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Dukascopy Europe vs Dukascopy Bank SA 7 replies

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Swiss Law and Dukascopy.com/Finex.com 21 replies

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Dukascopy

@Roughneck: Okay I'm curious. Pm sent. I'll post the name here (you're right, it's better if you don't do it since you're new).

@jeuro: haha sorry. It's all clear now.
Quoting roughtrader
Im shocked this would happen with Dukascopy, but I guess it is now a fact, do your self a big favor and withdraw your money asap, I have now switched to Tradestation, I recommend them
TradeStation was the frontend software that Gain Capital used to rip it's clients off.

In 2010 the NFA ordered Gain Capital to pay a $459,000 fine and alleged that Gain engaged in abusive margin, liquidation and price slippage practices that benefited Gain to the detriment of its customers. In addition to the fine amount, Gain had to provide appropriate refunds to its customers as a result of these detrimental margin, liquidation and asymmetrical slippage practices.

TradeStation kept the technology, split off from Gain, and became their own brokerage house.


Here's some highlights of TradeStation's new Risk Disclosure Statement.

YOUR DEPOSITS WITH THE DEALER HAVE NO REGULATORY PROTECTIONS.

Your dealer may commingle your funds with its own operating funds or use them for other purposes.

In the event your dealer becomes bankrupt, any funds the dealer is holding for you in addition to any amounts owed to you resulting from trading, whether or not any assets are maintained in separate deposit accounts by the dealer, may be treated as an unsecured creditor’s claim.

YOU ARE LIMITED TO YOUR DEALER TO OFFSET OR LIQUIDATE ANY TRADING POSITIONS SINCE THE TRANSACTIONS ARE NOT MADE ON AN EXCHANGE OR MARKET AND, AND YOUR DEALER MAY SET ITS OWN PRICES.

Your dealer may offer any prices it wishes.

Your dealer may offer different prices to different customers at any point in time on its own terms.

The prices offered by your dealer may or may not reflect prices available elsewhere at any exchange, interbank, or other market for foreign currency.


http://www.tradestation.com/site-wid...sure-statement
Quoting newbie168
Kudos to Marv for his efforts of putting light on Dukascopy's "ECN"

Indeed, Dukascopy has created its own definition of ECN.

As of Dec 2011, Dukascopy has equivalent of CHF68million of client deposits while for the entire 2011 Dukascopy has made CHF30million of trading income (I can assume the majority of it is from trading vs its clients). A very profitable operation to afford 200 employees (Switzerland is home to one of the highest paid professionals in the world) not to mention so many promotional events.

For the last 3 months, OANDA...
Who said client funds are segregated at Dukascopy? Most standard accounts aren't segregated.

Unless you have an actual bank account in your own name on deposit with Dukascopy, your funds are commingled under the IB's name. So in theory, your funds are insured for 100K, but if it's under the name of the IB, depending on the amount of clients signed under Raivis or any other entity, your share is the fractional proportion of the insurance total allowed on that account.

Check your contract, who you signed your funds over to, and whose name they are in.

Dukascopy is a Russian broker who were forced to comply with the Swiss banking codes to remain in business which is why they became a bank. It wasn't done under their own free will.

When discussing the deposit protections and even the supposed ECN SWFX market they make, the language is very hard to nail down unless you really understand the legality and nuance of it.
Quoting J B Collins
Here's some highlights of TradeStation's new Risk Disclosure Statement.

YOUR DEPOSITS WITH THE DEALER HAVE NO REGULATORY PROTECTIONS.

Your dealer may commingle your funds with its own operating funds or use them for other purposes.

In the event your dealer becomes bankrupt, any funds the dealer is holding for you in addition to any amounts owed to you resulting from trading, whether or not any assets are maintained in separate deposit accounts by the dealer, may be treated as an unsecured creditor’s claim.

YOU ARE LIMITED TO YOUR DEALER...
I keep saying and I am saying it again:

Either you have the abilities to go high-end, or, why not give Futures trading a chance, really!

Regulated centralized liquidity and rule books with a more or less even playing field to all participants (ok, you have co-location hft'ers there to put up with, but still.)
Quoting Roughneck
I keep saying and I am saying it again:

Either you have the abilities to go high-end, or, why not give Futures trading a chance, really!

Regulated centralized liquidity and rule books with a more or less even playing field to all participants (ok, you have co-location hft'ers there to put up with, but still.)
Yes.

I only trade futures, the emini, and commodities.

