How it works
Providers may act as principal, route exposure externally, internalize some flow or use a combination. Marketing labels such as STP or ECN do not always explain the full legal relationship.
What to check
Start with the customer agreement and execution policy. Identify whether the broker is principal or agent and how conflicts of interest and price sources are described.
- Read execution policy
- Identify principal vs agent role
- Treat marketing labels cautiously
Limits and risks
No execution label guarantees better fills. Actual spreads, slippage, order handling and regulatory obligations matter more than a marketing acronym.
Primary sources
BIS 2025 Triennial Central Bank Survey↗FCA: Contracts for difference (CFDs)↗General information only. Investment products can lose value, and terms, fees and regulation can change.