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Are your funds protected with retail fx brokers?

  • #41
  • Nov 12, 2015 10:43am Nov 12, 2015 10:43am
Quoting Makavell
{quote} If retail brokers dont play in the real market, why did Alpari and FXCM declare for bankruptcy as a result of the SNB event???
When did FXCM declare for bankruptcy?
  • #42
  • Nov 13, 2015 3:09pm Nov 13, 2015 3:09pm
Quoting Makavell
{quote} If retail brokers dont play in the real market, why did Alpari and FXCM declare for bankruptcy as a result of the SNB event???
Quoting zznbrm
{quote} When did FXCM declare for bankruptcy?
FXCM has never declared bankruptcy, and we are in compliance with all regulatory capital requirements in the jurisdictions in which we operate. It's important to note that despite the events of January 15th, our capitalization remains at levels similar to before the SNB event: http://bit.ly/10Pq5FJ
  • #43
  • Nov 13, 2015 6:00pm Nov 13, 2015 6:00pm
Quoting Jason Rogers
{quote} {quote} FXCM has never declared bankruptcy, and we are in compliance with all regulatory capital requirements in the jurisdictions in which we operate. It's important to note that despite the events of January 15th, our capitalization remains at levels similar to before the SNB event: http://bit.ly/10Pq5FJ
You were about to declare bankruptcy, if it weren't for Leucadia's 300$ Million bailout loan...Obviously, your capitalization is at lower levels than the pre-SNB event levels and I think your company is busy now trying to repay Leucadia's debt...Taking into consideration the reputation risk/damage that your company incurred after the SNB event, and consumers' loss of confidence in your brand name, FXCM would never be able to enjoy pre-SNB levels as retail traders realized how shaky FXCM is.
Simplicity is the key to brilliance.
  • #44
  • Nov 13, 2015 10:32pm Nov 13, 2015 10:32pm
Quoting Jason Rogers
{quote} {quote} FXCM has never declared bankruptcy, and we are in compliance with all regulatory capital requirements in the jurisdictions in which we operate. It's important to note that despite the events of January 15th, our capitalization remains at levels similar to before the SNB event: http://bit.ly/10Pq5FJ
Apologies there Jason. FXCM almost declared bankruptcy as a result of the SNB event.
  • #45
  • Nov 13, 2015 11:33pm Nov 13, 2015 11:33pm
OP is clearly wrong.
I opened several accounts with UK forex brokers like LMAX and Ikon Finance.
these companies are registered and regulated by the FCA and must have all their clients money in segregated accounts.
they are financial services companies and in case of a default, every client is insured for up to 50,000 pounds in deposits by a government guarantee.
guarantees for clients deposits are also in Europe, Canada and I think Switzerland.

I also have an account with Interactive Brokers and it is true that only funds of stock traders are insured in the US.
BUT: IB have an option for clients funds to be swept into a stock trading account every day for traders of other instruments like futures, forex, bonds etc. even if they never traded stocks in their life.

so I don't know where OP got it from to say that clients funds are never insured.
  • #46
  • Nov 13, 2015 11:52pm Nov 13, 2015 11:52pm
Maybe is out of topic .But I have to say this :

On friday I had 2 open BUY positions with USDJPY .Broker changed one of them into SELL just on news release with 0.0 value .I believe if I would not close it ,probably they can load any lot later in case put me in margin call.How is this possible they can manipulate .I use MT4
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  • #47
  • Nov 14, 2015 6:27am Nov 14, 2015 6:27am
Quoting Makavell
Apologies there Jason. FXCM almost declared bankruptcy as a result of the SNB event.
Quoting Inceptionist
You were about to declare bankruptcy, if it weren't for Leucadia's 300$ Million bailout loan
Lots of things in business "almost" or are "about" to happen. I'm sure Apple, Microsoft, Google "almost" did lots of things during their rise to the top. Challenging times...that is when management makes their salaries...figuring out how to deal with those challenges. Seems like FXCM management has done a good job at that.