At least you have CFTC protection and some recourse in the event a problem arises with the broker.

if you have Spot checked off on your account, it opens the door to a lot of liabilities with the RDS.
Quoting J B Collins

I only trade futures, the emini, and commodities.

The thing is, and we all know this, when FX trading became available to trade online (back in the days when CMC had offered the very first electronic front-end for retail trading) it had changed the whole industry as it had opened the doors to let anyone in that wanted to dabble and have a go at trading FX, it was a novel.

In general I think, most retail traders either do trading as a hobby, or are more into long-term investing rather than active managing and/or day trading.

Therefore, MT4 had provided just what everyone was after, some machine that goes bling bling buy here and sell here and best would be if all this is happening while at work or fast asleep.

The reality is, that automated trading/algo trading is really a high-end game, an industry led by the most sophisticated algorithm programs run on the most top of the range computer equipment, it is not thought for the retail sector.

For obvious reasons, retail traders want automated trading, and this best done via MT4 and they want brokers that are able to offer funds security and good liquidity; the reality check is: this never happened and it probably never will happen.

And then of course, there are people that neither fit the pure bank trader/prop trader-model nor the pure retail trader either, they are somewhere in between the two - needing good liquidity paired with a good, safe and sound broker, but what they certainly don't need is some sort of a shady MT4 brokerage or some unregulated bucketshop or market making broker as most trading is done via a separate GUI front-end and charting via the so many available charting vendors out there...
Quoting newbie168
Kudos to Marv for his efforts of putting light on Dukascopy's "ECN"

Indeed, Dukascopy has created its own definition of ECN.

As of Dec 2011, Dukascopy has equivalent of CHF68million of client deposits while for the entire 2011 Dukascopy has made CHF30million of trading income (I can assume the majority of it is from trading vs its clients). A very profitable operation to afford 200 employees (Switzerland is home to one of the highest paid professionals in the world) not to mention so many promotional events.

For the last 3 months, OANDA...
----------------------
"Nowadays with so many abuse on segregated accounts (PFGBest, MFGlobal and another broker in UK which went under), it's difficult to trust on the segregation promise."

FULLY AGREE.........

WHY I AM ASKING
HAS ANYONE COME ACROSS SUCH A CLAIM AS BELOW?

.............................
............................
...........................
"Client money deposited at quality depository banks. Client assets are
separated from our company's assets and from the assets of other clients."

S_E_P_A_R_A_T_E_D.........!

THIS IS FROM WHSELFINVEST SITE

YOUR COMMENTS PLZ
Quoting J B Collins
Who said client funds are segregated at Dukascopy? Most standard accounts aren't segregated.

Unless you have an actual bank account in your own name on deposit with Dukascopy, your funds are commingled under the IB's name. So in theory, your funds are insured for 100K, but if it's under the name of the IB, depending on the amount of clients signed under Raivis or any other entity, your share is the fractional proportion of the insurance total allowed on that account.

Check your contract, who you signed your funds over to, and whose name they are in.

Dukascopy is a Russian broker who were forced to comply with the Swiss banking codes to remain in business which is why they became a bank. It wasn't done under their own free will.

When discussing the deposit protections and even the supposed ECN SWFX market they make, the language is very hard to nail down unless you really understand the legality and nuance of it.
Quoting Roughneck
The thing is, and we all know this, when FX trading became available to trade online (back in the days when CMC had offered the very first electronic front-end for retail trading) it had changed the whole industry as it had opened the doors to let anyone in that wanted to dabble and have a go at trading FX, it was a novel.

In general I think, most retail traders either do trading as a hobby, or are more into long-term investing rather than active managing and/or day trading.

Therefore, MT4 had provided just what everyone was after, some machine that goes bling bling buy here and sell here and best would be if all this is happening while at work or fast asleep.

The reality is, that automated trading/algo trading is really a high-end game, an industry led by the most sophisticated algorithm programs run on the most top of the range computer equipment, it is not thought for the retail sector.

For obvious reasons, retail traders want automated trading, and this best done via MT4 and they want brokers that are able to offer funds security and good liquidity; the reality check is: this never happened and it probably never will happen.
Excellent posts, had to re-post them.

