IB versus HotSpotFx

[Hoi]

Quote from jimrockford:

Customer funds at IB, denominated in any currency, are insured by SIPC and Lloyd's of London. We have all heard of SIPC. We have all heard of Lloyd's. The extent of this coverage is explained on IB's website.

Customer funds at the HotSpotFX retail broker are insured by something called a Fidelity 14 bond. I never heard of a Fidelity 14 bond. The extent of this coverage is not clearly disclosed on the HotSpotFX retail website. The website says that this coverage is for certain types of fraud by broker employees or by external hackers, but nothing indicates that this coverage protects customers from bankruptcy of the broker.

Well. Said !

Note: The MarketMakers at IB-FX-ECN are. UBS, BeanrSterns, JPmorganChase, and the best of all: The DeutscheBank.

 

[late apex]

Quote from jimrockford:

Customer funds at IB, denominated in any currency, are insured by SIPC and Lloyd's of London. We have all heard of SIPC. We have all heard of Lloyd's. The extent of this coverage is explained on IB's website.

Yes, it is explained clearly there, and, as always, devil's in the details:

http://www.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc

SIPC protection up to $500,000 per customer -- great, most reassuring to have that, especially in the post-Refco world.

However, Lloyd's coverage "topping off" that $500K to $30M per customer, is also subject to "an aggregate limit of $150 million." Since IB has many times that amount in customer assets, what is the value added, if any, of that Lloyd's coverage? In other words, how can it possibly "provide protection against failure of a broker-dealer" (to quote the above link), given that limit?

 

[late apex]

Quote from Hoi:
Note: The MarketMakers at IB-FX-ECN are. UBS, BeanrSterns, JPmorganChase, and the best of all: The DeutscheBank.

And Citibank.

 

[pipscooper]

Quote from jimrockford:

Customer funds at IB, denominated in any currency, are insured by SIPC and Lloyd's of London. We have all heard of SIPC. We have all heard of Lloyd's. The extent of this coverage is explained on IB's website.

Customer funds at the HotSpotFX retail broker are insured by something called a Fidelity 14 bond. I never heard of a Fidelity 14 bond. The extent of this coverage is not clearly disclosed on the HotSpotFX retail website. The website says that this coverage is for certain types of fraud by broker employees or by external hackers, but nothing indicates that this coverage protects customers from bankruptcy of the broker.

Jim Rockford,

My understanding is that fidelity bonds are required to be held by banks to cover instances of fraud, and the other things you cite, but doesn't include bankruptcy. As you know, US banks are backed by the FDIC in case of default, however hotspot isn't a bank.

 

[Hoi]

Quote from late apex:

And Citibank.

Hmmm...this one is listed, but I never saw CITIFX in the quotes....
Maybe it's the next one which will be added to the MarketMaker-pool for IB-FX.?

 

[late apex]

No, in fact, looking at my daily records (screen shots), I've done lots of trades with "CITI-FX" on IDEALPro as far back as July.

 

[Hoi]

Quote from late apex:

No, in fact, looking at my daily records (screen shots), I've done lots of trades with "CITI-FX" on IDEALPro as far back as July.

Still hoping that someone, especially from IB (or not), will reply to my question on Lloyd's coverage.

Still the case ???
(or did it stop in October).
(to my knowledge CITI-FX is used as Clearing, but not as MarketMaker).