Mostly, no. The retail funded-account / challenge model is largely unregulated as a bespoke category worldwide. It is being pulled toward regulation in 2026 only via adjacent law: CFD product-intervention rules in the EU, UK and Australia, and registration law in the US. An evaluation fee is at risk and is not an investment, and dozens of firms closed in 2024-2025 — counterparty risk is as important as regulation.
What 'regulated' does and does not mean here
There is no dedicated licence for the 'funded-account' product in any major market. What regulators actually reach is the adjacent activity: the underlying CFD exposure, and the act of soliciting retail clients. So a firm can exist as a registered company, or even own a regulated broker, while the challenge it sells remains an unregulated, fee-paid assessment. Do not read 'the company is real' as 'the product is regulated'.
How the major regions approach it
The route to oversight differs by region, and an honest map matters because there is no single tidy answer:
Why counterparty risk matters as much as regulation
In 2024, MetaQuotes began revoking MT4/MT5 licences from dozens of prop firms, and an estimated 80-100 firms ceased operations between early 2024 and late 2025. Firms migrated to platforms such as DXtrade, Match-Trader and cTrader. The lesson: even a firm operating lawfully can close or suspend payouts. Treat continuity risk as a first-class factor, never risk a fee you cannot afford to lose, and read each firm's own terms in full.
Frequently asked questions
Are prop trading firms regulated?
The funded-account model is largely unregulated as a bespoke category. Regulators reach the adjacent CFD exposure and the solicitation of retail clients, not the challenge product itself. A registered company — even one owning a regulated broker — does not make the product a regulated investment.
Is my evaluation fee protected?
No. An evaluation fee is at risk and is not an investment, and there is generally no compensation scheme covering the funded-account product. Dozens of firms closed in 2024-2025. Never pay a fee you cannot afford to lose.
Sources & further reading
An independent, regulation-first guide to proprietary trading firms. Our editorial desk verifies every factual claim against primary sources and regulators' own publications, and never accepts payment for a better listing. Nothing we publish is financial or legal advice.