Bank/ Broker Account Safety

[Highterm]

I'm interested to know what measures professional traders, hedge funds, large investors etc take to guard against the failure of their broker and bank.

Also, when they are not invested, where do they park their cash- in cash at bank, treasuries etc?

Many thanks

 

[crgarcia]

Quote from Highterm:

I'm interested to know what measures professional traders, hedge funds, large investors etc take to guard against the failure of their broker and bank.

Also, when they are not invested, where do they park their cash- in cash at bank, treasuries etc?

Many thanks

Very good question.
Few individual traders ask this and this is a key safety.

First you must ensure the firm is properly registered:
http://www.sec.gov/investor/brokers.htm
Make sure the name of your firm branch you are opening the account with appears EXACTLY as quoted in your account opening documents/contract.
Otherwise you may be dealing with an unregistered offshore branch.

Make sure your firm has SIPC coverage:
http://www.sipc.org/who/database.cfm

If you don't need margin, don't sign up for a margin account.

Don't sign for one-includes-all accounts if you don't need them (futures, Forex, etc.), specially forex.

 

[bpcnabe]

Quote from crgarcia:

Very good question.
Few individual traders ask this and this is a key safety.

First you must ensure the firm is properly registered:
http://www.sec.gov/investor/brokers.htm
Make sure the name of your firm branch you are opening the account with appears EXACTLY as quoted in your account opening documents/contract.
Otherwise you may be dealing with an unregistered offshore branch.

Make sure your firm has SIPC coverage:
http://www.sipc.org/who/database.cfm

If you don't need margin, don't sign up for a margin account.

Don't sign for one-includes-all accounts if you don't need them (futures, Forex, etc.), specially forex.

Idiot, he asked about LARGE traders, not individuals with their few thousand to invest. Also, there is only one firm that has an all-in-one for equities-futures-forex. All others are just white labels/ibs of their various platform brokers.