Regulation of Retail Prop Firms: What Traders Need to Know

Explore the regulatory gray area of retail prop firms, highlighting risks for traders, key due diligence steps, and the importance of informed choices.

(prop firms) offer traders access to capital in exchange for passing evaluation tests and sharing profits. However, these firms often operate in a regulatory gray area, leaving traders exposed to risks like sudden account closures, payout disputes, and data privacy concerns. Unlike regulated brokers, prop firms are not required to segregate funds, maintain financial reserves, or follow strict transparency rules.