Forex Brokers offering Segregated Accounts

I am on a search for forex brokers offering segregated accounts.

So far, the only broker I found was FXCM-UK. Oanda does not offer segregated accounts as this is what they said in an email to me:

"Thank you for your interest in OANDA FXTrade. In the unlikely event of an OANDA bankruptcy, all customer funds would be administered by a trustee according to U.S. bankruptcy laws. Customers would contact this designated trustee and be entitled to a pro rata distribution of available assets. Please note that this is not a guarantee that you would be able to recover all of your funds."

In another email they say this:
"Clients' funds are kept separately from OANDA's operational funds. OANDA does not have accecss to your funds on a regular basis. Your funds are held under your name. However in the unlikely event of OANDA's bankcrupcy, customers of OANDA will be entitled to a pro rata distribution of available assets."

So which is it? Segregated or not?

If anyone has any resources to offer, please post here.
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BROKERS OFFERING SEGREGATED ACCOUNTS:

1) North Finance www.northfinance.com
2) ODL Securities UKwww.odlsecurities.com/uk/index.html
3) ActiveTrades www.activtrades.com
4) FXCM Uk www.fxcm.co.uk
5) aleccohFx www.aleccohfx.com
6) EuroOrient Securities and Financial Services www.fxpro.com
7) Dukascopy Suisse www.dukascopy.com *can have account in your name if you have account size of $250,000 USD

Offering a segregated account:

North Finance Ltd - www.northfinance.com

From their chat:

"Our client's money are kept in a segregated (separate) client account i.e. client money is held separately from company funds and cannot be used by North Finance Ltd except for client dealing purposes. Client funds cannot be used to guarantee North Finance ltd accounts or to offset North Finance Ltd loans."

I have a lot of fellow traders who use FXCM for this particular reason -- Very credible when it comes to clients funds, and they work with large IB's who give rebates on a trade by trade basis.

I would use them, but they do not offer micro accounts. only standard and mini. Same with North Finance.

It's not segregated account! Because segregated account is at higher level safe than funds administered mentioned above. I think FXCM is the best choice to keep money safe. I have just had an account at FXCM and I feel it safe and comfortable!

Offering Segregated Accounts:

ODL Securities UK
http://www.odlsecurities.com/uk/index.html


"Under mifid all regulated brokers in the uk when declaring a client in a retail status have to segregate the clients funds away form the companies own money though your funds will be in a pooled account along with all other clients , not personal

Chris laird"

Jeffrey,

FXCM is the way to go here. If you want your money to be safe with an NFA registered, US based firm, FXCM is more than competent

I dont think that you will find many reputable firms that have segregated micro account fund options.

I'm planning to open an account with activtrades.com. I've just read the "Customer Agreement" that you can find at: http://www.activtrades.com/index.asp...ex_openaccount (Term of Business.pdf).
At page 7 point 15.1 you can read that Client money will be placed on segregated accounts.

If you aim for maximum security of funds, i think its better to choose one of the retail offering of big banks like ABN Amro, UBS, RBS or Citi.

Found on elitetrader message board....

Retail Forex Brokers
Retail forex brokers or market makers handle a minute fraction of the total volume of the foreign exchange market. According to CNN, one retail broker estimates retail volume at $25-50 billion daily, [2]which is about 2% of the whole market. CNN also quotes an official of the National Futures Association "Retail forex trading has increased dramatically over the past few years. Unfortunately, the amount of forex fraud has also increased dramatically."

All firms offering foreign exchange trading online are either market makers or facilitate the placing of trades with market makers.

In the retail forex industry market makers often have two separate trading desks- one that actually trades foreign exchange (which determines the firm's own net position in the market, serving as both a proprietary trading desk and a means of offsetting client trades on the interbank market) and one used for off-exchange trading with retail customers (called the "dealing desk" or "trading desk").

Many retail FX market makers claim to "offset" clients' trades on the interbank market (that is, with other larger market makers), e.g. after buying from the client, they sell to a bank. Nevertheless, the large majority of retail currency speculators are novices and who lose money [3], so that the market makers would be giving up large profits by offsetting. Offsetting does occur, but only when the market maker judges its clients' net position as being very risky.

The dealing desk operates much like the currency exchange counter at a bank. Interbank exchange rates, which are displayed at the dealing desk, are adjusted to incorporate spreads (so that the market maker will make a profit) before they are displayed to retail customers. Prices shown by the market maker do not neccesarily reflect interbank market rates. Arbitrage opportunities may exist, but retail market makers are efficient at removing arbitrageurs from their systems or limiting their trades.

A limited number of retail forex brokers offer consumers direct access to the interbank forex market. But most do not because of the limited number of clearing banks willing to process small orders. More importantly, the dealing desk model can be far more profitable, as a large portion of retail traders' losses are directly turned into market maker profits. While the income of a marketmaker that offsets trades or a broker that facilitates transactions is limited to transaction fees (commissions), dealing desk brokers can generate income in a variety of ways because they not only control the trading process, they also control pricing which they can skew at any time to maximize profits.

