Entry into retail forex might be tell of things to come... International CD and savings offerings, aka deposit accounts, aka fully insured by FDIC. (fwiw; FDIC makes no explicit mention of 100K USD insurance per ownership type. Qualification is a bank deposit account.) Potential exists for new meaning of bucket shop. Legal and insured! Think it can't or won't happen? Gizelle, Jay-Z and other high profilers are creating the need and want in the marketplace. Think of the tranches that can be created and offloaded! Billions in losses offset by collateralized billions/trillions. Osorico
Any fx accounts opened at Citi would not be covered under SIPC coverage, just like their other investment offerings are not covered. The benefit tho would be that the odds of Citi pulling a Refco are low due to their capital and deposit base. Open a real currency account with any of the big banks - BOA, Citi, BONY/Mellon, Wachovia, PNC, JPMorgan, etc, of course you need 5MM+ just to get someone to listen to you - and your money is not protected under SIPC protection either, regardless of the fact that it exceeds the limits of protection.
Who said anything about SIPC? What I said is CITI entry into retail forex may lead to International DEPOSIT ACCOUNTS being offered to mainstreet, which, as a deposit account is insured by FDIC. These type accounts could provide a forex operation a whole different set of options, not to mention those associated on the banking side.... Let's see, online banking, convert your Savings account into Euros, (only 1 conversion allowed every 30-days without incurring additional fees/penalty). Would this have value to a forex operation? Would this have value to a bank? And for the kicker, as a deposit account, at the risk of US taxpayers!
My bad. Meant FDIC, not SIPC. Honest mistake. What you put forth would be good for all those who want that CONVERSION ability for their DEPOSIT accounts, the JZ's, faux important people, etc. But as a TRADING account in a bank, which is what was put forward in the OP, what may confuse people is that they think their fx account would be covered if they trade with a bank like Citi, but it wouldn't.
I don't have the link right now, but there has been an ongoing exemption for banks from the definition of "broker" for some time. I think the latest extension is through September 2008. When final, your deposit account CAN BE a trading account! EDIT: Not exactly the item I was referring to, but worthwhile. Pay particular attention to the term "riskless transaction"; sounds like a legal bucket shop to me... http://sec.gov/rules/final/2007/34-56502.pdf EDIT: and the one I was looking for... http://sec.gov/rules/final/2007/34-56501.pdf