A friend (trading futures) maintains accounts with 3 brokers clearing through 3 different FCMs. I'm still trading (futures) small so I keep just enough funds with the broker for trading, with the other half in my bank account earning interest. I can see it would be a bit of a nuisance day trading through more than 1 broker, but it would be better than losing it all.
Because Europe is a place in South Alabama that will be covered by the above law isn't it? What a relief that is to the millions of dollars of European traders money that has gone missing! You need to get a globe and realise that not everyone is American. People will be hosed by this there is no doubt, you can't blame people for being paranoid from now on. The funny thing is that you have probably signed a contract that by means of taking 8 routes to go from A to B would mean that you have exactly NO rights to ANY of your cash if your clearer went bust.
Fair enough. However I would say that MF can't be the only brokerage out there who has problems. It's unlikely that it was the only firm doing these kinds of transactions.
I'm from Europe. I don't like the sound of that, but it makes sense. Why doesn't USA join the EU, that would be nice. Oh no, wait... Seriously though, I thought there were better guarantees for international clients. The US law touts itself on consumer protectionism, but I forget that it's for US citizens only. It's also surprising that this hasn't been mentioned or talked about much until now. Most industries have a few people reading the contracts fine print and warning all the others. I haven't seen any of that within retail trading.
I never implied any such thing, dumbass. In fact, I tried to explain how the priority queue for customer funding recovery works with a US regulator. You need to understand that a European citizen is not, in fact, a United States citizen. A European citizen cannot necessarily assume that another country's legal system is germane to them, and vice-versa. US segregated, then overseas segregated, then all others. The hedge fund shell registered in the Bahamas who cleared OTC swaps that did not get financially cleared through ClearPort or ICE-LCH is going to get completely fucked.
I don't believe you've told any truth, let alone the "shocking truth". How it's supposed to work" The principle of segregation is that customer funds are kept separate from those of the firm. Theoretically, the firm could go bankrupt and not have that affect customer funds. Firms have a "capital account"... which would be used to settle uncollectible debits from customers. If the capital account gets used up, the firm would be required to either post more capital or close. Segregated customer accounts could be withdrawn by the customer or transferred to a new broker. Should there be swift and sudden customer customer debits large enough to deplete the firm's capital account... with uncollectible debits still remaining..., customers could be required to share in the balance of losses until debits are satisfied. (Such provisions likely to be invoked only in the most dire and extreme market crashes. The market crashes of 1987 and of 2008-09 were NOT "extreme enough".) In the MF Global case, however, they apparently (and illegally) used customer funds to back losing trades of the firm. It has been said that this is a "first" case of such a violation and abuse. Prison time should be awaiting those involved, one would think.