Its still the case, you are an unsecured creditor in the case of a FX firm bankruptcy (except if you deal with a bank). UK is way safer from that perspective (and its the center of the world as far as fx is concerned anyways).
Why wouldn't you be an unsecured creditor of the bank? Are FX accounts at the bank a deposit account and FDIC insured?
I think they are, in addition to the implicit govt backstop of the bigger banks. Not sure what happens to a margin position in the worst case tho and if ECP / professional clients are protected. In the UK there is a futures-like segregation requirement with trust accounts - sounds rather safe (assuming no fraud).
UK futures & FX customers fared badly in the Lehman collapse. US customers lost zero but UK clients -- mostly hedge funds -- bit the bullet for a billion plus.
I don't know how it is, that after opening a trading account with a broker and then funding it, it appears that MY money suddenly belongs to the broker wtf came up with that idea there's something insidiously sick and diseased with a system that can't separate MY money from the funds - and debts belonging to the business I admit to not reading the 'Customer Agreement' - I can't change it so why bother but why aren't fx client funds segragated ? not - as we know it makes any difference I'll have to read Oanda Canada's CA to see what it has to say about segregation but as you know client funds at any/all Canadian brokers - no differention are insured up to C$1,000,000 , so segragation doesn't come into the equation, likewise where the trade takes place has no bearing on client funds being insured I have to think that the U S of A is a corrupt country don't think it started out as corrupt, but the way in which LAW has been used to change the way things are done has corrupted systems why the U S of A has placed LAW above all else is something for a political scientist or historian to answer, but it's definitely a corrupt system that allows a company's creditors to 'steal' the company's client funds to pay themselves it's completely unsensible to me that such a thing can happen, and nothing whatsoever to do with the LAW nor accounting, nor bankruptcy acts some Americans know about the corrupt entity the U S of A has become, the OWS is one reaction to it, homeowners occupying/fighting foreclosure another insurance of course flies above the corruption but it shouldn't be left to brokers to decide whether or not their clients should be permitted to have their funds insured particularly when it isn't the clients that are stealing their own money as to the SIPC " . . . investment fraud in the U.S. ranges from $10-$40 billion a year. Congress specifically considered creating a Federal Broker-Dealer Insurance Corporation, but *law*makers* wisely concluded that such a designation would be both misleading and out of step in the risk-based investment marketplace that is so different from the world of banking." - emphasis added http://www.sipc.org/who/notfdic.cfm