Quoting Roughneck
And then of course, there are people that neither fit the pure bank trader/prop trader-model nor the pure retail trader either, they are somewhere in between the two - needing good liquidity paired with a good, safe and sound broker, but what they certainly don't need is some sort of a shady MT4 brokerage or some unregulated bucketshop or market making broker
Which is exactly where I personally am. Luckily it's possible these days (and worth it imo) to find something that fits the bill.
Quoting J B Collins
TradeStation was the frontend software that Gain Capital used to rip it's clients off.

In 2010 the NFA ordered Gain Capital to pay a $459,000 fine and alleged that Gain engaged in abusive margin, liquidation and price slippage practices that benefited Gain to the detriment of its customers. In addition to the fine amount, Gain had to provide appropriate refunds to its customers as a result of these detrimental margin, liquidation and asymmetrical slippage practices.

TradeStation kept the technology, split off from Gain, and became their...
Yes for that and other reasons they are not using Gain anymore, as I understand they now do their own clearing,
I only been with them for a cupple of months but I like them, they seem to be a very professional broker with a lot going for it's clients, thats something I never saw with Dukascopy, and the software simply kick ass, it's a blessing to get rid of Jforex
Bulls are stupid Animals!especially when Im short!
Quoting Marv
Excellent posts, had to re-post them.

Which is exactly where I personally am. Luckily it's possible these days (and worth it imo) to find something that fits the bill.


Dear Traders,

In reference with J B Collins’s post dated 15 August 2012 and quoted by Marv on the same day we shall correct as follows.

Like with all other banks in Switzerland, clients’ funds deposited with Dukascopy Bank SA are commingled with the own funds of Dukascopy Bank SA. Currently Dukascopy Bank SA has deposited 66% of its cash (including cash received from clients) with the Swiss National Bank.

In order to segregate their funds from Dukascopy Bank SA, clients have two options: either they deposit their funds with one of our Partner Custodian Banks (http://www.dukascopy.com/swiss/english/forex/custodian/) or they provide Dukascopy Bank SA with a bank guarantee issued by a bank of their choice.

Each client of Dukascopy Bank SA is protected up to CHF 100’000 in accordance with the Swiss law (http://www.einlagensicherung.ch/en) regardless their possible IBs. IBs have no relation at all with this matter. We invite you to follow the link above in order to get proper information.

Dukascopy Bank SA is not a Russian broker but a Swiss bank owned by permanent Swiss residents exclusively.

Best regards,

Dukascopy Bank SA

Originally Posted by J B Collins [IMG]file:///C:%5CUsers%5CLAUREN%7E1.BEL%5CAppData%5CLocal%5CTemp%5Cmsohtmlclip1%5C01%5Cclip_image001.gif[/IMG]

Who said client funds are segregated at Dukascopy? Most standard accounts aren't segregated.

Unless you have an actual bank account in your own name on deposit with Dukascopy, your funds are commingled under the IB's name. So in theory, your funds are insured for 100K, but if it's under the name of the IB, depending on the amount of clients signed under Raivis or any other entity, your share is the fractional proportion of the insurance total allowed on that account.

Check your contract, who you signed your funds over to, and whose name they are in.

Dukascopy is a Russian broker who were forced to comply with the Swiss banking codes to remain in business which is why they became a bank. It wasn't done under their own free will.

When discussing the deposit protections and even the supposed ECN SWFX market they make, the language is very hard to nail down unless you really understand the legality and nuance of it.

I understand Dukascopy is a registered Swiss bank and that the principles would have to establish residency there. I was under the impression Dukascopy was a Russian Brokerage because Bogdan Prensilevich, the Dukascopy Chairman is Russian. My mistake.

For clarification, since it's difficult to understand your answer, if I were to open a standard non-segregated Dukascopy account, the full amount of my deposited funds would be insured up to $100,000?

If you can state this here, then my apologies in advance for the misunderstanding. My impression was the rules regarding FINMA insurance was it applied to individual depositor accounts, not $100,000 for each client whose funds are in a commingled broker account.



Quoting bellieres
[left]


Dear Traders,

In reference with J B Collins’s post dated 15 August 2012 and quoted by Marv on the same day we shall correct as follows.

[left][left][font=Arial]Like with all other banks in Switzerland, clients’ funds deposited with Dukascopy Bank SA are commingled with the own funds of Dukascopy Bank SA. Currently Dukascopy Bank SA has deposited 66% of its cash (including cash received from clients)...
Dear J B Collins,
Mr Prensilevich is a Swiss citizen residing in Switzerland.

Concerning the protection of your funds, provided that you are a client of Dukascopy Bank SA the full amount of your deposit with Dukascopy Bank SA is guaranteed up to 100’000 Swiss francs.

