Forex trading is a high-risk trade where you will exchange currencies and predict futures to a highly changing market. While you can understand and agree to the high risks with which you can both win and lose big, you will not want to further expose yourself to any unnecessary risks. We are all, naturally, concerned for the funds we are depositing and investing with any Forex broker and we want to assured of the safety at any time. We are thus looking at reliable brokers who offer traits which guarantee the trustworthiness, reliability and consistency.
What do segregated accounts mean?
The segregated accounts that many reliable Forex brokers offer are actually separate accounts for the clients and the company funds. This practically means that the broker controls but cannot use the traders’ money to further invest or cover any ongoing expenses. This means that the traders’ funds are well-protected and that all traders have a sort of a guarantee on them. However, this is not a 100% protection as in the case of bankruptcy the clients would receive refunds according to the regulations under which the broker operates.
Why should you look for a broker offering segregated accounts?
The main reason for choosing the brokers offering segregated accounts for trader funds is safety. This will ultimately protect the traders’ interest and the money they invested with the company, as the company will not have full access to the funds. In the past, there were many fraudulent Forex brokers who used the traders’ funds to invest or use them for operational costs they had. Such companies used the clients to redress the company account balance and use their funds as the margins. This puts the clients under constant risk, no matter how good their trading is and how successful they are. While there are reliable and trusted Forex brokers who still don’t offer segregated balances, this exposes the trader to further risks of potential misconduct and losses. On the other hand, having segregated accounts the company assures its clients their funds will be easily identified and returned in case of bankruptcy according to the rules of the appropriate regulatory body.
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Forex brokers with segregated accounts
IronFX is a Forex broker regulated by the CySEC (Cyprus Securities and Exchange Commission). The broker is widely recognized as one of the industry leaders and trusted for the transparency, consistency and overall reliability it offers. Being strictly regulated, one of its main traits besides liquidity, customer care and the actual offer, are indeed the segregated accounts. With IronFX, world-class quality is highly emphasized. There is a strict policy and the broker follows all the CySEC rules and regulations, with a guaranty that the customers’ accounts will have unique codes, being accessible and used for client funding only. This, together with many other factors, confirms that IronFX takes great care and devote to customer care.
FxPro is a high-quality Forex market provider, offering a wide range of features and services. FxPro is regulated by the FCA (Financial Conduct Authority), and their services are strictly regulated. They are well-known for offering genuine features, such Negative Balance Protection where they offer full control over any trade and prevent serious losses. FxPro Customer support is available in 18 languages 24 hours a day, five days in a week which is for us a big sign of trustworthiness. The trader funds are held in segregated accounts and there are short-term and annual reports by PWC, granting high standards and transparency to the broker’s business and dealing with clients’ funds. FxPro is devoted to excellence and since the company founding are well-known for the efforts to provide it to the clients.
Established in 2012, CM Trading is a South African Forex broker authorized and regulated by FSB (Financial Services Board). The company offers high class services to traders Worldwide and with many unique features it has the power to satisfy the different traders and enthusiasts. A noteworthy education center with great customer care and a demo account to train all attract new traders on a daily basis. CM Trading also offers safety and security to the clients, with segregated accounts in banks such as Nedbank and Barclays Bank and keeps the funds fully separated from the company’s balance. This ensures funds cannot be used for any other purposes, and together with a SSL encryption technology, grants full security and consistency in an effort to provide a well-rounded trading experience.
Segregated accounts for the trader and the company balances provide safety and further prove the reliability and transparency a Forex broker offers. While it is obvious this does not provide definite and 100% protection it surely provides the clients something to hold for if everything starts going wrong, as the refunds are done according to the regulations from the current capital. The traders will thus have guaranty that their funds are not used by the broker, and that they will not be used to cover any expenses or creditors if the company applies for bankruptcy. There are two types of segregated accounts – while most of the Forex brokers offering them will have one client funds account, some have gone a step further to provide completely separate accounts for big traders. This further provides transparency and ease of access for the customers, with banks giving reviews and actual proof the money is there.