What happens with my money/futures if a futures broker or FCM goes bankrupt?

C

crgarcia

The SIPC doesn't cover options or futures, only stocks and bonds.

It is supposed that FCMs -Futures Commissions Merchant- keep their customers' assets in separate accounts; so the bankruptcy Trustee (Chapter 7) returns the funds/futures to the customers quickly.

What one must verify to make sure youl'll get your money back?
Is enough only to check that the CFM is registered with the CTFC and NFA?
 
Quote from CONR:

I would suggest you read this and make your own decision because nobody seems to know. By the way, options are covered.

http://blogs.marketwatch.com/greenberg/2008/03/how-to-keep-your-investments-safe/
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Nice article, altough too fatalistic.

Having non-margin accounts, or in-your-name securities, is out of question for us, active traders.

While it is true that with margin accounts you become a creditor of the broker, but you are a PRIORITY creditor, who gets its funds before the other general creditors.
 
According to CFTC regs, FCM's must segregate custmer accounts plus the capitalization requirements are much higher than for stock brokers. Basically, this makes FCM's self-insured. The problem comes when fraud and theft is involved. BTW, what ever happened to REFCO accounts? How long did it take customers to get their money back? How long, before ManFinancial, did it take for custoemrs to begin trading? REFCO is porbably a worst case scenario.
 
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