Risk management February 11, 2008
FXCM allow us to have more than one account in the same control panel myfxcm.com.That mean that you can create a extral account in FXCM.What the purpose for this account?This is to move your fund to that account when GalleonFX is having a downfall.It better than revoke the LOA.When GalleonFX is at profit move the fund back into the manage trading account.You can easy see the downfall in GalleonFX.However it is only advicable for expert user.As most people will not be able to see what will happen in the future.News like the French trader that loss 5 billions Euro are some major news that will affect the currency market.These are indication that we should move the fund.This enable us to have less losses.
If GalleonFX have closed down due to some reason. Our money will be still in
FXCM. All trading will stop.
We can stop GalleonFX to trade for us anytime by emailing to FXCM to revoke the
power we give to GalleonFX.Or go to http://myfxcm.com/ and login to do it. However I don’t advice anyone to do that.Unless you
are very sure of this.
If GalleonFX closed down. FXCM have automatic forex trading system. FXCM currently has a positive trade result. However the profit is less than GalleonFX. We can use it if we have an account of over 5000USD in FXCM.
Only FXCM UK protects customer fund account (In the unlikely event of FXCM UK’s
bankruptcy, clients of FXCM UK would be considered secured creditors and receive
priority in bankruptcy proceedings.). However to fund a FXCM UK account, you
needed to have 100000 USD or 100K USD in order for GalleonFX to trade for you.
Taken from http://www.fxcm.com/segregated-accounts-news-release.jsp.
07/25/07 — The FXCM Group announced that accounts with Forex Capital Markets,
LTD (FXCM UK) are fully segregated in accordance with U.K. financial
regulations. FXCM UK accepts accounts from the United States and over 100
countries.
In the unlikely event of FXCM UK’s bankruptcy, clients of FXCM UK would be
considered secured creditors and receive priority in bankruptcy proceedings.
The FXCM Group is offering this option through its U.K. affiliate because funds
held by US-registered Forex Dealer Members are not segregated. If a Forex Dealer
Member becomes insolvent, clients do not automatically receive priority status
in bankruptcy proceedings.
Recently, a U.S.-registered forex broker went into receivership due to
undercapitalization. For a period of time, clients of the broker were unable to
access their funds and faced the possibility of financial losses. This situation
may recur because current capital requirements for US-registered forex brokers
are minimal.
FXCM is financially strong, with reserves that far exceed regulatory
requirements. The FXCM Group has over $120,000,000 in firm capital (assets minus
liabilities).*
Drew Niv, Chief Executive Officer of the global currency trading firm, pointed
out several features of the FXCM UK segregated account:
Forex regulations in the UK differ from the ones in the United States;
FXCM UK is now accepting accounts from over 100 countries, including the United
States;
The Financial Services Authority (FSA), one of the world’s most respected
financial regulatory bodies, administers these regulations;
Opening an account is quick and easy: Applications may be submitted online.
Drew Niv stated, “FXCM is offering segregated funds through FXCM LTD as an
additional value to our clients. While FXCM is one of the largest
U.S.-registered Forex Dealer Members, we still want to provide our clients with
additional legal protections for those who want their funds segregated.”
“Many forex firms are teetering on the brink of bankruptcy; FXCM is strong. We
believe that it is vitally important that all currency trading clients have
complete and verified information on the financial strength of forex trading
firms. That is why FXCM has taken the major step of making our balance sheet
public, and challenged other firms in the industry to follow our lead,” said
Niv.
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