What does simulated trading mean legally for a prop firm?

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Simulated trading means orders are filled by software against market prices without being placed in a real market. Legally, it usually means the firm is not executing client trades or holding client funds for trading, which is a key difference from a broker. It also creates a duty to describe accounts and payouts honestly.
Two consequences matter:
What it avoids. Because no real order is executed for the trader and no trading deposit is held, the activities that typically require a brokerage or investment licence are not happening.
What it requires. Traders must understand that accounts are simulated, how fills are produced and how payouts are calculated. Describing a simulated account as live capital invites misrepresentation claims, and regulators have raised exactly this in public cases.
Good practice is a plain statement in your terms and on the website, plus a realistic simulation: live prices, real spreads and fills a trader can recognise. PropExecutor fills orders against a live cTrader price feed at raw spreads and never routes an order to a market. This is general information, not legal advice.
### Disclosure checklist
Accounts are simulated.
Prices come from a live market feed.
How orders, stops and gaps are filled.
Payouts are paid by the firm under its terms.

What does simulated trading mean legally for a prop firm?

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Disclosure checklist

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