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Is your money safe with your broker?

  • #81
  • Dec 27, 2012 4:03am Dec 27, 2012 4:03am
Quoting undergroundz
I traded couple months ago and my money is safe with my broker, hotforex.

The broker belonged to FSC and it's a trustful broker. I have researched before invest my money to them. Moreover, I have withdrawn successful 3 times with no delay time.
Yes, the Financial Services Commission of Mauritius is a tough regulator. You will be safe.
  • #82
  • Jan 25, 2013 2:19pm Jan 25, 2013 2:19pm
Quoting ZexyLady
I dare not deposit much as I'm not confident with my lack of experience. My max is $2k (not that I have a lot of money).

But the one thing that I considered before I started with my current broker is their trust account in which my fund is totally off their balance sheet. You can check out whether your broker offer trust account (that means your fund are 100% safe inside your trust even if they go bankrupt or close down). You need to pay a min setup fee of $50 though.

And on top of that, make sure your broker is regulated. Do proper research...
Hi ZexyLady, Can you share who your broker is that offers a trust account with a $50 setup fee? In what country is your broker located and who are they regulated by?

Thanks and I'm looking forward to hearing from you.
  • #83
  • Jan 27, 2013 9:20am Jan 27, 2013 9:20am
Quoting global3
Thank you for your response fugly, now suppose you are trading for example through a US or UK broker but you are not a US or UK citizen nor living in the US or UK, I suppose that you would you need to insure your deposit with that broker through a US or UK insurance company respectively and if so, what insurance companies in the US or UK would be best for that purpose and can such an insurance be take out online?

The so-called protection offered by the Securities Investor Protection Corporation (SIPC) in the US is practically useless since it...
Recovering clients funds is irrelevant when it comes to the FSCS compensation within the limits, i think other FSA members will share to pay the FSCS compensation and i think it includes off-shore clients as well .
  • #84
  • Jan 29, 2013 9:40pm Jan 29, 2013 9:40pm
Quoting tar
Recovering clients funds is irrelevant when it comes to the FSCS compensation within the limits, i think other FSA members will share to pay the FSCS compensation and i think it includes off-shore clients as well .
Do you mean that there is no need to recover clients' funds because the funds will be readily available so there will be a minimal waiting period.
  • #85
  • Jan 29, 2013 10:46pm Jan 29, 2013 10:46pm
Quoting global3
Do you mean that there is no need to recover clients' funds because the funds will be readily available so there will be a minimal waiting period.
I meant even if they didnt recover clients funds you can ask for the FSCS's compensation , here is some good Qs about MF global :

http://www.fscs.org.uk/what-we-cover...bal/index.html

check Qs 5 , 12 , 13 , 14
  • #86
  • Jan 30, 2013 9:54am Jan 30, 2013 9:54am
Yes, absolutely, I'm trading at DCFX Broker, I love their fastness the most. The spread is good ( 1.5-2 pips in case of EURUSD).
  • #87
  • Jan 31, 2013 1:52am Jan 31, 2013 1:52am
Quoting TheMaxx
Yes, the Financial Services Commission of Mauritius is a tough regulator. You will be safe.
So are you trading with hotforex or any broker belonged to FSC, Maxx?
  • #88
  • Jan 31, 2013 6:44am Jan 31, 2013 6:44am
Quoting undergroundz
So are you trading with hotforex or any broker belonged to FSC, Maxx?
I was being sarcastic - I would never trade with a broker regulated in Mauritius or any similar offshore jurisdiction. For me I would only open an account with an EU, US, Swiss or Australian regulated broker - or something similar
  • #89
  • Jan 31, 2013 8:45am Jan 31, 2013 8:45am
I'm not sure if it really matter where regulated broker. If they really pay money it doesn't matter for me with whom they are regulated.
  • #90
  • Feb 25, 2013 9:08am Feb 25, 2013 9:08am
With some reliable brokers its safe, with some its not..
  • #91
  • Feb 25, 2013 10:58am Feb 25, 2013 10:58am
Quoting Coleen
I'm not sure if it really matter where regulated broker. If they really pay money it doesn't matter for me with whom they are regulated.
The only reason that matter where is regulated is in case they "do not pay" .
Regulation by itself mean nothing. Being regulated in a country where "Investors Compensation Funds" exist for
forex traders is what count.

For example, USA and Australia seems to have very strict regulation laws. But so what, If a forex Broker decide to run away with the money,
or act negligent, or whatever the investor lose it all.

In the UK, Switzerland, and some European Union countries they have these Funds,,.. so if broker run away with the money, you make a claim
and the "Fund" reimburse your money.

J.
  • #92
  • Feb 25, 2013 7:01pm Feb 25, 2013 7:01pm
Quoting jeuro
For example, USA and Australia seems to have very strict regulation laws. But so what, If a forex Broker decide to run away with the money, or act negligent, or whatever the investor lose it all.
Actually no. ASIC are very good at surveillance of Australian financial companies. Even if a company was to do something so criminal in Australia, the law is quite strict in the handling of client money as well as the segregation of said funds from company money. Australian companies are also required to have insurance.

If an Australian broker goes down, you are more likely than not to get 100% of your funds due to you since the law clearly states that is the case.

