Say “No” to non regulated FX Brokers! Banks not opening accounts for FX Firms meaning client funds are at risk

Major banks are declining accounts to FX Brokers worldwide for holding client funds and operating capital. The result, brokers are being forced to use 3rd level banks offshore and in places where there are no government backed financial security schemes and banking security of these banks are far lower than that used by the major banking firms.

stock market

Whats really happening……….

Tier 1 banks in secure/more stable countries such US, Canada, Britain, Australia, Israel and Cyprus – effectively all regions with a high level banking environment, good safety and compliance rulings and large institutions that carry corporate accounts for some of the world’s largest blue chip companies as well as being home to the lion share of the world’s retail FX industry, are continuing to limit their risk and reduce exposure and they are increasingly turning away FX brokers as customers.

This means brokers options are limited as to where to store their own funds as well as your funds as a customer!

These brokers are now becoming targets of thefts from corporate bank accounts because they are using third degree banks in high risk areas with low level security and almost zero guarantee of its safety. Ever heard someone say my broker didn’t let me withdraw or made money on trading and your broker didn’t let you have your profits? its probably because its already gone and they dont want to tell you and are hoping you just keep playing the forex game and you go broke on your account.

Just one of the many examples I see below

fx-glory

 

A few extreme cases which highlight the risks that face brokerages that are forced to use third level banks have recently emerged, some of which involve the theft of capital from accounts held by brokerages, due to lack of security of accounts, as many lower-level banks in overseas regions do not have the same level of security as those in regions in which FX firms are used to.

Non Regulated FX brokers are using any bucketshop bank they can get an account with

Trying to get an account with either HSBC or Barclays would be nigh on impossible for a newly established broker, and quite difficult for a well established brokerage with a large capital base, due to the blanket disdain for FX trading – the very business that represents the core activity of these very same banks!

In summary, it is worth being very cautious of working with overseas brokers that are outside of recognised regulatory organisations and stick to regulated brokers such as UK FCA regulated brokers who have to use regulated banks and abide by UK laws reducing your risk of being at the mercy of market manipulation price fixing and malpractice as per the above screenshot shows. This is the reason why we chose to partner with GKFX and FXTM.

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