Anyway...some brokers offer custodial accounts...seems like a very good way to protect funds.
  • #48
  • Nov 14, 2015 7:50am Nov 14, 2015 7:50am
I like FXCM. Never one issue concerning withdrawals. I hope they dont go away (refco). If FXCM goes, so goes USA forex trading. Thanks Frank n Dodd and jobama (assholes)!
FF = Forex Faggots
  • #49
  • Nov 14, 2015 7:58am Nov 14, 2015 7:58am
Regulation can provide protection to retail clients but it depends how its done. For example segregated account might not be as secure as one thinks. Best example for that is MF Global that went bankrupt a few years ago.

Clients from MF Global Canada got 100 cents on the dollar back from the broker after it went bust, mostly because every registered dealers in the country must contribute to an investor protection fund that insures every retail traders (including fx traders) to up to $1,000,000. So basically if you're a broker and want to do business in Canada you need to put money upfront in order to insure the safety of clients deposit. Meanwhile south of the border a lot of client from MF Global lost a lot of their money even if the CFTC demanded of dealers to segregate the trading accounts of the client from the firm, at least for futures trading account. Turns out MF Global "misplaced" $1.2G of money that was supposedly segregated. To my knowledge nobody went to jail for it... BTW the US also has a protection funds for investors that insures between 250k and 500k but just not for FX and Futures account

Since inception in 1969 the canadian protection fund faced 17 insolvencies and never failed to reimburse eligible clients up to $1MM. So in short, yes, regulations can protect clients money.
It's not about what you make, it is about what you don't lose
  • #50
  • Nov 14, 2015 11:39am Nov 14, 2015 11:39am
Quoting aceventura69
Meanwhile south of the border a lot of client from MF Global lost a lot of their money even if the CFTC demanded of dealers to segregate the trading accounts of the client from the firm, at least for futures trading account. Turns out MF Global "misplaced" $1.2G of money that was supposedly segregated. To my knowledge nobody went to jail for it... BTW the US also has a protection funds for investors that insures between 250k and 500k but just not for FX and Futures account Since inception in 1969 the canadian protection...
All MF Global clients(including US clients) received 100% of their money back. I received my last check in mid 2014 about 2 1/2 years after they filed for bankruptcy.
The only way they had enough funds is because of the large fines paid by JP Morgan & the CME. Those funds filled the "gap" of missing funds.

PFG clients will never receive all the funds because there's not enough from fines & asset sales to fill the "gap". Currently looking @ 60-65%.

Even after these events, there's still no guarantee of getting your money back if a similar situation happened today. They've changed some of the regulation processes but without insurance, no amount of regulation will make it 100% safe. Just like the best security software in the world will be hacked at some point.
  • #51
  • Edited 12:53pm Nov 14, 2015 12:34pm | Edited 12:53pm
Quoting srt
{quote} All MF Global clients(including US clients) received 100% of their money back. I received my last check in mid 2014 about 2 1/2 years after they filed for bankruptcy. The only way they had enough funds is because of the large fines paid by JP Morgan & the CME. Those funds filled the "gap" of missing funds. PFG clients will never receive all the funds because there's not enough from fines & asset sales to fill the "gap". Currently looking @ 60-65%. Even after these events, there's still no guarantee of getting your money back if a similar...

was not aware that MF global clients got all their money back, last I heard Corzine was saying he did not know where the money went LOL. thank you for pointing that out.

However my point still stand, coherent regulation is better than crappy regulation. MF Global Canada had to chip in the investor protection fund, like all the other brokers dealing in Canada under the IIROC regulation, paying insurance to protect clients money is the cost of doing business in Canada. That allowed clients not to have to wait 2 1/2 years to see the color of their money. Also The fund is less likely to run out of money then if it were funded by fines as the cash inflows are predetermined and can be modified if need may be. I agree that nothing is 100% when it comes to regulation/insurance, risk is part of life, if a bunch of brokers go bust at the exact same time then the fund might be in trouble, but like I said, as per the CIFP claim, if you were dealing with IIROC regulated dealer that went under, you got your money back.

