Eternity Law International — News — Segregated Forex Brokerage Account

Segregated Forex Brokerage Account

Published:
December 8, 2020

“Segregated account” concept means separation of client savings and operating funds of the Forex broker. This scheme helps to ensure complete security of trading operations carried out within the foreign exchange market. The segregated account is guarantee that any fees associated with trading transactions, in particular, commissions, will be charged fairly, and this is a “stop-tap” for broker in overusing of their own professional powers.

Forex sphere widely involves this solution, because if it is available, consumer can be sure that his/her account is not used for the goals of a broker. In addition, purpose of establishing a segregated account is also to encourage the consumer to invest, since he/she will always know where his funds are and how they are employed.

Benefits of having a segregated account

Let’s pay attention to advantages of segregated account.

  1. Using the segregated accounts, companies can automate outgoing and incoming bank transactions.
  2. Such accounts prevent data confusion, thereby creating a high level of safety. Thus, client can be sure that in extreme conditions, for example, in case of company bankruptcy, his/her funds will remain intact.
  3. Client is able to control his/her funds at any time – 24/7.
  4. Absence of unnecessary and dangerous risks for the business project.
  5. Improving the level of transparency of operations.

Reliable Forex brokers offer segregated accounts to their consumers. This way, clients can be assured that they can directly contact those offering investment solutions. This, in turn, makes it possible to control risks of liquidity of savings fully.

Usage of segregated account

Since segregated accounts are an important part of the business, authorities, supervising providers of forex services, in each jurisdiction monitor their use. In Britain, the FCA has established certain organizational requirements, principle of segregation and rules for reconciliation and usage of segregated account.

Regarding the segregation and functioning of customer cash accounts CASS 5.5 FCA provides the following:

  • “One of the goals of CASS 5.5 is to provide assurances that, unless otherwise specified, customer money is kept separate from company funds. In case of bankruptcy of the company, the separation of funds will become the basis for the effective functioning of the mechanisms for protecting clients’ money. The goal is to draw a clear line between the client’s money and the funds that may be encroached on by creditors in the event of bankruptcy.”

CySEC also oversees the firms under its jurisdiction. Section 18 (2) (j) of the CySEC Act clarifies the following: “CIF is committed to taking all necessary steps to protect customer funds held by the entrepreneur. It is not allowed to use consumer funds for the purposes of the organization.”

Summary

Generally, Forex is considered as a high-risk business, as these activities are very unpredictable. The utilization of segregated account by dealers significantly increases the degree of certainty and reliance. The segregated accounts empowers brokers to secure customers’ funds.

In this way, the firm controls the assets, yet can’t utilize them to cover the organization’s costs or to invest. What is additionally significant, is that the customer’s funds are saved if the broker is bankrupted.

Eternity Law International will provide you with expert advice on opening a segregated account in a suitable jurisdiction. If you have any questions or need advice on opening a segregated account or obtaining forex broker license, call us at the phones indicated on the site, or write to CRM form, our specialists will answer you online.

You could be interested

Legal translations

Legal translations – accuracy, convenience and guarantees. WHAT TO ORDER In order to leave a request, you do not need to search for the address in the navigator and lose time on the way to the office. You can contact us online using instant messengers, on the pages of social networks or order a call...

Company registration in Ukraine

Registration of a company in Ukraine is getting easier every year. Company formation procedure The first stage in setting up a company in Ukrainian jurisdiction is entering it into the Unified State Register. This can be done by submitting an application to the state registrar working in the zone where the legal entity will operate...

Company registration in Italy

Italy is a European country that has always been and remains attractive to entrepreneurs. This state is not a standard offshore, however, it offers no less favorable business conditions. Having a representative office in Italy is a sign of the company’s reliability and that it is respected in certain circles. The most popular company forms...

Opening a US Bank Account

Persons with other citizenship possess rights to open bank account in USA, but not all establishments spread their services to other residents. Plenty of establishments claim social securities, which non-residential persons don’t possess. Nevertheless, large banking corporations permit other persons to cooperate with them subject to determined rules. Documentation needed for bank account in USA...

Regulation of Crypto Businesses in Germany

Like regulators in other countries, German BaFin oversees correct operation of financial system and ensures customers’ security. Therefore, the emergence of a significant number of startups related to crypto-currencies on market, and a lot of media attention, forced regulative bodies to take this area more seriously. In December 2013, the regulation of crypto businesses in...

Assignment of refugees in Ukraine

The Ukrainian law “On Refugees and Persons in Need of Protection” defines the situation of a refugee. The law helps regulate public relations, as well as rights with obligations. According to the law: A refugee is a person who, due to certain circumstances beyond her control, has to leave her country, where she was born...

Discover our services

The international company Eternity Law International provides professional services in the field of international consulting, auditing services, legal and tax services.

Ready-made companies for sale

Companies with a bank account around the world

Banks for sale

Established Banks for sale

Ready-made licenses for sale

Forex, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Licensing

Forex licenses, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Offshore company registration

Expert advice on the acquisition of an offshore company

Open a bank account

Open bank accounts in more than 120 banks around the world
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof
+41 435 50 73 23

Kyiv

Baseina street, 7
+38 094 712 03 54

London

Grosvenor Gardens, 52
+44 203 868 34 37

Washington

1629 K St. Suite 300 N.W.
+1 (888) 647 05 40 Toll Free

Vilnius

Gediminas Avenue, 44A
+370 52 11 14 32

Tallinn

Kesklinna linnaosa, Tuukri 19
+372 880 41 85

Edinburgh

Lochrin Square, 1
+44 203 868 34 37

Nicosia

Jacovides Tower, 5 floor
+371 665 550 51

Riga

Esplanade, 7 floor
+371 665 550 51

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai
800938622 Toll Free

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard
+6531594300

Sydney

20 Martin Place
+61 2 888 00 365

Porto

2609 Avenida da Boavista
+351 800 500 206 Toll Free

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7
+995706070360