Protect Your Funds

Before any trader considers making money in the forex markets, they need to consider the safety of their funds. It is very important for clients to know that their funds are not secured as they would be in a bank. In fact, with forex accounts in the United States clients are not even treated as a secured creditor. This means that if a firm that you are trading with goes out of business, you may lose everything. We have seen this happen with large forex firms like Refco and smaller firms like CFGTrader, and this could very well happen again. We want to make sure you do everything you can to protect your hard earned money

So how do you become a Secured Creditor?

A common way that a client becomes a secured creditor in the forex market is through the use of a UK based trading account (Post October 18, 2010, regulations, this is only available to non-US domiciled individuals). Many of the larger Futures Commission Merchants (FCMs) like FX Solutions, Gain, and FXCM have established separate entities offshore, mostly in the UK. The reason for doing this is the way accounts are handles in the UK under the regulation of the Financial Services Authority (FSA). In the United States the regulatory body is the National Futures Association (NFA) which does not require forex accounts to be segregated. However, in the UK under FSA regulations, accounts are segregated.

A segregated account is one that in the event of a bankruptcy qualifies you as a secured creditor.  Some of you may be familiar with this in the Futures or Stock Markets as accounts are treated this way. The FSA (UK Regulatory Body) requires for member firms to segregate all client accounts. Thus, all individuals (again only for non-US domiciled individuals) who trade through a FSA regulated FCM, will obtain a segregated account. Forex Broker Selection has many relationships with firms with UK entities, and we will be glad to speak with you on the safety of your funds and establish a segregated account at the broker of your choice. Please click on the firm logos below to read more about a segregated account at these firms.