To reply directly to the OP, 17 brokers went bust in Canada and EVERYTIME client saw their money back, regardless of the type of securities traded, so his claim is clearly false....

PS: I am not saying Canadian regulation is perfect, far from it, just wanted to point out that the way the CIPF (Canadian Investor Protection Fund) is set up makes sense and seems to work so far.
It's not about what you make, it is about what you don't lose
  • #52
  • Nov 14, 2015 3:36pm Nov 14, 2015 3:36pm
Quoting aceventura69
{quote} was not aware that MF global clients got all their money back, last I heard Corzine was saying he did not know where the money went LOL. thank you for pointing that out. However my point still stand, coherent regulation is better than crappy regulation. MF Global Canada had to chip in the investor protection fund, like all the other brokers dealing in Canada under the IIROC regulation, paying insurance to protect clients money is the cost of doing business in Canada. That allowed clients not to have to wait 2 1/2 years to see the color of...
Sounds like you have a much better system of protection than we do. You would laugh to hear how easy it was for the PFG fraudsters to get away with that "theft" despite being fully regulated by NFA & CFTC. Now I regularly run the margin-to-equity in my futures account to 75% so I can keep most of my funds in an FDIC insured bank.
  • #53
  • Nov 14, 2015 4:46pm Nov 14, 2015 4:46pm
Quoting srt
{quote} You would laugh to hear how easy it was for the PFG fraudsters to get away with that "theft" despite being fully regulated by NFA & CFTC. .
For that I think it is the same wherever you go in the western world. I never understood how or why regulators can fine those companies for many millions of dollars but somehow no one goes to prison, somehow no one is criminally responsible, insane. The equity holders pay the note while the incompetent/fraudulent execs walk out unscathed...
It's not about what you make, it is about what you don't lose
  • #54
  • Nov 15, 2015 4:28pm Nov 15, 2015 4:28pm
Who cares about fxcm , fca regulated are "usually" fair with their clients, while non regulated are usually undercapitalized and they can do whatever they want with your funds.
  • #55
  • Nov 16, 2015 5:25pm Nov 16, 2015 5:25pm
Quoting Inceptionist
Obviously, your capitalization is at lower levels than the pre-SNB event levels and I think your company is busy now trying to repay Leucadia's debt...
Hi Inceptionist,

Since we are one of the only retail forex brokers in the world that is a publicly-traded company (NYSE ticker: FXCM) the details of our finances including our loan from Leucadia are well known. By contrast, most other forex brokers are privately-held companies, so it's hard to know how much debt they have on their books or the state of their finances.

FXCM is repaying the Leucadia debt with proceeds from the sale of non-core assets.
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As you can see above, we sold our FXCM Japan for $62.2 million. At that time, our CEO Drew Niv said the following:

"FXCM is pleased with how our debt reduction plan is proceeding. We are ahead of plan and the results of the FXCM Japan sale exceeded our expectations. With all the increased attention to our other properties, we are expecting robust and competitive auctions for the other non-core assets we have targeted to sell."



As a further update last month, we announced the completion of our sale of FXCM Hong Kong to Rakuten Securities for a total consideration of approximately $38 million. $203 million remains outstanding as of our latest SEC filing on October 8, 2015, which we expect to repay by the end of Q1 2016.

Furthermore, as you can confirm from the latest publicly-available data, our capitalization does indeed remain at levels similar to before the SNB event: http://bit.ly/10Pq5FJ

Quoting Inceptionist
Taking into consideration the reputation risk/damage that your company incurred after the SNB event, and consumers' loss of confidence in your brand name, FXCM would never be able to enjoy pre-SNB levels as retail traders realized how shaky FXCM is.
The latest financial data regarding the capitalization of our US entity as compared to other US-regulated brokers prove otherwise:
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The column that says "Total Amount of Retail Forex Obligation" shows the amount of money retail traders have on deposit with FXCM US which is over 50% greater than what is on deposit with the number 2 and number 3 retail forex brokers in the US.