 By “IB” we understand “Introducers”. Clients brought to Dukascopy Bank SA by Introducers open an account in their own name and therefore become clients of Dukascopy Bank SA and benefit from the Swiss deposit protection. Dukascopy Bank SA may accept commingled funds only from duly regulated financial intermediaries such as other banks, brokers including our white label partners, investment funds, etc.. In such case, the client of Dukascopy Bank SA is the financial intermediary itself.

 You are welcome to call us or to send an email to [email protected] or to [email protected] for further information.

 Best regards,
 Dukascopy Bank SA
bellieres,

Concerning Mr. Prensilevich, I didn't realize Russian was his second language. His speaking skills are quite good.

I also didn't realize Dukascopy had things structured so if a client were to open an account through an intermediary like Molecule 6 they would have the same FINMA protections as a depositor account.

Thank you for your clarification.
  • Post #1,974
  • Quote
  • Edited Aug 18, 2012 1:20am Aug 17, 2012 9:06pm | Edited Aug 18, 2012 1:20am
Quoting J B Collins
bellieres,

Concerning Mr. Prensilevich, I didn't realize Russian was his second language. His speaking skills are quite good.

I also didn't realize Dukascopy had things structured so if a client were to open an account through an intermediary like Molecule 6 they would have the same FINMA protections as a depositor account.

Thank you for your clarification.
Dukascopy belongs to Dr. Andrey Duka and his wife Ms. Veronika Makarova - both have absolute control of the bank having owned 99% of the bank's shares. I have only a slight concern with regards to their citizenship/residency/origin. The greater concern is: in my country, bank ownership by a family, is frowned upon as the risks are just too high, where an individual/family can have absolute control on the bank. Hence over the years, family-owned banks are forced to be IPO-ed and individual/family owners are forced to dilute their bank ownerships. Let's see if Dukascopy has a plan for an IPO in the future to strengthen its capital base.

Mr. Collins, if you want to do an investigative work, perhaps you may want to search the past history of Mr. Andreij Duka and his wife (may be a google search in Russian language).
How do they get the initial CHF22million to set up Dukascopy?
Was it an accounting method that value the software created by them so they have created their own CHF22million? or was the money obtained from other activities?

After all, Dukscopy conducts due diligence on their customers, it's only fair that the customers would also want to know how in the world Mr and Mrs Duka obtained their initial CHF22million.
  • Post #1,975
  • Quote
  • Edited Aug 18, 2012 1:03am Aug 17, 2012 9:20pm | Edited Aug 18, 2012 1:03am
Quoting bellieres

Like with all other banks in Switzerland, clients’ funds deposited with Dukascopy Bank SA are commingled with the own funds of Dukascopy Bank SA. Currently Dukascopy Bank SA has deposited 66% of its cash (including cash received from clients) with the Swiss National Bank.



Mr. Bellieres,

I have obtained information that the aggregate value of Dukascopy's USD account with JPMorgan in NY, either during intra days or end of days, is a huge proportion of the entire capital of Dukascopy.

If JPMorgan collapses, Dukascopy will be in great difficulty.

With regards to JPMorgan's London Whale trade, some bank analysts have pointed out that it only takes 2% decline in JPMorgan's total assets to completely bankrupt the bank. Given what's happening in Europe and JPMorgan's derivative exposure, it is not completely unthinkable if JPMorgan could go under. You may have realized now the US Congress has told the banks to take care themselves for the next wave of bankruptcies.

I realize that Dukascopy also maintains an account with UBS in Connecticut, but this account is small in comparison to Dukascopy's USD account with JPMorgan NY. Further UBS is not a popular bank for funds clearing and funds clearing is certainly not a focus of UBS' business.

Do you think Dukascopy can diversify the risk away from JPMorgan by adding more banks that focus on funds clearing yet have minimal business in investment banking like perhaps the Bank of New York Mellon, Wells Fargo Wachovia, HSBC USA or Standard Chartered USA?

lol

You're lucky if they listen to you about their spreads or even some secondary platform features, let alone where they keep their assets.

It's much easier to just find a more suitable bröker. Dukascopy is overrated anyway.
Quoting newbie168
[left][left][left]

Mr. Bellieres,

I have obtained information that the aggregate value of Dukascopy's USD account with JPMorgan in NY, either during intra days or end of days, is a huge proportion of the entire capital of Dukascopy.

