## Tier 1 · top
**Bodies:** FCA (UK), ASIC (AU), NFA (US), CySEC (CY), MAS (SG), SFC (HK), FINMA (CH), FSA (JP)
**Core protections:**
• ✅ Mandatory segregated funds at Tier-1 banks
• ✅ Negative balance protection
• ✅ Leverage caps (30:1 majors)
• ✅ Compensation schemes (FSCS £85k / ICF €20k / CIPF CAD$1M)
• ✅ Public revocation / warning records
Under Tier 1, you usually get your money back even if the broker fails.
## Tier 2 · mid
**Bodies:** BaFin, AMF, FSCA, DFSA, SCA, CONSOB, IIROC
Tier-1-lite: protections exist but smaller, enforcement varies.
## Tier 3 · offshore
**Bodies:** VFSC, SVG-FSA, Belize IFSC, Mauritius FSC, Seychelles FSA
**Reality:**
• ❌ Usually **no** mandatory segregated funds
• ❌ **No** compensation scheme
• ❌ Registration costs near zero
• ⚠️ If something goes wrong, you probably won't recover
Tier 3 licenses function more like "incorporated here" than actual oversight.
## Practical conclusion
• Tier 1 regulated → +30 score
• Tier 2 → +12
• Tier 3 only → +3 and base score lowered by 20
Brokers often hold **multiple licenses** (FCA + CySEC + SCB at once) — what matters is which entity you sign with.
