UK compensation fund

T

tmclimon

Guest
Hello,

I have been reading things on another forum about FSCS. From what I understand, it's an official UK fund able to compensate if your broker dies down.

But this is not clear to me who will benefit from FSCS and how. Someone here could help ?

If a big name like Lehman can disappear so fast, I can't see why brokers would be immune to the crisis.

Thx,
Karen
 
Quote from tmclimon:

Hello,

I have been reading things on another forum about FSCS. From what I understand, it's an official UK fund able to compensate if your broker dies down.

But this is not clear to me who will benefit from FSCS and how. Someone here could help ?

If a big name like Lehman can disappear so fast, I can't see why brokers would be immune to the crisis.

Thx,
Karen
More...

As far as I know they operate as a backup for claims against FSA-regulated firms that go bust, they will compensate clients up to 50k if the busted firm doesn't have enough assets to cover claims.

More info here

You're right, no-one is immune from going broke, so it's reassuring to know that if the worst happens then clients of FSA regulated brokers/marketmakers funds are covered up to GBP50k.
 
Thx for the answer. I am OK to lose my money if I make mistake, not if some others do so this FSCS thing looks good (I am on Alpari UK, which is FSA regulated, so I should get this protection).

Do you know someone who asked for help to this fund ?
 
Quote from tmclimon:

Thx for the answer. I am OK to lose my money if I make mistake, not if some others do so this FSCS thing looks good (I am on Alpari UK, which is FSA regulated, so I should get this protection).

Do you know someone who asked for help to this fund ?
More...

It looks like the first USD5k are covered under a scheme that Alpari operate, and anything above that would probably be covered under the FSA and FSCS scheme.

I know people who investigated the cover offered by the FSA when there was the Northern Rock fiasco and they were covered up to 30k at the time and I think it was 90% of 30k to 100k (but those figures have been increased now as far as I know)

It might be worth checking with Alpari just to be safe.
 
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