Quote from crgarcia:
Your funds are in danger in ALL Forex brokers.
It they go bankrupt, you'll have to wait the legal bankruptcy process (about two years), to get a % of your money back. There's just NO way around it.
Don't believe the separate bank account/custodian/prime brokerage/insurance BS.
This has ABSOLUTELY NO legal validity, and your money WILL be pooled with the broker money to finance the liquidation claims.
The NFA has said it clearly:
The NFA recently issued an Interpretive Notice mandating that cash forex firms disclose that customerâs funds are not âprotectedâ.
From Section 1. Disclosure â The following statement should be âprominently displayedâ:
The NFA recently issued an Interpretive Notice mandating that cash forex firms disclose that customerâs funds are not âprotectedâ.
âThe transactions you are entering into with [Member] are not traded on an exchange. Therefore, under the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy. Since that same priority has not been given to funds used for off-exchange forex trading, if [Member] becomes insolvent and you have a claim for amounts deposited or profits earned on transactions with [Member], your claim may not receive a priority. Without a priority, you are a general creditor and your claim will be paid, along with the claims of other general creditors, from any monies still available after priority claims are paid. Even customer funds that [Member] keeps separate from its own operating funds may not be safe from the claims of other general and priority creditors.â
