Brokers with Segregated Accounts
Protect your funds when good times go bad. Compare Forex brokers with segregated accounts.
Segregated accounts earmark the funds you deposit with your broker for your own trades. They're meant to avoid "co-mingling" and can protect your funds from unscrupulous brokers.
Why segregation matters
The primary purpose of segregation is to protect customer funds in the event of the broker's insolvency. In countries where account segregation is a legal obligation, provisions in bankruptcy laws give customers a priority over the funds in segregation. This protects customer funds against insolvency losses and competing claims from other creditors.
Segregation also serves a more immediate function. In the event of liquidation or any other situation where open positions need to be transferred quickly, segregation ensures that the customers' margin funds transfer along with the positions. Without this protection, you may be required to post duplicative margin or else face the forced liquidation of your positions.
A legal requirement
In some countries, it is a legal requirement that brokers place customer funds in segregated accounts. In others, brokers may follow similar requirements out of good business practice.
Brokers operating in the United Kingdom are regulated by the Financial Conduct Authority (FCA, formerly FSA). Under FCA rules, brokers have an obligation to protect their clients' money and assets. FCA regulated brokers must place all money paid and owed to customers into separate bank accounts and establish a trust over those accounts.
Brokers operating in the United States must register with the National Futures Association (NFA) or the Commodity Futures Trading Commission (CFTC). Section 4d(a)(2) of the Commodity Exchange Act requires that all funds deposited with a Futures Commission Merchant (FCM) in connection with futures or commodity options be accounted for separately, deposited under an account name that clearly identifies them as such, and not be commingled with the FCM's own funds.
How safe are segregated accounts?
MF Global's collapse, which left US$ 1.6 billion of client funds unaccounted for, is a reminder that segregated accounts cannot protect against fraud or criminal behaviour. According to a report by the bankruptcy trustee, MF Global often moved money between its own accounts and those of customers in amounts of less than US$ 50 million a day, replacing the cash by day's end.
When opening an account with a Forex broker, take time to read through the Customer Agreement and Terms and Conditions to understand the steps the broker will take to protect your funds. Segregated accounts aren't a silver bullet; however, they provide you with legal rights when good times turn bad.
Trade 70+ currency pairs, spot indices, energies, metals and shares on fixed spreads with instant ... MoreTrade 70+ currency pairs, spot indices, energies, metals and shares on fixed spreads with instant execution. Spreads are fixed over certain time periods, but vary throughout the day. All EAs are allowed.
Risk warning ?
Trade Forex as well as CFDs on cryptocurrencies, shares, indices, metals and more on floating ... MoreTrade Forex as well as CFDs on cryptocurrencies, shares, indices, metals and more on floating spreads from 1 pip and without commission on MetaTrader 5. This account, designed for experienced traders, allows you to trade up to 60 lots per position.
Risk warning ?
Trade 55 currency pairs on fixed spreads, plus CFDs on crypto-currencies, stocks, indices, bonds and... MoreTrade 55 currency pairs on fixed spreads, plus CFDs on crypto-currencies, stocks, indices, bonds and commodities. AvaTrade accepts all MetaTrader 4 EAs except those with a focus on arbitrage.
Risk warning ?