Effects of Cyprus bailout deal on Cyprus-based Brokers | Forex Factory

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Effects of Cyprus bailout deal on Cyprus-based Brokers

  • #1
  • First Post: Mar 16, 2013 10:56am Mar 16, 2013 10:56am
http://www.businessinsider.com/cypru...ut-deal-2013-3 - effects on Forex and financial firms operating in Cyprus.
  • #2
  • Mar 16, 2013 5:55pm Mar 16, 2013 5:55pm
Should be interesting to attempt to withdraw funds from your broker's account Tuesday...
At least now there is a "legitimate" excuse to delay outgoing wires. I would assume
a lot of traders will want to get ALL their funds out at a 6.6 or 9.9% haircut.

As Bill Gross said, the return on capital is no longer a priority but rather to get your
capital returned.

Could be the death blow for those Cyprus based brokers without bank accounts outside
Cyprus. Who is going to wire money now to a Cyprus bank?

`
  • #3
  • Mar 16, 2013 6:04pm Mar 16, 2013 6:04pm
Lets hope we can get them back and they don't just disappear with it
  • #4
  • Mar 16, 2013 6:33pm Mar 16, 2013 6:33pm
This is legalised theft, plane and simple. Just wait and see, EU's first bank run is under way.
European bureaucrats just succeeded in destroying Cyprus financial industry.
  • #5
  • Mar 16, 2013 6:44pm Mar 16, 2013 6:44pm
Quoting Tom81
European bureaucrats just succeeded in destroying Cyprus financial industry.
European bureaucrats just succeeded in destroying financial industry.

Let the cacophony of fiat fapping begin...
Politics is the womb in which war develops.
  • #6
  • Mar 16, 2013 8:15pm Mar 16, 2013 8:15pm
There much more to it than meets the eye:

http://www.telegraph.co.uk/finance/c...ts-people.html
To improve is to change. To perfect, is to change often.
  • #7
  • Mar 16, 2013 11:22pm Mar 16, 2013 11:22pm
The question is, whether my money is safe with foreign banks in Cyprus or not? I have account with FXPro and i know they have their money with Barclays in Cyprus. Considering Barclays is not a local bank, is it safe or still at huge risk?
  • #8
  • Mar 17, 2013 6:59am Mar 17, 2013 6:59am
.
By the few comments I just wonder if anybody understood the article of the first post

Nothing to do with Brokers, and reasons to delay withdrawals, etc.
Actually, people not understating what is going on is but really cause Bank Runs.

Before, the heavy issues of the Banking exposure due to the problems around them
has been going for a long time. Now, that they do a bail out and sorof secure depositor
and incentive them.... now worry comes ??

Isn't that all Broker in Cyprus belong to the Cyprus compensation fund anyway?
I don't trade with any there, but I think everybody is secure up to 20 000 euros.


J.
  • #9
  • Mar 17, 2013 7:06am Mar 17, 2013 7:06am
I trade with fxpro and have sent them an email asking whats going on and if accounts are effected, either way I guess I'll find out at market open later.
  • #10
  • Mar 17, 2013 7:18am Mar 17, 2013 7:18am
Quoting jeuro
.
By the few comments I just wonder if anybody understood the article of the first post

Nothing to do with Brokers, and reasons to delay withdrawals, etc.
Actually, people not understating what is going on is but really cause Bank Runs.

Before, the heavy issues of the Banking exposure due to the problems around them
has been going for a long time. Now, that they do a bail out and sorof secure depositor
and incentive them.... now worry comes ??

