I’d like to learn something simple. Which ways of keeping our money are available from regulated brokers and who is the safest way in favor to us (even if there is a fee)? More over, authorizations (e.g. in the UK,USA …etc ) different to my country and outside from EU, cover me against to brokers or not?
(Please accept my apologize due to my not-good English, in case there is something written wrong)
I live in Greece (EU CITIZEN)
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As you noted, the UK and the US are the two primary financial centers for trading forex. Since you live in Greece, many forex brokers will direct you to trade through their UK-regulated entities.
The UK regulator for forex is the Financial Conduct Authority (FCA). A key advantage of trading with an FCA-regulated broker is that your funds on deposit with them are protected for up to £50,000 by the Financial Services Compensation Scheme (FSCS).
Ok, Thanks a lot. One just last clarification. Does it apply to all consumers (British and Greeks)?
FSCS protection applies to clients of FCA-regulated brokers regardless of where the trader lives.
Thank you very much for your answers.Have a nice afternoon (GMT +2).
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I would like to add that it would be good if the broker has segregated accounts and is a member of Investor Compensation Fund. In that case if something happens with the broker, the clients’ funds should not be affected.
I agree about the segregation of funds but I am not sure that a broker may offer to a single client simultaneously ICF protection (20 000 EUR) and FSCS protection (50 000 GBP).
Segregated account means to me that our money don’t baffle with others money and that’s good.Just, I wonder if there is another kind of deposit more discrete and personalized ( I’m not ‘‘geek’’, only to ensure if there is and another possible choise, that it’ll give a priority to returns, in the case something will not going well). As for Investor Compensation Fund I didn’t know its existence and I’ll check about it. Thanks.
Rules regarding the segregation of client money vary from one jurisdiction to another, but you can read the requirements for FCA-regulated brokers here: CASS 7.13 Segregation of client money - FCA Handbook
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DESIGNATED CLIENT BANK ACCOUNT. I think this is the answer I was looking for. Do you know any broker accept that kind of business and if so, under which conditions they do. In my opinion, the right beginning,for someone who want to do business in trade whatever in finance, is fundamental and crucial.Then DISCLAIMERS & ARRANGEMENTS obtain meaning and all is more clear and fair.Thank you very much.
Such a setup is not common for retail trading accounts. Are you looking to deposit significantly more than the £50,000 covered by the Financial Services Compensation Scheme (FSCS)?
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No at the moment,. As I said , just to know my options.Thanks a lot.
If you are looking for such thing you should look more for a financial custodian and not for a broker. I don’t believe that there is a forex broker that opens an account in a bank in the name of each client, so that the client is secured if the brokers goes bankrupt.
In most of the cases broker offer segregated accounts, i.e. invulnerable to broker operation problems, in extreme case a bankruptcy, Segregated accounts should be administered by some independent organization (like Ninety Fast) etc.
Plus solid watchdogs offer compensation fund for investors, its a pool of aggregated funds from brokers which works like an insurance for clients.