
Tier 1
Register entry
Belize FSC Register
Client money segregated
Yes
Held at
Top-tier global banks
Negative balance protection
Yes
Compensation scheme
ICF up to €20,000 for eligible CySEC clients
Audited by
Independent external auditors
Not available to
United States, Canada, Israel, Iran and other sanctioned/restricted jurisdictions

Check the licence yourself: the CySEC register of investment firms, the DFSA public register, the FSCA search of financial services providers, the Mauritius FSC register of licensees, the Seychelles FSA list of regulated entities.

What this means

The licence is what decides where your money sits and who is obliged to do something about it.

XM holds a tier-one authorisation from CySEC. That matters more than any headline spread: it determines your leverage cap, whether losses can exceed your deposit, and what happens to your money if the firm fails.

It also operates an offshore entity (FSC and FSA). Which one you are onboarded to depends on where you live, and the two carry very different protections - worth confirming before you deposit.

CySEC licences passport across the EU and follow the 1:30 retail leverage cap, with the Investor Compensation Fund covering eligible claims.

The FSCA licenses derivative providers in South Africa without a fixed retail leverage cap, so headline leverage is often higher than an FCA or ASIC entity may offer.

The DFSA regulates from the Dubai International Financial Centre, a separate legal jurisdiction from the wider UAE.

Client money is held separately from the firm's own money, at Top-tier global banks. That separation is what makes your balance recoverable if the company fails, rather than part of the pool its creditors divide up.

Negative balance protection applies, so a losing position cannot take the account below zero and leave you owing the broker money.

Covered by ICF up to €20,000 for eligible CySEC clients, which pays eligible clients up to its limit if the firm fails owing client money.

Questions about XM regulation

Is client money segregated at XM?

Yes. XM holds client money separately from its own funds, at Top-tier global banks.

Does XM offer negative balance protection?

Yes. XM offers negative balance protection, so a losing position cannot leave you owing the broker more than your account held.

Is there a compensation scheme at XM?

XM's compensation scheme is recorded as: ICF up to €20,000 for eligible CySEC clients. A scheme covers the broker failing, not losses on your trades.

Regulation at brokers under the same regulator

More about XM