Isn't that all Broker in Cyprus belong to the Cyprus compensation fund anyway?
I don't...
hello there,

you are correct about Cyprus problems have been around. But because of this bailout issue going on, lots of people (including financial institution) have worries and start to withdraw everything from the banks there which might cause huge instability to the banks. That's why im starting to have doubts but i dunno if people would withdraw their money from foreign banks like Barclays (which FXPro is using)

also, isn't that 20,000 euros thing only applies to Europeans?
  • #11
  • Mar 17, 2013 8:45am Mar 17, 2013 8:45am
Quoting rsg10z
hello there,

you are correct about Cyprus problems have been around. But because of this bailout issue going on, lots of people (including financial institution) have worries and start to withdraw everything from the banks there which might cause huge instability to the banks. That's why im starting to have doubts but i dunno if people would withdraw their money from foreign banks like Barclays (which FXPro is using)

also, isn't that 20,000 euros thing only applies to Europeans?
Yea, that is the problem. "panic" .
That is the exact purpose of Compensation Funds around the world. (and bail outs) To avoid the panic of rushing to withdraw
deposits in the Banks, which of course cause real crisis. So, they guarantee certain amount to each client.
Regarless their place of residence (answering your question about Europeans only). But people in general panic anyway,
including the ones reading these posts.

But forex broker in general are not exposed to same the issues of the Banks, Banks are holding Bonds (Cyprus Banks hold quite a lot
Greeek bonds) , Real Estate mortgages, etc. Stuff what have lost value in recent years. So, in the event that healthy investors
start withdraws their money, The banks just end up with the bad paper, and in trouble.

Forex Broker hold only Client's money an usually deposited with their Liquidity providers, that in most cases are major Banks
like Barclays you mentioned. So, very much in a different world.

So, even in the event that for some stupid reason , A forex broker has a Cyprus bank as their Liquidity provider, and has clients
money there, the Compensation Fund still protects the client.

Ultimately, that is why is so important to work with Broker that are in countries that this Funds extend benefits to forex traders,
like the Swiss, UK, and several EU countries. But it is Interesting that most traders have more interest in "regulated" brokers
then this Compensations Funds. Australia is the biggest example, it is well known that Australia has a great and strict regulations and strict enforcement of them... but in the event that something happens, NO ONE will give you a penny of your investmente, because
they do not a a Fund there. In the other hand, everybody may thing that Cyprus Regulations is not so strict, but so what, Clients are covered by the Cyprus Fund.

So, relax. Ask your brokers a) where the clients money is b) if still covered by the compensation Fund.


J.
  • #12
  • Mar 17, 2013 9:23am Mar 17, 2013 9:23am
Funny post...

Quote
That is the exact purpose of Compensation Funds around the world

You do realise the thieving bastards did this after the markets closed, passed legislation the following day (saturday) and will take the money before banks re-open, that's outright theft and tacit acquiescence.

I know there's no rule-of-law in these 'offshore' entities, but any change of policy should be made aware upfront, so people have the right to exercise their choice.

There is no compensation fund if there's a bank run, it's the one thing governments and central banksters fear the most as it exposes their fiat / fractional reserve ponzi scheme.

Quote
But forex broker in general are not exposed to same the issues of the Banks

You live in cloud cuckoo land, do you think brokers have a moral code of conduct if it all goes tits up?
Politics is the womb in which war develops.
  • #13
  • Mar 17, 2013 9:26am Mar 17, 2013 9:26am
Cyprus Bank Holiday Extended Through Tuesday As Confusion Spreads
Politics is the womb in which war develops.
  • #14
  • Mar 17, 2013 9:59am Mar 17, 2013 9:59am
Dear members,

Your funds are 100% secure with FxPro.

Please be assured that the security of your funds is a top priority for FxPro and in order to ensure the highest level of security, the Firm is partnered with some of the world’s leading banks, Barclays and Credit Suisse. Any available funds in your FxPro trading account remain unaffected as FxPro guarantees the full amount of our clients’ funds. This is possible because FxPro partners with banks located abroad and not in Cyprus.

You may withdraw at any given time as usual and your request will be processed as normal.

Our Customer Support is available via live chat, phone +44 (0) 203 151 5550 or email [email protected] if you have any further questions.

Regards,

FxPro Group.
Trading CFDs involves significant risk of loss.
  • #15
  • Mar 17, 2013 10:04am Mar 17, 2013 10:04am
Quoting FiatFap

You do realise the thieving bastards did this after the markets closed, passed legislation the following day (saturday) and will take the money before banks re-open, that's outright theft and tacit acquiescence.

