5000$ in segregated account at alpari

dollarfinder · 01-08-2009, 04:35 PM

I was reading Alpari (UK) Ltd Announces Record Customer and Forex Trading Volume Growth in 2008, Alpari Brand's 10th Birthdaythat on alpari UK web site. What they say is, it seems, that if you open an account there, should Alpari have trouble, the first 5K of this account are protected on a segregated account.
So, at least if you have limited money on your account, you should not fear a real problem.
Did I understand that right ? I must say that I am not 100% sure I get right this segregated account thing (who is responsible for that money?...).
Anyway, that's a quite cool regulation, it means if you go for a regulated broker, your money won't vanish madoff-style

grrosk · 04-30-2009, 01:13 PM

Sorry for my ignorance. What is a segregated account?

rstr · 05-09-2009, 08:12 AM

Hi,

segragated Accounts are Accounts where your Money must be hold on a seperated account from the brokers money at an official bank.
the broker only has the way to charge your bank account with your orders.
you have to check it with the daily report.

the advantages for segregated accounts is that in case of brokers bancruptcy your money is not lost because it is save at the bank.
in case of a bank bancruptcy there will be the country individual deposit guarantee

this procedure is mostly used at brokers established in UK.

but be careful. read the terms of business of your broker.
it is not mandantory that the broker (also in UK) must do that fully.

Three Examples (all are FSA regulated):
1. Royal Bank of Scotland : The deposit guarantee for Online Brokerage is at this moment based on the earlier ABN Amro in the Netherlands, which is higher than in UK. Then the next thing there is that at this moment the bank is fully integrated into sovereign risk.

2. Alpari UK : they hold your deposit segregated up to 5000,00, After this they transfer your money into their company.

3. Activtrades LTd. : They hold your deposit fully segregated up to what UK Law says at a Major Bank. And FSA says that they have the Duty to control that at the Bank...(whatever this will mean at a Major UK Bank like Barclays)