Fidelity regulation

Trying to find out whether Fidelity is regulated? Not sure which authorities are overseeing Fidelity and why this matters?

Rest assured, the lack of regulation at Fidelity is not a reason for worry. Our brokerage experts have determined that Fidelity is a fully regulated broker, overseen in USA. We gathered all the information on the regulatory profile of Fidelity and will explain why this matters.

Why Fidelity is trustworthy

Why [Broker name] is trustworthy

Adam Nasli

Forex • Algo Trading • Market Analysis

I am a seasoned forex trading expert, with nearly a decade of experience in both manual and algorithmic trading. I have personally tested more than 40 different forex brokers, developing an in-depth understanding of the most common platforms, products and fee structures offered by forex brokers.

Learn about our methodology

Adam Nasli

Forex • Algo Trading • Market Analysis

I have personally tested several brokers globally and I am familiar with the regulatory and licensing procedures of at least a dozen financial authorities globally. Here are my key insights into the regulatory status of Fidelity as of August 2024:

• Fidelity operates under a very strict regulator, which is vital for the safety of your money if you have an account with the broker.
• Fidelity must separate client funds/assets from its own operations; this makes all the difference for the safety of your investments.
• Explore the services of Fidelity in our comprehensive Fidelity review for 2024 and browse other top-tier regulated brokers with our unique Find My Broker tool.

Think of a broker with strict regulatory oversight like a lifeguard at the beach. Just as the lifeguard keeps you safe in the water, offering immediate help when you need it, brokers operating with top-tier regulation protect your investments. They make sure your investments are secure and handled with integrity and transparency.

Fidelity has the following regulation:

• USA - Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA)

Why does all this matter? We are contacted by an alarming number of people who ended up working with unregulated brokers and they share with us some sad and frightening stories. Here’s an example.

Marco invested a substantial amount using what appeared to be a credible online trading platform. Initially, his investments showed gains, and he was able to make several withdrawals without issues. Encouraged, he increased his investments, but when he tried to withdraw some profits after a successful trade, his requests went unanswered, and customer service became unreachable. Further investigation revealed the broker was not regulated by any financial authority. Eventually, the platform vanished overnight, taking John's investments with it, leaving him with no recourse to recover his funds.

Choosing a broker with top-tier regulation means you're in safe hands. This level of strict oversight ensures that your investments are protected, you're getting fair pricing, and trading conditions are transparent and favorable.

As a broker with top-tier regulation, Fidelity is legally required to keep the funds and assets of its clients separate from its own money. This is a game changer in terms of the safety of your investments.

Client fund segregation is like having your money in a separate safe from Fidelity’s own cash. Thus, if your broker ever runs into financial trouble, your funds won't be touched to settle their debts - they're entirely off-limits. It’s a crucial setup because it protects your money, ensuring that what you’ve invested stays secure and accessible only to you. This segregation is a requirement imposed by top-tier regulators and not something you can request your broker to do. You will only have access to this safety net if your broker has the appropriate regulation.

In the highly unlikely event that Fidelity commits fraud and uses client assets for its own purposes, you can still recover your money if you have access to investor protection.

In this review, we concentrate on Fidelity services in the US. In the US, customers are served by Fidelity Brokerage Services LLC and as such are under the US investor protection scheme, called SIPC. This protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes $250,000 for cash. This amount is substantially higher than what most investor protection schemes provide.
Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.
Fidelity also provides an additional total of $1 billion coverage on an aggregate company level. There is no per customer limit on securities coverage, but there is a $1.9 million coverage limit on cash per account.
A further safeguard is Fidelity's Customer Protection Guarantee, whereby the firm will reimburse you for losses from unauthorized activity in covered accounts occurring through no fault of your own. You are automatically covered for all cash and securities held in your covered Fidelity account(s).
However, Fidelity does not provide negative balance protection. You won't be protected against the balance on your account going into negative territory.

For detailed insights into trading conditions, costs, and service quality at Fidelity, check out BrokerChooser's Fidelity review for 2024. All our broker reviews are based on the analysis of nearly 600 data points and direct experience. When we review a broker, we go hands-on by opening a real-money account and trading on its platforms, giving us a complete view of what it offers and how it performs.

The BrokerChooser team has personally tested and reviewed more than 100 brokers globally, all of which have top-tier regulation. All our experience and expertise is included in the Find My Broker tool. Simply answer a few questions and get a personalized broker list.