Segregated account for Forex brokers

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Segregated account in Lithuania is designed to give private businesspersons possibilities to hold their assets separate from company’s money. It helps to eliminate the possibility of using fraudulent schemes with a person’s finances: he/she can track their movements on transactions and receive complete data about all operations made.

How to protect investments

Consumers have not been spoiled in previous decades by a variety of investment vehicles for profit. With the advent of a new era of the country’s economic development, the range of fiscal products in which you can invest has expanded significantly, but at the same time, the risks have also increased. The higher the income received, the more likely to burn out.

To protect the money of citizens, the state prescribes certain provisions being obligatory to observe in securities market. What is the first thing you need to protect a newcomer to the securities market:

  • fraud by an unscrupulous broker;
  • bankruptcy or fiscal collapse;
  • force majeure circumstances.

Effective method to enlarge consumer assurance is introduction of separated accounts. Prerequisites were as follows: assets of private clients are better secured than deposits of brokerage or investment firms.

Presence of segregated account for FX in Lithuania is designed to assure transparency of all assets; it, firstly, makes control and analytics easier, and secondly, works on the image. If a new person is immediately proposed to deal with separated accounts, he/she understands the brokerage firm is ready to make extra efforts to insure against any surprises. Even though the system of cash flow in case of turning to such accounts is somewhat more complicated, and accompanied costs are higher, it pays off in rising levels of customers’ loyalty.

Risking points segregated bank accounts for Forex insurance

Segregated accounts for Forex brokers in Lithuania insures businesspersons against following possible risks.

  • Misconduct

In case brokerage firm decides to use the funds entrusted to it under management to implement fraudulent schemes, to appropriate other people’s money, it’ll be easier for customers to return their own capital as part of the charchback procedure (recognizing transactions performed on account as invalid).

  • Bankruptcy

If brokers demonstrate bankruptcy or suddenly decide to disappear from market, customers will not lose money.

  • Force majeure.

Assets of individuals held in bank accounts are subject to compulsory insurance. It means that in case of bankruptcy of a credit institution, the DIA will return the money to a private executive.

Procedure for creating Lithuanian FX segregated accounts mostly is something like next-mentioned:

  • customers write an application addressed to the broker with a request to create such an account;
  • after getting approval, client deposits a part of funds to account;
  • next, you need to take an account statement from the bank confirming assets’ availability on it and get it to broker.

That’s it, trading accounts are opened and people may trade for all amounts within broker requirements. At the end of each certain period of time, the broker sums up the results, and if the customer has traded at a loss, broker asks to send part of funds to brokerage account.

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