Discussion in 'Retail Brokers' started by Mr.Sir, Jul 11, 2018.

  1. Mr.Sir


    Hi folks,

    i recently discovered this obscure futures broker (AMPfutures) and have no clue about them. they are offering very low margin requirements but are they legit?

    they don't seem FDIC/SIPC insured......what am i missing? should we worry about our funds?

  2. cvds16


    they are not quite so oscure ... they have been around for ages ...
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  3. Mr.Sir


    Thanks Bob,

    as a client at such a firm, would have access to my "customer segregated" account for my own auditing?

    it's not that I don't trust AMP to stay straight.....I don't trust the NFA to keep AMP straight :)
  4. truetype


    NFA doesn't monitor any broker day-to-day. NFA conducts periodic audits. I'm not sure what you mean by "auditing your segregated account." Either you believe your brokerage statements and your broker's published financials, or you don't. No broker will invite you to its back office to rummage through its books and records.
  5. Mr.Sir



    my sentence is pretty clear..... i want access to the bank account they will open for me "my segregated account". i want to know the bank's name, and account number so i can check the balance myself....what do you NOT understand????

    "Either you believe your brokerage statements and your broker's published financials, or you don't. No broker will invite you to its back office to rummage through its books and records."

    go and tell that to the PFG and MF global clients!!!

    believe brokerage statements you for the chuckles
  6. truetype


    There's no such thing. A broker doesn't open thousands of "bank accounts," one for each customer. I don't think you understand how futures brokerages work. Please read up on it.

    "Segregated" is a term of art. It means client funds in aggregate (not individually) are (supposed to be) segregated from the broker's own capital.
    Last edited: Jul 11, 2018
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  7. Mr.Sir


    thank you guys....

    ya...@truetype....makes sense.....but damn it, it wouldn't cost them nothing if they actually opened an individual account for EACH client......heck, i would do it that way....easier book keeping too.

    anyway, thanks guys
  8. truetype


    That's a total misunderstanding of how futures brokerages (or for that matter, securities brokerages or even banks) actually work. Again, please educate yourself. There's plenty of material on the Web.
  9. Overnight


    BMO Harris Bank
    111 W. Monroe
    Chicago, IL 60603

    If you want to "check the balance", you just look at your trading software/statement It will show you how much equity you have.

    Does that help?
  10. heispark


    Read this. Trading with US brokers is quite safe. Still worried? then pick bigger ones. Interactive Brokers is quite big.

    Is It Safe to Invest at Just One Brokerage?

    But financial advisers say some people to whom they suggest the move are leery. "Some investors will say they want to spread their money between several brokers, that they don't want to put all of their eggs in one basket," says Frank Boucher, a certified financial planner in Reston, Va.
    Concerns about sticky-finger brokers or a firm going under are understandable, with memories still fresh of Bernard Madoff's more than $60 billion Ponzi scheme and the collapse of commodities brokerage MF Global Inc. Still, advisers and other financial specialists say there are numerous protections in place for investors.
    Layers of Protection
    For starters, mutual funds and exchange-traded funds have some built-in safeguards. They are required to place their assets with third-party custodians for safekeeping, and regulations require the custodians to segregate the funds' assets from other assets held by the custodian.
    The Securities Investor Protection Corp., headed by Stephen Harbeck, can step in when a brokerage fails. BLOOMBERG NEWS
    So, while a fund may be in the name of Vanguard Group or T. Rowe Price Group Inc., for instance, the underlying securities are held by a custodian to protect the fund investor. Vanguard uses firms including J.P. Morgan Chase & Co., State Street Corp. and Bank of New York Mellon Corp.
    Further, "the fund and the fund service company are separate legal entities, and the fund's assets aren't available to the creditors of the service provider," in the event that the provider goes under, says Vanguard principal Barry Mendelson.
    At the securities-firm level, one fairly common misconception is that the investment firm itself has some claim on the investors' assets, when in fact assets in client accounts strictly belong to the clients and legally must be kept separate from the company's own assets.
    Another layer of protection is the Securities Investor Protection Corp., a nonprofit, nongovernment corporation funded by member securities firms. SIPC acts as protection for investors if the brokerage firm holding the investors' assets fails and there are cash and securities missing from customer accounts.
    Generally speaking, stocks, bonds, mutual funds and other registered securities are covered, while unregistered limited partnerships, foreign currency, fixed annuity contracts, and commodity options and futures contracts aren't covered. (SIPC doesn't protect investors from declines in the market value of their securities, even in cases where the decline in price is the result of fraud, notes SIPC President and Chief Executive Officer Stephen Harbeck.)
    And there is a limit to how much SIPC will cover—the corporation will reimburse investors up to $500,000 per account holder per account type, with coverage of cash limited to $250,000 per account. (Protection is in addition to any prorated share of assets investors may receive from the failed firm, if that share is insufficient to cover the loss.)
    Many brokerage firms also provide additional protection beyond SIPC's limits through private carriers—typically called "excess SIPC" coverage. Maximum amounts vary by firm.
    Payment isn't instantaneous. If the debtor firm's records are accurate and another brokerage firm is willing and able to accept an account transfer, a trustee may be able to transfer assets, supplemented with SIPC funds as necessary, in a week to 10 days. If there are complications, the process can take months.
    Madoff and MF Global
    Madoff clients with under $875,000 have already been paid in full, says Mr. Harbeck. Those with multimillion-dollar claims have received 43% of their claim back plus the additional $500,000 from SIPC, Mr. Harbeck says, and will share in any additional assets recovered by the trustee and his counsel.
    Not including the continuing Madoff case, from 1970 through 2012, only 351 people haven't received the full amount of their assets left with a collapsed SIPC-member firm, according to SIPC. That's because the investors' claims in those 351 cases exceeded the SIPC maximums and the amount of available customer property.
    Still, says Mr. Harbeck: "You can't say there's absolutely no risk. You just can't."
    MF Global, meanwhile, had both commodities and securities customers. The securities customers were virtually made whole within a few months, said a representative for the court-appointed trustee. The commodities customers trading on U.S. exchanges, however, don't fall under SIPC, but have received 98% of their claims so far.
    Overcoming Anxiety
    While there's no way to completely remove institutional risk from the equation, many advisers say that the benefits that come from account consolidation in many cases should outweigh fears of broker malfeasance.
    Washington Wealth Management Chief Executive Rob Bartenstein, in San Diego, says he doesn't typically recommend that the average investor split assets in order to hedge institutional risk, noting that modern history "demonstrates that the risk of loss is relatively low in these scenarios due to regulatory oversight and intervention, adequate insurance and other backstops."
    Michele Royalty, 66, of Mammoth Lakes, Calif., a recent retiree from the pharmaceutical industry, says she had some initial apprehensions about consolidating all of her investments. Still, Ms. Royalty—an active do-it-yourself investor—says she decided to move all of her accounts to Fidelity Investments, primarily because the ease of management outweighed her concerns. "My setup is a lot simpler," she says, adding that it will also be much easier for her heirs to manage.
    Ms. Prior is a staff reporter for The Wall Street Journal in New York. Email her at
    Last edited: Jul 11, 2018
    #10     Jul 11, 2018
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