I know there's no rule-of-law in these 'offshore' entities, but any change of policy should be made aware upfront, so people have the right to exercise their choice.
What are you talking about? The IMF will be "inserting " 10 billion euros, not taking money out. The 10% tax imposed is a form
of "discouragement" for depositors to make a bank run. What you expect? Telling everybody, hey come and take your money out
before we apply the tax? It seem you live in cloud cukkoo. I know it sucks, but that was not my point. Does this 10% apply to Brokers?
I dont know,,, but I know there are not Banks... so it may not apply,
Quoting FiatFap
There is no compensation fund if there's a bank run, it's the one thing governments and central banksters fear the most as it exposes their fiat / fractional reserve ponzi scheme.
Of course there is. That is the nature of compensations Funds. Avoid bank Runs, by guaranteeing some money to depositors.
So, even if people run to the Banks on monday, eats the 10% tax and take the money away anyway, and tha bank collapses,
the clients still are covered by the Fund. Read Wikipedia or something before you post. Maybe google "investors compensantion funds schemes" The only difference between country to country is that in some the coverage does not extend to risky investemtes such as forex.

Quoting FiatFap
do you think brokers have a moral code of conduct if it all goes tits up?
well.. if you do not trust your Broker, why you trade there... that is on you..is it?
  • #16
  • Mar 17, 2013 10:06am Mar 17, 2013 10:06am
it doesn't matter what the law says. FxPro is owned by Russians, and EU wants them out of Cyprus. They might need to move the funds to Hellenic Bank before sending withdrawals and get "taxed" there.
  • #17
  • Mar 17, 2013 10:20am Mar 17, 2013 10:20am
Quoting jeuro
What are you talking about? The IMF will be "inserting " 10 billion euros, not taking money out. The 10% tax imposed is a form
of "discouragement" for depositors to make a bank run. What you expect? Telling everybody, hey come and take your money out
before we apply the tax?
I don't understand your thinking.

Capital saved will be hit for 10% and applied retrospectively, so why on earth would people want to leave money in the bank if they can earn 10% by stashing money under their mattress?

IMF can invest all they want, the cat is out the bag and anyone with any sense will pull their money from their accounts.

Please explain how stealing 10% from people accounts over a bank holiday which is now extended can 'discourage' people from withdrawing money?
Politics is the womb in which war develops.
  • #18
  • Mar 17, 2013 10:25am Mar 17, 2013 10:25am
Quoting FxPro Global
Dear members,

Your funds are 100% secure with FxPro.
Had to quote this for posterity; sounds too much like PFGBest and MFGlobal news-speak.
Politics is the womb in which war develops.
  • #19
  • Mar 17, 2013 11:11am Mar 17, 2013 11:11am
Quoting FiatFap
I don't understand your thinking.

Capital saved will be hit for 10% and applied retrospectively, so why on earth would people want to leave money in the bank if they can earn 10% by stashing money under their mattress?

IMF can invest all they want, the cat is out the bag and anyone with any sense will pull their money from their accounts.

Please explain how stealing 10% from people accounts over a bank holiday which is now extended can 'discourage' people from withdrawing money?

Well, your thinking apply to future deposits... but too late for the one already have money in their Banks. Anybody that had 100 000 now have 90 000. Thats it . They can withdraw only 90 000 ..right? So, one one can "earn" anything by withdrawing.

But reading the article from the first post, it seem that the 10% is a "withhold" of some sort, that would not be applicable if investor leave the money in. So.. it is a bit confusing and definitely will be confusing for a few days.

One thing is for sure... it sucks for those that had saving/investments money in their Banks

J.
  • #20
  • Mar 17, 2013 11:41am Mar 17, 2013 11:41am
..
ok, I think the tax is final... 6+- to 9,9% depending in amount of deposit is lost for investor in Cyprus banks.

But here is the question... does this % apply to deposits in forex brokers??? ... I read the tax is 6 something % for
deposits of less then 100 000 . It is like making a very bad trade

J.
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