Help non-seggrated A/C with Etrade

HI Guys

I have a 6 figure sum in a non-seggragated a/c with etrade for CFD/Futures trade. As etrade sp is tanking massively does this non-seggragated have a risks, all funds are together clients and firms.

If etrade goes belly up, am I protected a max of £48k or that does not count for non-seggrated a/c? and £0 for me

sunseeker888 said:

HI Guys

I have a 6 figure sum in a non-seggragated a/c with etrade for CFD/Futures trade. As etrade sp is tanking massively does this non-seggragated have a risks, all funds are together clients and firms.

If etrade goes belly up, am I protected a max of £48k or that does not count for non-seggrated a/c? and £0 for me

Click to expand...

On a segregated account you are NOT part of there assets if they go bust...therefore if things go wrong and the firm goes bust. I believe you will be in a long chain of creditors and may not possibly get your money back. I did however think that if they are FSA registered, they had to have clients money segregated ???..this is how I understand this anyway...perhaps i may be corrected !!

mechtraderpro said:

On a segregated account you are NOT part of there assets if they go bust...therefore if things go wrong and the firm goes bust. I believe you will be in a long chain of creditors and may not possibly get your money back. I did however think that if they are FSA registered, they had to have clients money segregated ???..this is how I understand this anyway...perhaps i may be corrected !!

Click to expand...

Well, you see for leverage products, the money has to be in non-seggragated account, there no other way, than to pull all the speculators funds together + firm money, so that funds are available for these kind of trades.

I have to give FSA a call tomorrow, if I am protected up to £48k for non-segragated a/c. If the money are in seggragated a/c (sharedealing) you 99.9% fully protected as the shares are registered to your name not the firm , also your fund is a nonimee a/c, so even it goes belly up u r fully protected, but the broker has to stipulate that in t&c that they offer that.

sunseeker888 said:

HI Guys

I have a 6 figure sum in a non-seggragated a/c with etrade for CFD/Futures trade. As etrade sp is tanking massively does this non-seggragated have a risks, all funds are together clients and firms.

If etrade goes belly up, am I protected a max of £48k or that does not count for non-seggrated a/c? and £0 for me

Click to expand...

I know this is a different company (IGIndex)- but i found this statement on their (spreadbetting) website:-

"While the financial markets and the banking sector are in a state of flux, you will obviously have concerns about where your trading funds are held. We segregate your funds in a designated account, which is ring-fenced from IG Index and covered by the Financial Services Compensation Scheme, to make sure your money is safe."

Just to illustrate that companies offering leveraged products can and do segregate client monies.

Also, is it really necessary to keep a 6 figure sum in the account? Why don't you transfer some of the money away from there? I would only keep in there what is absolutely necessary for you to trade with.

It is definitely worth finding out for sure whether the funds are segregated or not. What a massive price to pay if things go belly-up and they are not! If they don't segregate then perhaps you should consider transferring your trading to another company (maybe not all of it, but at least £50,000 of it- that much at least would be covered then).

sunseeker888 said:

Well, you see for leverage products, the money has to be in non-seggragated account, there no other way, than to pull all the speculators funds together + firm money, so that funds are available for these kind of trades.

I have to give FSA a call tomorrow, if I am protected up to £48k for non-segragated a/c. If the money are in seggragated a/c (sharedealing) you 99.9% fully protected as the shares are registered to your name not the firm , also your fund is a nonimee a/c, so even it goes belly up u r fully protected, but the broker has to stipulate that in t&c that they offer that.

Click to expand...

I understand what you say,,, but the whole point of segregation "ring fencing" is to say in principle that this money is not an asset of the company" and therefore cannot be used to pay "other creditors" incase the firm goes belly up !..If it does then the ring fenced money must be returned to its owners ! if this is not possible then compensation will be paid by the FSA to the tune of the stated limits !..of course check it out , but this is the basic idea of ring fencing ! if yours is not ring fenced then there maybe other clauses for your situation, only information from the "horses mouth" will surfice.