Reviews and trust · Funded accounts

Are prop firm accounts legit? What protects you and what does not

As a category, neither legit nor not. A prop firm account is a contract with a private company over a simulated environment, and that is neither illegal nor a scam in itself. What it is — and this is worth knowing before you pay — is a place where almost none of the protections you associate with the word "investing" reach you.

This page sets out what you are actually signing, who supervises it and who does not, which protections are left outside, and what can be checked about one particular firm. All four come from public documents from Spain's CNMV, two other European supervisors and the Spanish official gazette, and every one of them is linked at the foot of the page.

Sources read on 31 August 2026 · linked at the foot of the page

This page explains the model, it does not assess any firm

What you are actually signing

A contract with a private company over a simulated environment. It is not a securities account in your name.

The clearest official description in Spanish comes from the CNMV and is a few years old now: these are services offering access to an account for trading shares, CFDs or forex, with the particular feature that the user would not risk capital of their own, would apparently trade with capital put up by the website itself, and in exchange would supposedly receive a percentage of the profits. The word "apparently" is in the original, and it is not loose drafting.

You do not have to infer any of it, because the firms say so themselves. FTMO carries this notice at the foot of its pages: "Please note that all accounts we provide to our clients are demo accounts with fictitious funds and any trading is in a simulated environment only". It was checked on 31 August 2026 and appears the same on its home page, on its terms and on its forbidden practices page.

The Belgian FSMA explains what happens on the other side: "the consumer never makes any actual trades. He or she plays on a demo account with the prop trading firm. The latter may decide to carry out one or more demo transactions for a consumer on an actual trading platform". The firm may mirror what you do in the simulator onto the real market, but that happens in its account and with its money, not in yours.

And it draws out the consequence, which is the sentence most worth understanding on this page: "the prop trading firm alone decides under what conditions consumers may use their platform, and what simulated transactions it will copy. It is therefore difficult for a consumer to determine whether he or she is entitled to any commissions and if so, how much".

Everything else follows from that. What you are buying is not access to capital: it is the right to take part in a split that the other side defines, measures and calculates. Whether that is trustworthy depends on the contract and on who signs it, not on how the market behaves.

Who supervises this, and who does not

The CNMV wrote it out in full: these accounts fall outside its remit. Which is not the same as being illegal.

In that same warning, the CNMV marks out its own perimeter: running these courses and opening these accounts do not fall within the CNMV's remit under the functions the securities markets act assigns it. The sentence carries on, and the second half matters as much as the first: the various activities that might be carried out from those accounts in the financial markets would be within its supervisory competence.

The FSMA says it from the other direction and in the present tense: "prop trading companies do not hold any authorization and therefore are not allowed to provide investment services". That is not a charge against one firm, it is a description of the whole category.

Why it works that way is set out in Ley 6/2023, the Spanish securities markets act. Article 125 lists the investment services — executing orders for clients, managing portfolios, giving investment advice, among others — and article 129 reserves them: nobody may carry out those activities on a professional or habitual basis without holding the required authorisation and being entered in the CNMV's or the Bank of Spain's registers.

And here is the nuance almost nobody writes down. Being outside that perimeter is not an offence. A firm that does not execute orders for you, does not hold your money and does not recommend trades tailored to you is not required to seek authorisation, any more than somebody selling a training course is. What follows from being outside is not that there is fraud: it is that when the problem is contractual — a split that never arrives, a rule read against you — there is no market supervisor to take it to.

The protections that do not reach you

The ones protecting a retail CFD client exist, are specific and are in the official gazette. None of them reaches this far, and not by accident.

On 27 March 2018 ESMA agreed to restrict the marketing of CFDs to retail investors with a specific package: leverage limits by underlying, a margin close-out rule, negative balance protection, a restriction on incentives and a standardised risk warning. It justified the measures with the national supervisors' analyses, which showed that "74-89% of retail accounts typically lose money on their investments, with average losses per client ranging from €1,600 to €29,000".

That intervention was temporary. What keeps it alive in Spain are two CNMV resolutions, one of 27 June 2019 and one of 11 July 2023, the second of which also banned advertising of CFDs to retail investors. And that resolution says who it binds: firms authorised to provide investment services in Spain.

A prop firm account fits none of the three pieces of that sentence. There is no authorised firm, you are not its retail client, and inside the simulator there is no CFD contracted in your name. The protections are not failing here: they do not apply, because they were written for a different relationship.

ProtectionWho it reaches

Leverage limitDoes not apply

Where it comes from: ESMA 2018 · CNMV resolutions 2019 and 2023
Who it binds: Firms authorised in Spain
In a prop firm account: Set by the firm's own rulebook

Negative balance protectionDoes not apply

Where it comes from: ESMA 2018 · CNMV resolutions 2019 and 2023
What it prevents: Owing more than you put into the account
In a prop firm account: No balance of yours: the capital is simulated

Standardised risk warningDoes not apply

Where it comes from: ESMA 2018 · CNMV resolutions 2019 and 2023
What it forces into view: The share of retail accounts losing money
In a prop firm account: No equivalent obligation

Investor compensation schemeNo cover

Who funds it: Authorised firms, through their contributions
When it steps in: Insolvency of a member firm
In a prop firm account: The firm is not a member

The CNMV's guide puts it the other way round, which is why it works here: unauthorised firms are not members of the investor or deposit compensation schemes, so investors are not protected if such a firm becomes insolvent.

What you can check about a prop firm

With no supervisor in the picture, the contract is what is left. These six things are written into it or they are nowhere.

