Futures VS Forex Brokers

Hi,
I know that forex brokers are dodgy etc,
I've heard people saying how futures brokers are not so dodgy
cause there regulated, does that mean there alot safer, what's
to stop them from going under as well, or is there safe guards for
clients funds with futures brokers.

Also is there such a thing as a futures broker where the clients funds
are basically untouchable in case of the broker going bust.

Anyone with the know on this stuff, I'd greatly appreciate your
help with these questions.


Regards
Mr Smith

Its my understaning that brokers who offer futures must be registered and regulated. Your funds must be kept seperate from the "companies" funds and will be returned to you if the broker goes bust.

Does the government secure any of these funds like they do for a bank? I do not know.

Futures brokers must keep client funds seperated from the firms own money ('seggregated'). If the firm goes bancrupt, the remaining money (client funds + firm money) will be distributed among the creditors. During this process, claims from futures clients will recieve priority ('secured creditor'). Then the rest of the monies (if any) will be distributed among the other creditors. If a FX spot broker goes down, clients claims will not get such priority. But that doesnt mean that client funds are 100% sure at futures brokers, because if for what ever reason there is not enough money available to satisfy all client claims (due to fraud for example), their clients will only get a percentage of their claims and the other creditors will get nothing.

Thanks for the responses.

So the best it gets as far as safety is a broker like interactive brokers?

Mr smith

Definitely, and you won't find another broker who can match their rates on FX futures. At least I have yet to find one.