GNI Account "Segregation": is this or isn't this safe ???

[BSD]

I'm looking for a new broker that runs on a Mac.

Velocityfutures offer you the option of buying US T-Bill as collateral for margin.

Meaning they don't have your cash sitting in their accounts, segregated or not, but you in your own name own guaranteed US government debt, and which also means 90% of your funds are 100% guaranteed - well ok unless the US were to default at least.

Good enough for me.

Problem is my Mac still isn't running there.


So my last shot at a Mac solution are MAN group owned GNI via J-trader.

Now I know Man is one of the largest hedge fund out there but size doesn't mean anything much at all as REFCO or more recent events have clearly shown.

So I want some hard guarantees like velocity can offer re account safety.

What I asked GNI was this:


...do client funds with you fall under the UK governments bank account guarantees ?

Or do you offer any other account insurance, segregation or safeguards ?

Most US futures brokers offer the option of buying US government T-bills as collateral for margin, would sthg like that be possible with you also ?


Reply I received:



Yes you can request to have a segregated account.

We do offer the option of buying government bonds as collateral for margins, however, these would have to be non-seg as we can't keep the bonds in your name and would have to offer the bonds out to the market in order to get cash to give the exchange to cover the margins. In short, yes it is possible.


Anybody here know what their idea of "requesting" a segregated account means, and to what extent does that guarantee my funds in the event of a bankruptcy etc ?

When buying T-Bills you don't don't have to worry about definitions of segregated accounts etc.

And why aren't the government bonds I am buying as collateral for their margin in MY name ?

Doesn't that make the whole exercise pointless and leave me where I am when I just have a regular, non-guaranteed account anywhere else ?

Aren't my funds then again 100 % at risk ?

I'd really appreciate answers from people here who have looked into this.

Many Thanks in advance !!!

 

[foredog]

I'm sure that you have to request that the money is held as "client funds" other wise they are all just lumped together.

 

[BSD]

Thanks FD good point.

Any more views anyone ?

Just seems mighty nonsensical to me to buy T-Bill and then they're NOT in your name ???

What's the point ???

Leaves you just as unprotected as not buying em in the first place ???

Or am I missing sthg ?

Btw, as an aside and à propos of a slightly different topic, but these are the unnegotiated commissions I dug up here on T2W somewhere from last November, just in case someone is interested in a rough guide for trading commissions when dealing with GNI via CQG:


I am pleased to confirm our transaction fees for trading on EUREX, EURONEXT-LIFFE, EURONEXT-PARIS, EURONEXT-AMSTERDAM, ICE, NYMEX, CME, CBOT and NYBOT via the CQG Trader electronic platform.

The transaction charges, as set out below, are quoted inclusive of exchange and clearing house fees and regulatory levies, which are subject to change according to local regulation and GNI reserves the right to pass on these changes for which notice will be given. A minimum transaction charge, will be levied per calendar month of £200/€300/$300

GBP Markets (all contracts) £4.00 one way for all trades
EUR Markets (all contracts) €6.00 one way for all trades
USD Markets (all contracts) $7.00 one way for all trades


For professional trading volumes, the transaction charges are as set out below. These charges are quoted exclusive of exchange and clearing house fees and regulatory levies, which are subject to change according to local regulation and GNI touch® reserves the right to pass on these changes for which notice will be given.

ALL ONLINE EUREX, EURONEXT-LIFFE, EURONEXT-PARIS, EURONEXT-AMSTERDAM, ICE, NYMEX, CME, CBOT and NYBOT contracts

0 – 299 lots per calendar month: Charged As Per Retail Client Structure
300 – 499 lots per calendar month: £2.00/€3.00/$4.00 one way for all trades
500 – 999 lots per calendar month: £1.00/€1.50/$2.00 one way for all trades
1000 - 2999 lots per calendar month: £0.50/E0.75/$1.00 one way for all trades
3000 - 4999 lots per calendar month: £0.25/E0.375/$0.50 one way for all trades
5000 - 9999 lots per calendar month: £0.20/E0.30/$0.40 one way for all trades
10,000 - 19,999 lots per calendar month: £0.15/E0.225/$0.30 one way for all trades
>20,000 lots per calendar month: £0.10/E0.15/$0.20 one way for all trades


Should you, at any time need to place an order with one of our brokers over the phone, you will be charged an additional;

EUREX (all contracts) €5.00 one way
EURONEXT-LIFFE (all contracts) £3.00 one way
EURONEXT-PARIS (all contracts) €5.00 one way
EURONEXT-AMSTERDAM (all contracts) €5.00 one way
ICE (all contracts) $6.00 one way
NYMEX (all contracts) $6.00 one way
CBOT (all contracts) $6.00 one way
CME (all contracts) $6.00 one way
NYBOT (all contracts) $6.00 one way

Initial margin levels will be Exchange minimum.

 

[A Dashing Blade]

Segregated Client Account should mean a ring-fenced account in your name that, in the event of insolvency, is still your ie no creditors can get their hands on it. No idea why you would need to request one, as a client, I would have thought this would happen as a metter of course.

FYI, Futures Betting have this in place (was a London based branch of Barclay's, little bro' is big in in retail banking, had him check them out) which is how come we all had monies returned withing the week after they had that slight hiccup a couple of years back.

Pretty sure this judgement summery relates to that particular case (FB didn't have a segregated a/c with GT)

 

[BSD]

Morning Dashing,

thank you very much for that reply.

Coming from you I now know I can go ahead and know my account will be safe if I get them to segregate that.

Yup, like you say, no idea either why you need to request that, but ok, will do that if that's what it takes.

Just need to see now if their J-trader likes my MAC hehe.

Good trading mate !

 

[A Dashing Blade]

Coming from you I now know I can go ahead and know my account will be safe if I get them to segregate that.

(I'm not providing a money back guarentee!)

 

[BSD]

Haha ok gotcha.



Btw, you cleared that up about UK segregated accounts, but I still have zero clues what all that was about where GNI's broker was telling me "Yes Sir you can buy T-Bills as collateral for margin but then they won't be segregated nor in your name" ?!?!

That particular shining excerpt in his own words:

"We do offer the option of buying government bonds as collateral for margins, however, these would have to be non-seg as we can't keep the bonds in your name and would have to offer the bonds out to the market in order to get cash to give the exchange to cover the margins. In short, yes it is possible."

?!?!?!?!?!?

Heck that strikes me as Orwellian Doubklespeak fact twisting gibberish at its very, very best Lol !!!

Can you get a degree in that somewhere ???