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I am mainly concerned with EU regulations, but I assume others would have some interests relating to the situation in the US.

Are retail forex trading accounts like those offered by FXCM or GAIN Capital (forex.com) protected by deposit guarantee schemes? Does it matter in what EU country you are located? My current location is Sweden.

Brythan
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Christ Dher
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2 Answers2

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The deposit guarantee protect certain types of accounts at certain financial institutions. The details vary depending on where the bank (or financial institution) is incorporated. Your best bet is to contact the relevant authorities to find out if the corporation is covered. If you want to read a bit more check here (in Swedish). https://sv.wikipedia.org/wiki/Insättningsgaranti

In Sweden it is Finansinspektionen http://www.fi.se. that handles Swedish banks and institutions listed in Sweden (which neither FXCM or GAIN are).

But it might be much easier. Wikipedia may be a start:

https://en.wikipedia.org/wiki/FXCM "FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker, now run from London after being banned from United States markets for defrauding its customers."

So, I would not put my money there.

https://en.wikipedia.org/wiki/GAIN_Capital Perhaps better, but I would not bet on them either.

ghellquist
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Under CASS regulatory rule book which adjudicates how client funds in financial institutions should be treated, your funds are segregated from platform assets and therefore, those client funds cannot be used to reimburse creditors in the unlikely event of insolvency.

In the event of insolvency, and FXCM (for example) cannot satisfy repayment claims, you are eligible for compensation as per FCA regulations up to and including £50'000.

I am, however, not sure whether this applies to a "spread betting" Forex account (such am account exempts you from income and capital gains tax obligations). I would think such regulations pertain, but this is something you will need to ascertain for certainty from the FCA, whos number you can glean from Google.

Andrew Packman
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