If JPMorgan collapses, Dukascopy will be in great difficulty.

With regards to JPMorgan's London Whale trade, some bank analysts have pointed out that it only takes 2% decline in JPMorgan's total assets to completely bankrupt the bank. Given what's happening in Europe and JPMorgan's derivative exposure, it is not...

At the end, as any/all banks have the potential to hit the fence and heavily commingle with each other, .. it is no brain-er we must look into the compulsory requirement for Investor Compensation fund of each institution we make a direct deposit to.

Are the maximum of those compensation schemes.:

UK.. 50 000 pounds
EU 25 000 euros
USA temporarily 250 000 usd (probably stay there and never drop to 100 00 egain
Switzerland 100 000 CHF .. ????

Problem in the USA is that most brokers are not FDIC insured... so you have nothing. I believe not even trading via Citifx is FDIC insured. Yes, if you deposit the Money directly with Citibank as a client yes... But You deposit your money with Citifx ( a different entity then Citibank itself): The same if you trade with Dukascopy EU... are you insured to 100 000 chf? .. No, even that Dukascopy EU is fully own by Dukascopy Bank, they are organized in Latvia (EU) and fall into the 25 000 euros insurance compensation fund.

So, even that we need to do diligent investigation how much they are exposed to some other iffy institutions or Banks, ultimately, when/if crap hit the fence who know of the domino effect... and perhaps our only hope is that compensation fund deal.

So.. here is a few questions open questions for those working in the over over 100 000 usd - below 500 000 usd. . And wanting the best execution and security possible.

(And placing the issue to our individual traders level, as institutional crap may not be doable for most of us.)

So far, without going into a full research .The American FDIC 250 000 usd is the high amount covered by a compensation fund. And Switzerland Second. But in the USA most brokers, perhaps none, are FDIC insured... And Banks do not offer direct trading with them. ..and if they did.. the amount still is 250K,..right? .. and at first glance first logical option would be ... deposit the 250K in an USA Bank, and get a letter of credit.

Questions:
1 .. What broker or bank accepts letters of credit to trade?
2. Some good Outfits have been mention in this thread for operation
Like Lmax, via Currenex, API.. or whatever. Lmax is organized in the UK. ..Is 50 000 gbp the max of my security if Lmax hit the fence?
3. Is there any other way to secure deposits in between this 100K-500K?
of operation.

J.
.
Yes, I'm already aware of Andrey Duka and Veronika Makarova and their history. Mr. Prensilevich is not as well known to many traders. Whether Dukascopy is run by Russian interests or not isn't an issue for me, transparency is.

When information surrounding a company structure raises flags for me, especially when it involves them potentially holding significant amounts of my money, I pay close attention. After looking into Dukascopy and a few other brokers, I decided to go for a larger broker with better liquidity.

I'm in a similar position as Marv, so I can't go with a tier 1 ECN yet, but I'm slowly working my way up.


Quoting newbie168
Dukascopy belongs to Dr. Andrey Duka and his wife Ms. Veronika Makarova - both have absolute control of the bank having owned 99% of the bank's shares. I have only a slight concern with regards to their citizenship/residency/origin. The greater concern is: in my country, bank ownership by a family, is frowned upon as the risks are just too high, where an individual/family can have absolute control on the bank. Hence over the years, family-owned banks are forced to be IPO-ed and individual/family owners are forced to dilute their bank ownerships....
Attached Image
Quoting newbie168
If JPMorgan collapses, Dukascopy will be in great difficulty.
you are trolling, if JP goes down HBSC, GS, Bank of New York Mellon etc. all go down do to their derivatives exposure to one another...
Quoting J B Collins
Yes, I'm already aware of Andrey Duka and Veronika Makarova and their history. Mr. Prensilevich is not as well known to many traders.

Whether Dukascopy is run by Russian interests or not isn't an issue for me, transparency is.

When information surrounding a company structure raises flags for me especially when it involves them potentially holding significant amounts of my money, I pay close attention.

After looking into Dukascopy and a few other brokers, I decided to go for a larger (non- MT4) broker with better liquidity.

I'm in a similar...
Hi JB...
So what is the bottom line?
Who is that larger broker with better liquidity?
(I assume you are talking about their Assets liquidity and not the Liquidity they have access to..right?)

And, what would the maximum you would get out if that Larger Broker goes belly up? I mean, via Investor compensation Fund of the Country where they are regulated.

Thanks,

J.
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