Ownership of a deposit made to a prime broker or FCM

[EurexTrader]

Would you sign to these terms with a prime broker (PM) or FCM? They are meant for a "professional" client:

"The PM will treat transfer of your money as a transfer of full ownership of the money to the PM..."

"....the money will not constitute client money under the Client Money rules.... [because of that ] you do not have a proprietary claim over such money, and the PM can deal with it in its own right."

"money received by the PM will be recorded as a cash repayment obligation owed by the PM to you."

The wording doesn't look too good, but I suspect that such terms are the industry standard and there is no better choice if trading futures.

 

[rmorse]

I don't understand the language at all. What company is this and what is their role. Prime Broker, Hedge Fund, prop firm, FCM or just a trading group(Non-BD)?

 

[EurexTrader]

I should've mentioned it's an European entity, a prime broker named Ex Ante Limited.

I don't understand the language at all.

Perhaps put in US terms, a customer grants a lien to the deposit for the Prime Broker. It seems similar to these terms from Interactive Brokers Clearing Agreement:

"Introducing Broker grants Interactive a lien on all property held at any time by Interactive to secure
any Introducing Broker indebtedness or obligation to Interactive and Interactive, without notice to
Introducing Broker, may use, transfer or sell any or all of such property to enforce its lien."

I wonder if there are any futures brokers (or rather FCMs behind them) available who don't appropriate customer deposit as their money (through lien, title transfer etc.).

 

[rmorse]

The 1st agreement seems weird. The IB agreement sounds like it is just saying you are responsible for losses beyond the account. You can set up an account with an entity to protect your assets outside the entity. I would not sign the 1st one.

 

[loyek590]

The 1st agreement seems weird. The IB agreement sounds like it is just saying you are responsible for losses beyond the account. You can set up an account with an entity to protect your assets outside the entity. I would not sign the 1st one.

ah, I didn't think about that one. Usually it is to protect your trading account from somebody who sues you. I guess after eur/chf it is to protect your personal savings from your trading account.