You may argue that it's not the same as in Switzerland or UK, but the likelihood of a broker just running away with the money is very unlikely in Australia with the controls put in place. It's also not in our nature
  • #93
  • Feb 25, 2013 7:54pm Feb 25, 2013 7:54pm
I know this has been awhile ago but it's worth addressing the first page - Peregrine Financial Group (one of the supposed robust firms) - http://bit.ly/LS6ig5
  • #94
  • Feb 25, 2013 8:37pm Feb 25, 2013 8:37pm
If you are trading with serious money try your local trusted banks.They usually offer very low leverage of 1/20-25 max.Your money will be 99.9% safe unless the bank go bust.They even pay you interest.
  • #95
  • Feb 26, 2013 1:06am Feb 26, 2013 1:06am
Quoting FXOjafar
Actually no. ASIC are very good at surveillance of Australian financial companies. Even if a company was to do something so criminal in Australia, the law is quite strict in the handling of client money as well as the segregation of said funds from company money. Australian companies are also required to have insurance.

If an Australian broker goes down, you are more likely than not to get 100% of your funds due to you since the law clearly states that is the case.

You may argue that it's not the same as in Switzerland or UK, but the likelihood...
As a company Rep of course you recourse to how "strict" the laws are, "controls" and so on. But the fact still remain. For example, if FXOpen
mishandle (voluntary or involuntary) clients money, and regulator intervene, and they find out that 70% of clients money is gone. Most likely a bankruptcy would be file and regulator will liquidate all assets if any. After all is said and done, Clients will get that 30% left. And absolutely NO ONE, not the regulator, not the law, NO ONE will pay up the remaining 70% to clients.

That is the whole difference with Countries were "Investor Compensation Funds" are in place such Swiss and UK and a few other European Countries.
These funds will dish up that 70% to investors.

You, as an employee may say and argue that the likelihood of something like the hypothetical example is slim happening in Australia, but what else can you say. If happens you will probably be the last one to know. Only when regulator walk in and freezes all operations.

Do Am I saying that Australia has bad Brokers??? Do I question how "strict" regulators are? or the "Controls" in place?? Not really, just stating facts related to the subject of this thread.

J.
  • #96
  • Feb 26, 2013 1:37am Feb 26, 2013 1:37am
Quoting jeuro
As a company Rep of course you recourse to how "strict" the laws are, "controls" and so on. But the fact still remain. For example, if FXOpen
mishandle (voluntary or involuntary) clients money, and regulator intervene, and they find out that 70% of clients money is gone. Most likely a bankruptcy would be file and regulator will liquidate all assets if any. After all is said and done, Clients will get that 30% left. And absolutely NO ONE, not the regulator, not the law, NO ONE will pay up the remaining 70% to clients.

That is the...
This is why we have insurance to cover claims. If a company was so grossly negligent as to lose clients funds by mismanaging margin funds with liquidity providers, they would be discovered by ASIC before too much went missing anyway. I doubt they would even get a license in the first place!

Use of client funds is strictly controlled in Australia. FXOpen for example cannot use clients funds for any other purpose than covering client's margin from their own trading. You can bet that as soon as something untoward started happening in our client trust accounts, ASIC would be all over us in a second.

We have no need for a compensation fund. Our regulator is proactive and we are all ensured anyway.
  • #97
  • Feb 26, 2013 3:49am Feb 26, 2013 3:49am
We get it Jafar.
Your job is to tell how wonderful and trustworthy Australian Companies are. How strict regulator are and how much control there is.
And because of how good you are there is "no need" for Compensation funds.

Our job as investor is to find out the facts. Needed or not, I sleep a lot easy knowing that a third party "Fund" cover my back.
No need to be a rocket science expert to understand it.

According to your thinking, UK, the Swiss and the other EU countries that have them, must be all crooks compare to Australians and that
is why are needed. ..right?

J.
  • #98
  • Feb 26, 2013 4:47am Feb 26, 2013 4:47am
Quoting jeuro
We get it Jafar.
Your job is to tell how wonderful and trustworthy Australian Companies are. How strict regulator are and how much control there is.
And because of how good you are there is "no need" for Compensation funds.
No. I don't work for ASIC

Quoting jeuro
Our job as investor is to find out the facts. Needed or not, I sleep a lot easy knowing that a third party "Fund" cover my back.
No need to be a rocket science expert to understand it.
There are plenty of ways to get your funds including the insurance route.

Quoting jeuro
According to your thinking, UK, the Swiss and the other EU countries that have them, must be all crooks compare to Australians and that
is why are needed. ..right?

J.
No I am not saying that. Maybe you just don't understand the Australian business mentality. Actually, we are proud of being compliant with the law. ASIC won't even allow us to be Directors unless we are citizens of good repute.

Let us agree to disagree. Having a compensation scheme at the regulator shouldn't be a major consideration when choosing where to trade. It also shouldn't form a large part of any company's marketing strategy. The services that your company provides and how they treat their clients should be of more importance. Regulation is just the icing on the cake that can close the deal.
  • #99
  • Feb 26, 2013 7:14am Feb 26, 2013 7:14am
Well, every month I`m withdrawing around 900 to 1k from Hotforex (My profit) and I`ll surely say that My money is safe with them.
  • #100
  • Feb 27, 2013 6:07am Feb 27, 2013 6:07am
where is the money.

ok, this may be a really newbie question, but i am wondering where the money comes from?

lets asumme that i deposit 100 usd with a ECN broker and i make those 100 dollar to 10000 usd. Who will pay me my profit off 9900 usd? Is it the brokers money or is it a several traders with other brokers who lost the 9900 usd? If yes then i asumme there must be tons of wire transaction every day from one brokker to another? Or how does it work?

And lets assume that i would open a brokerage, will i then need to have lots of millions on my account or is it only if i were a market maker?

Sorry if my english isnt so good..
Karma Will give your pips!
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