The rules of the game in trading FX are highly disadvantageous for retail speculators. Most retail speculators in FX lack trading experience and and capital (account minimums at some firms are as low as 250-500 USD). Large minimum position sizes, which on most retail platforms ranges from $10,000 to $100,000, force small traders to take imprudently large positions using extremely high leverage. Professional forex traders rarely use more than 10:1 leverage, yet many retail Forex firms default client accounts to 100:1 or even 200:1, without disclosing that this is highly unusual for currency traders. This drastically increases the risk of a margin call (which, if the speculator's trade is not offset, is pure profit for the market maker).

According to the Wall Street Journal (Currency Markets Draw Speculation, Fraud July 26, 2005) "Even people running the trading shops warn clients against trying to time the market. 'If 15% of day traders are profitable,' says Drew Niv, chief executive of FXCM, 'I'd be surprised.' " [4]

In the US, "it is unlawful to offer foreign currency futures and option contracts to retail customers unless the offeror is a regulated financial entity" according to the Commodity Futures Trading Commission [5]. Legitimate retail brokers serving traders in the U.S. are most often registered with the CFTC as "futures commission merchants" (FCMs) and are members of the National Futures Association (NFA). Potential clients can check the broker's FCM status at the NFA. Retail forex brokers are much less regulated than stock brokers and there is no protection similar to that from the Securities Investor Protection Corporation. The CFTC has noted an increase in forex scams [6].
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Money And Emotions Don't Mix

This is a joke right?

If I look to keep my money safe, I go to a bank.

If I look not to lose trading forex..... I stay away from FXCM.

FXCM must have the worst reputation in the market, it can't even get a decent PR team to clear its name. I would rather give my money to a mexican monkey, a blind accountant, or even a broke crackhead than giving it to FXCM.

Yeah, Im funny.....

+1 couldn't say any better

Offering a segregated account:

EuroOrient Securities and Financial Services Ltd- www.FxPro.com

From web site:

"We are a licensed financial services company in the European community, we follow strict laws, regulations and European directives(i.e. MiFID), our clients' money are kept in segregated account."

I often wonder if that is a function of them being the largest broker and us hearing the complaints of the uninitiated after blowing their accounts.

Any successful lawsuits against FXCM?

I don't know the answer to that but I suspect it is "no."

Thank you all for your replies and input. I am keeping a running tally of all the brokers offering segregated accounts in the first post of this thread.

I found this to be important taken from this post:
http://www.forexfactory.com/showpost...78&postcount=2

"I asked a broker in the UK (a huge broker) about this.. his email said.

Quote:
If a broker offers to seg your money the actual holding account will still be in the name of the company and therefore not protected in the event of bankruptcy.
So what you really need to ask is, is this segregated account in the CLIENTS name or their COMPANIES name.

In Australia, forex brokers open an account in the clients name - which is held in TRUST - and is totally safe.
The only downside to Australian brokers.. they slip you, requote you, trade against you, don't fill you.. etc.. "

New broker added, check post 1

Looking at Dukascopy chart you need 500k for segregated account?

http://www.dukascopy.com/swiss/engli...ding_accounts/


I have been trading live using ADM for several years and execute trades on the Currenex platform.

http://www.currenex.com/index.html

They are number three in CFTC FCM list. The direct link for last month to CFTC website is provided below. I am not sure what the minimum is to open an account? You must contact an IB. Here is there website. You can only open an account via an IB.

http://www.adm.com/en-US/Pages/default.aspx


http://cftc.gov/stellent/groups/publ...cmdata1008.pdf

In fact, there are two steps. Here is what's happening with my broker (Alpari UK):
- Segregated account of up to 5k. And no, it doesn't belong to the broker so this is money you should get back if something goes wrong.
- FSA/FSCS protection. Less talked about but make you realize why you need a FSA regulated broker. This is the kind of protection bank customers get : if the bank disappear, most of your money (unless you are super rich) will be secured.

If you want, here are the facts. NO ONE offers the kind of segregated accounts you are hoping to find. Many people will read this and say "Oh, no, no, nooo! My broker offers me one, yes sireeee! He told me so, and it says it on the website too, see, look..."client accounts are segregated "

[i]Well actually, no, they are not. What in fact they are doing with clients is playing a word game. Client accounts are segregated form the the broker's operating capital, by any civilized country's law this is a requirement. BUT, and it's a biggie, you have to understand that this client account is still in the name of the broker, not in yours. So, in the event of Ch. 11, who knows what will happen to all your funds.

Yes, Dukas and ACM by the way do offer you a way, this is what they call Client Bank Guarantees. For a certain account size these 2 Swiss brokers will allow you to either keep your money in your personal bank, or place it in an intermediary, neutral, bank where the account will be in your name. The broker has no claim, bar your trading losses (!), to any of that money. The bank Guarantee is an official statement from the bank proving that the required amount of funds do actually exist.

Now, let's just add the fact that very shortly ACM and perhaps some other Swiss brokers will be receiving their banking Licence, FYI...in Switzerland, any Swiss bank account holder's funds are insured 100% by the government.