fxcommentary
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I ENVY every fx trader who pick a broker without first checking the safety of deposit. I waste a lot of time checking, i wish i had more trust.
The safety of deposit is - my ultimate definition - a compensation scheme in case of broker (or deposit-taker) inslovency, provided by laws in the jurisdiction of the broker (or deposit-taker).
Pls do not regard this as any kind of legal advice or marketing material. Simply take care of yourself.
The procedure I use:
1. Checking what kind of compensation scheme exist in jurisdiction (eg. EdB Germany, FSCS UK) - i will not use USA broker as i do not find one with compensation scheme.
- Pls here if you know any USA broker with such defined safety deposit rules. This do not have to be a compensation scheme in european meaning but any kind of additional safety legal instrument
2. Checking exclusion from the rules of compensation scheme (e.g. am i eligible according o these rules as a citizen of a different country)
3. Checking where is my money deposited, in what bank (i mean: legal obligation of broker and not: a marketing information) - broker may transfer money to deposit-taker which may lead (and probably will) to exclusion of national compensation scheme.
- I will post my communication just started with FCA in UK, and will update here if my concerns as to UK brokers are true
4. Checking if my money is still my money - there is a broker (legally: it is not a broker but everybody recognize his services as a FX brokerage) who takes ownership of clients money. Yes - ownership is transffered.
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Now pls do not comment that:
- this is a boring subject
- that i am marketing representative of a broker
- that i am dramatic
- that fx strategy is more important that safety of deposit
--
Pls comment - where can you a reliable jurisdiction, which uses clear / fair rules for safety and deposit + the brokerage name based in that jurisdiction who does not overide these rules in customer agreement.
--
In any case - if anybody suggest broker her. PLEASE DO NOT TRUST IT. All you can do is check it yourself.
The safety of deposit is - my ultimate definition - a compensation scheme in case of broker (or deposit-taker) inslovency, provided by laws in the jurisdiction of the broker (or deposit-taker).
Pls do not regard this as any kind of legal advice or marketing material. Simply take care of yourself.
The procedure I use:
1. Checking what kind of compensation scheme exist in jurisdiction (eg. EdB Germany, FSCS UK) - i will not use USA broker as i do not find one with compensation scheme.
- Pls here if you know any USA broker with such defined safety deposit rules. This do not have to be a compensation scheme in european meaning but any kind of additional safety legal instrument
2. Checking exclusion from the rules of compensation scheme (e.g. am i eligible according o these rules as a citizen of a different country)
3. Checking where is my money deposited, in what bank (i mean: legal obligation of broker and not: a marketing information) - broker may transfer money to deposit-taker which may lead (and probably will) to exclusion of national compensation scheme.
- I will post my communication just started with FCA in UK, and will update here if my concerns as to UK brokers are true
4. Checking if my money is still my money - there is a broker (legally: it is not a broker but everybody recognize his services as a FX brokerage) who takes ownership of clients money. Yes - ownership is transffered.
--
Now pls do not comment that:
- this is a boring subject
- that i am marketing representative of a broker
- that i am dramatic
- that fx strategy is more important that safety of deposit
--
Pls comment - where can you a reliable jurisdiction, which uses clear / fair rules for safety and deposit + the brokerage name based in that jurisdiction who does not overide these rules in customer agreement.
--
In any case - if anybody suggest broker her. PLEASE DO NOT TRUST IT. All you can do is check it yourself.