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BREXIT: What happens now to EU residents trading via FCA brokers?

  • #21
  • Jun 28, 2016 1:20am Jun 28, 2016 1:20am
Quoting shrike
{quote} The FCA doesn't do compensations, its the FSCS. And yes, even non-EU residents will get compensation. By the way, this is in contrast to for example Australia, where only residents are eglible. And also certain other EU compensation funds are useless (i know the one in Austria is for sure).
Good to know, thanks Shrike!
  • #22
  • Jun 29, 2016 6:36am Jun 29, 2016 6:36am
Quoting actalis
One important question remains whether or not the FCA compensation scheme will still work for EU residents. Say for instance if Alpari had defaulted after the Brexit would its retail clients still be covered for their funds by the FCA?
I think compensation is available only for UK citizens. I mean UK traders are protected by law in case the broker goes bust. For EU and traders other countries it will be much harder to avail claim for compensation (on legal level)
  • #23
  • Jun 29, 2016 7:07am Jun 29, 2016 7:07am
I tink this is someting they have to negotate with eu.
  • #24
  • Jun 29, 2016 7:39am Jun 29, 2016 7:39am
Quoting leebsurag
{quote} I think compensation is available only for UK citizens. I mean UK traders are protected by law in case the broker goes bust. For EU and traders other countries it will be much harder to avail claim for compensation (on legal level)
No - by EU law an union citizen may not be treated worse than a domestic citizen. But regardless, FSCS even pays out to non-EU residents. It has done so many times, for example at the Worldspreads bankruptcy.
  • #25
  • Jul 5, 2016 6:29am Jul 5, 2016 6:29am
Quoting shrike
{quote} No - by EU law an union citizen may not be treated worse than a domestic citizen. But regardless, FSCS even pays out to non-EU residents. It has done so many times, for example at the Worldspreads bankruptcy.
I think it is more about segregated account requirement rather than compensation funds of the regulator or supervisory commission. If a company files bankruptcy and not stealing money and goes bust then client funds should stay untouched..
  • #26
  • Jul 22, 2016 12:49am Jul 22, 2016 12:49am
it might not affect actually EU traders trading with an FCA regulated broker, if does it wont happen right away maybe gradually, there are SOPs for such things i guess. lets watch and see, but the higher probability is maybe nothing would actually change in terms of EU traders trading an FCA broker
  • #27
  • Jul 22, 2016 5:29am Jul 22, 2016 5:29am
I guess the effect may goes to some disguised brokers sitting in EUROPE with FCA regulations but are running a lottery show. However i guess its good for traders that such brokers will have to leave their FCA regulation.
  • #28
  • Oct 2, 2016 6:57am Oct 2, 2016 6:57am
There appears to be a perception that UK regulation of brokers and the Fx business is the gold standard.
Its NOT. The UK regulatory system is actually very lose, compared with BaFIN in Germany for example.
All part of the Euro myopia that afflicts the UK. Everything thats not British is "European" /EU regulated .
NOT. Each individual European country has its own regulatory authority.Just like London.

The level of benign sellside regulation is a key factor in location of Brokerage business.
The least/most sellside-favourable jurisdictions are where most business is located.
Thats why Germany is not a favourite location for Fx brokers, and why London and Cyprus is.
  • #29
  • Oct 2, 2016 9:36am Oct 2, 2016 9:36am
Anyways. I dont think its clear what will happen at all. EU citizens can open accounts in the USA with no problem, and these firms dont have a MIFID passport either. I dont see a compelling reason why it should be different with UK.
  • #30
  • Oct 3, 2016 4:39am Oct 3, 2016 4:39am
Quoting cliffedwards
There appears to be a perception that UK regulation of brokers and the Fx business is the gold standard. Its NOT. The UK regulatory system is actually very lose, compared with BaFIN in Germany for example. All part of the Euro myopia that afflicts the UK. Everything thats not British is "European" /EU regulated . NOT. Each individual European country has its own regulatory authority.Just like London. The level of benign sellside regulation is a key factor in location of Brokerage business. The least/most sellside-favourable jurisdictions are where...

Remember FxDirekt-Bank?

http://www.wiwo.de/finanzen/geldanla...k/7219416.html
  • #31
  • Last Post: Oct 3, 2016 6:44am Oct 3, 2016 6:44am
Quoting shrike
{quote} Remember FxDirekt-Bank? http://www.wiwo.de/finanzen/geldanla...k/7219416.html
I do.
The company was ordered to liquidate customer accounts and return assets on December 2012 by BaFin.

Allegedly FXdirekt been scamming clients. This included aggressive marketing and claims of large profits but also several other methods. One of them alledgedly involved the use of delayed feed for its demo platform where sales people who were watching the real prices would be on the phone with prospective clients and walk them through winning trades knowing in advance where the market was headed. There were other allegations regarding solvency, on which I have no additional confirmation.
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