Whether the funded stage is simulated too
This is the question most people assume they already know the answer to, and the answer is usually written down. In many programmes the funded account is still a demo account and what changes is the split: the firm decides which trades it mirrors on the real market and what it pays you for them. Look for the words — demo, simulated, virtual funds — in the contract before looking for them on the sales page.
Who the counterparty is and under which law it signs
Which company signs, where it is incorporated, and which law and which courts govern the contract. All three are written into it. If the company sits outside the European Union, the consumer law you assumed applies may not be the one that decides, and that changes the cost of complaining about anything at all.
How the split is calculated and when it is paid
This is one of the two complaints Consob says it received: the promised share of profits never being handed over. What can be checked is not the headline percentage but the procedure — what it is calculated on, how often, how long it takes, what minimums apply and on what grounds it can be refused.
What disqualifies you, and who interprets it
Consob's other complaint lands exactly here: the difficulty of the tests, which users say is engineered to push players into trying again. Daily loss rules, consistency rules, trading hours and news windows are what decide whether you get paid, and they are almost always interpreted by the same firm that wrote them. Of the three firms this site works with, the only one whose rulebook is broken down here source by source is FTMO, in the page on FTMO and expert advisors.
What happens if the rules change after you pay
Almost every contract reserves the right to amend the rulebook, and it is reasonable that they do. What you need to read is what happens to an evaluation already under way when that occurs: whether the new rules apply to you, whether you keep the ones you signed up to, and how much notice you get.
What is being sold to you around it, and to how many others
The FSMA does not stop at the prop firms. It also warns "against the ecosystem of any firm that ride on the coattails of the popularity of prop trading firms. They offer services linked to the latter's activities, such as courses or trading software used for training". That sentence covers what is sold on this site, and burying it in a page about being sceptical would make no sense. Put the same questions to what is sold here: what it includes in writing, which company stands behind the contract, and how many other people have been sold the same thing.

None of the six tells you whether a firm is trustworthy. What they do is turn an impression into a list of answers that either exist or do not, which is the only thing you can check before paying. If what you are after is the other side — the signs that there is fraud on top, and what to do if you have already paid — that is in how to spot a prop firm scam.

Sources · read on 31 August 2026

Frequently asked questions

Are prop firm accounts legit?

As a category the question cannot be answered, because a prop firm account is not a financial product with common rules: it is a contract with a private company over a simulated environment, and each firm writes its own. What can be stated is where the risk sits, and it sits entirely with the user: there is no authorised firm behind it, you are nobody's retail client, and the protections that exist for someone trading CFDs with an authorised firm do not reach this relationship. That does not make the model a fraud, but it does mean reliability rests on the contract and on the solvency of whoever signs it, not on a supervisor.

Is a funded account real money or a simulator?

It depends on the firm and it is written into the contract, so it is the first thing worth reading. In many programmes the funded stage is a demo account too: FTMO, for instance, carries a notice at the foot of its pages saying that all accounts it provides to its clients are demo accounts with fictitious funds and that any trading happens in a simulated environment only. Belgium's FSMA describes it the same way and adds the part that matters: the firm may decide to carry out one or more of those simulated transactions on a real trading platform, but that happens in its account rather than in yours.

Are prop firms supervised by the financial regulator?

Not as far as the courses and the opening of these accounts are concerned. Spain's CNMV wrote it in those terms: running these courses and opening these accounts do not fall within the CNMV's remit under the functions the securities markets act assigns it. The same sentence adds that the various activities that might be carried out from those accounts in the financial markets would be within its supervisory competence. Belgium's FSMA says it from the other side: these firms hold no authorisation and are therefore not allowed to provide investment services.

Is trading a funded account legal in Spain?

Being outside the supervisory perimeter is not the same as being illegal, and the two are worth keeping apart. Spain's Ley 6/2023 reserves activities such as portfolio management and investment advice to authorised firms, so a company that does not execute orders for you, does not hold your money and does not recommend trades tailored to you needs no authorisation for what it does. What follows from that is not that there is fraud: it is that when the problem is contractual there is no market supervisor to take it to. How anything you are paid is taxed is a separate question and depends on your own circumstances.

What guarantees that the profit split gets paid?

The contract, and nothing but the contract. The FSMA puts it bluntly: the firm alone decides under what conditions consumers may use its platform and which simulated transactions it will copy, which makes it difficult for a consumer to determine whether they are entitled to any commissions and if so how much. Italy's Consob noted in July 2024 that one of the two complaints it had received about these offers was precisely that the promised share never arrived. What can be checked before paying is not the headline percentage but the procedure: what it is calculated on, how often it is paid, what minimums apply and on what grounds it can be refused.

What happens if the prop firm shuts down?

You are left as a creditor of a private company, with the contract you signed and whichever jurisdiction that contract points to. There is no compensation scheme behind it: the Spanish investor compensation fund is financed by authorised firms through their contributions and steps in when a member firm becomes insolvent, and a prop firm is not a member. The CNMV guide puts it the other way round when describing unauthorised firms: they are not members of those schemes, so investors are not protected if such a firm becomes insolvent.

Apply this to this site

This page spends four sections saying that what can be checked matters more than what is promised. Starting here.

What this site sells is software installed on top of a funded account, so it inherits the whole contract you have just read: the rules are set by the firm and not by the software, and no configuration guarantees passing an evaluation phase. What is claimed, and what is not, is on the system page, and it deserves the same suspicion you would bring to a prop firm rulebook.

The questions in section 04 — who the company is, what the contract says, what happens if the conditions change — apply here as they do to any firm in the industry. Asking is free, and anyone who has the answers should not mind giving them.

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Three more guides on this, or on what sits next to it.