Hi San99,
There seems to be a misunderstanding about the “Customers’ Assets in Seg” column in the CFTC’s financial data for brokers.
None of the money you see in this column for any broker is set aside for forex accounts. That’s why you will see a value of $0 in this column for most forex brokers. The fact is that forex accounts are not given segregated status by US law. That means for any broker with money in the “Customers’ Assets in Seg” column, these funds are set aside for futures and other non-forex accounts, and are therefore not available to forex account holders during bankruptcy proceedings.
[B]What does this mean for forex traders?[/B]
Since US law does not give segregated status to forex accounts, holders of these accounts don’t have secured creditor status in bankruptcy proceedings.
Traders living outside the US, may opt to trade with a broker regulated in the UK where forex accounts do have segregated status and funds are protected for up to £50,000 by the Financial Services Compensation Scheme. Another option is to trade with a broker regulated in Canada where forex accounts also have segregated status and funds are protected for up to $1 million by the Canadian Investor Protection Fund.
However, for traders in the US, the choice is not so straightforward. US law only allows CFTC-regulated brokers to offer forex trading services to US residents. That means US traders can’t take advantage of the fund segregation and protection available from brokers regulated in the UK and Canada. It makes it all the more important for traders in the US to choose brokers with strong financials.
All traders need to ask their brokers the following questions regarding their financial stability.
[B][ol]
[li]What are your revenues?
[/li][li]How profitable is your firm?
[/li][li]Do you have a top-tier third party accounting firm auditing your financials?
[/li][/ol][/B]
Welcome to BabyPips! 