How safe is our money with US brokers ??

This is a discussion on How safe is our money with US brokers ?? within the Forex forums, part of the Markets category; I'm just about to open up an account with FXDD. Up until now I've only ever spreadbet, with companies who ...

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Old Jun 6, 2006, 2:00pm   #1
 
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How safe is our money with US brokers ??

I'm just about to open up an account with FXDD. Up until now I've only ever spreadbet, with companies who were regulated by the FSA. Is there any equivalent protection of US forex brokers, which applies to international customers ?? What happened when Refco went under - did customers lose out ?
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Old Jun 6, 2006, 2:25pm   #2
 
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The NFA is the US body who has oversight of derivatives and trading etc. Forex is an OTC product however and NFA membership is voluntary only.

Most forex brokers are unregulated, so "caveat emptor".

At Refco the regulated futures part of the business was unharmed and seamlessly transferred over to the firms that bought those parts of the business - I know as I had an account there at the time.

The Refco forex part of the biz was unregulated and customers who had money there still havent got any of it back. Be very careful who you select as a forex broker - there are a LOT of tinpot bucket shops out there.
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Old Jun 6, 2006, 2:27pm   #3
 
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rjay started this thread Thanks for that. If I knew of any UK broker who used the Metatrader platform, had decent spreads and was FSA regulated I'd go with them ... but I haven't come across any.
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Old Jun 8, 2006, 6:52pm   #4
 
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A difference which has been mentioned before between futures brokers and forex brokers is that generally forex brokers can only take you for the cash in your account whilst a futures broker can chase you for any additional losses above the amount in your account.
Could be useful to know when deciding who to go with and how much to put in the account.
I was suprised by this but one broker confirmed it. to me for his firm.
Obviously you would need to check this with any broker you consider going to.
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