tastyworks is overseen by top-tier US regulators, which ensures strong investor protection, but the broker doesn't have a banking background.
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Whether a financial provider like tastyworks is safe and legit is a common, important and very legitimate question. After all, you trust tastyworks with your money and savings.
One thing worth bearing in mind: all brokers that you find on BrokerChooser are regulated by at least one top-tier authority. So in this basic sense, tastyworks is of course legit.
Additionally, there are other factors you can take into account when you check the safety of tastyworks, including whether tastyworks is listed on any exchange, provides a two-step login, discloses its financial results transparently, etc.
We collected and summarized the most common questions related to broker safety, allowing you to decide for yourself whether you consider tastyworks safe in your individual circumstances. We also compared tastyworks with two similar brokers.
| tastyworks | ChoiceTrade | TradeStation | |
|---|---|---|---|
| Banking background | No | No | No |
| Broker listed on stock exchange | No | No | No |
| Annual financial statements on website | Yes | Yes | Yes |
| Mobile two-step authentication | Yes | No | Yes |
| Broker ownership transparency | Yes | Yes | Yes |
| Broker management transparency | Yes | Yes | Yes |
| Broker is audited by the Big Four | No | No | Yes |
Is tastyworks regulated?
Yes, it's regulated by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the National Futures Association.
Is tastyworks safe?
To be certain, we highly advise that you check two facts:
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how you are protected if something goes wrong
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what the background of the broker is
How you are protected
| Country of clients | Protection amount | Regulator | Legal entity |
|---|---|---|---|
| Australian clients | No protection | ASIC | tastyworks Australia Pty Ltd |
| Global clients | $500,000 ($250,000 cash limit) | FINRA, SEC | tastyworks, Inc. |
Accounts by Australian residents are regulated by the Australian Securities and Investments Commission (ASIC), while all other accounts belong to tasty's US entity and thus fall under the regulation of the SEC and FINRA.
Global clients are entitled to investor protection under the US Securities Investor Protection Corporation (SIPC) the protection scheme. The SIPC protects you from the loss of cash or securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.
A non-US citizen who signed up with tastyworks is treated the same way as a US resident if something goes wrong. The $500,000/$250,000 amount is substantially higher than what is offered by most European investor protection schemes.
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.
Australian clients are not protected by any investor scheme.
Background
tastyworks was established in 2017. The longer the track record a broker has, the more proof we have that it has successfully weathered previous financial crises. By this standard, tastyworks is quite young.
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