In another strong vote of confidence, Citibank chose FXCM for its customers when they decided to exit the business in June.
  • #56
  • Nov 16, 2015 5:53pm Nov 16, 2015 5:53pm
In another strong vote of confidence, Citibank chose FXCM for its customers when they decided to exit the business in June.[/quote]


Citibank "chose" FXCM because they gave the highest bid. They're in the business of making money for their shareholders.

When MF global went bankrupt, the regulators "chose" to transfer my account to Vision Financial. So should we assume this was because the regulators had a high level of confidence in Vision? Where is Vision now? They were "quietly" forced out of the business because of all the "crap" they were doing.

The true sign of "confidence" in a company is the stock market.
FXCM has a market valuation of $46 million.
Gain Capital has a market valuation of $384 million.

Just stating my opinion.
I'll consider re-funding my account in a year if you're still around. The spreads were pretty good.
  • #57
  • Nov 16, 2015 10:37pm Nov 16, 2015 10:37pm
Quoting srt
In another strong vote of confidence, Citibank chose FXCM for its customers when they decided to exit the business in June.
Citibank "chose" FXCM because they gave the highest bid. They're in the business of making money for their shareholders. When MF global went bankrupt, the regulators "chose" to transfer my account to Vision Financial. So should we assume this was because the regulators had a high level of confidence in Vision? Where is Vision now? They were "quietly" forced out of the business because of all the "crap" they were doing. The true sign of "confidence" in a company is the stock market. FXCM has a market valuation of $46 million. Gain Capital has a market valuation of $384 million. Just stating my opinion. I'll consider re-funding my account in a year if you're still around. The spreads were pretty good. [/quote]

Are you a staff of FXCM??? Noticed you always jump to their defense in all threads. Just curious
  • #58
  • Nov 17, 2015 4:20am Nov 17, 2015 4:20am
Are you a staff of FXCM??? Noticed you always jump to their defense in all threads. Just curious[/quote]

You must be reading my points incorrectly or I'm not very clear in my points.
I'm disagreeing with some of their points. I've never come to their defense. I've withdrawn all funds until they get their financial situation in order. Which points make it look like I'm defending them?


***BTW, the first comment in my post above was a quote from Jason and not my quote.

***This FF "quote" isn't working correctly which is causing confusion. Now it makes it look like my comments were your quotes.
  • #59
  • Nov 17, 2015 7:39am Nov 17, 2015 7:39am
Quoting srt
This FF "quote" isn't working correctly which is causing confusion. Now it makes it look like my comments were your quotes.
User error
  • #60
  • Nov 17, 2015 2:02pm Nov 17, 2015 2:02pm
Quoting srt
The true sign of "confidence" in a company is the stock market.
The stock price is a reflection of shareholder value as a result of the Leucadia loan which we expect to repay in Q1 of 2016. While I can't personally comment on it beyond citing info that's already publicly available, below is an excerpt from a LeapRate article that @shrike pointed out recently:

"most of the overall writeoff/loss is non cash and non operational, and has nothing to do with FXCMs operations and corporate health, but rather with accounting charges FXCM needs to take due to US GAAP accounting rules thanks to the future benefit that FXCM gave up to Leucadia."

Quoting shrike
Here is a nice article about FXCM stock price: http://leaprate.com/2015/08/misunder...and-valuation/ Its not very attractive to hold fxcm stock due to the loan-agreement with Leucadia. The core retail business is doing alright tho.
The terms of the Leucadia loan impact FXCM shareholders, not FXCM account holders. I'm not authorized to comment on our stock, but you're welcome to contact our Investor Relations department with any related questions: http://bit.ly/1SEYg7W

Quoting srt
I'll consider re-funding my account in a year if you're still around. The spreads were pretty good.
In that case, I look forward to welcoming you back when the time comes, and I'm glad you like our spreads.
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