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  • #581
  • Jun 24, 2010 2:14am Jun 24, 2010 2:14am
Whether they have to state it in a PDS or not, you've got very little chance of getting 100% of your money back from any company once they have collapsed. It is the risk you take in doing any business whether it is a Forex broking business, bank, retailer or whatever.

The only exception I can think of is the recent Australian government guarantee to cover bank deposits once the GFC hit, but that is still only a temporary measure. Even a government guarantee is not necessarily iron clad, I can't imagine a greek government guarantee being worth much!
  • #582
  • Jun 24, 2010 8:07am Jun 24, 2010 8:07am
Hi GoMkt

I read before that, once a trader 1st time TT his fund to GoMkt via A bank at X branch - say in Malaysia/Singapore, this trader must use the same bank at the same branch, in this case A bank at X branch, to TT fund transfer? It is said the same goes to fund withdrawal? Can you confirm this TT fund requirement? Thanks.
  • #583
  • Jun 24, 2010 3:56pm Jun 24, 2010 3:56pm
Quoting GoMarkets
That is a bit rubbish then!

Can you call me so we can take a look at fixing it for you?
Rubbish? ...and tell you what exactly?
You may need to make your statement/question clearer
Biggest joker
  • #584
  • Jun 24, 2010 4:30pm Jun 24, 2010 4:30pm
Quoting baron193
Rubbish? ...and tell you what exactly?
You may need to make your statement/question clearer
I believe he was telling you that, because of your proximity to the servers, you shouldn't be getting the big delay. He's not questioning wether you're getting the delay or not. He wants you to call him so you can sort out the problem. At least that's my understanding of it. Have you called him or tried another server?
  • #585
  • Jun 24, 2010 5:19pm Jun 24, 2010 5:19pm
Quoting skoda2008
Whether they have to state it in a PDS or not, you've got very little chance of getting 100% of your money back from any company once they have collapsed. It is the risk you take in doing any business whether it is a Forex broking business, bank, retailer or whatever.

The only exception I can think of is the recent Australian government guarantee to cover bank deposits once the GFC hit, but that is still only a temporary measure. Even a government guarantee is not necessarily iron clad, I can't imagine a greek government guarantee being worth...
Skoda,

Any company here in Australia providing a financial service or products to retail clients needs to provide a PDS by law. The PDS must be written in a certain way so a retail client understands the wording.
The Australian Government is covering only accounts such as personal savings but not business accounts going into default, cheeeee that would be so nice. If you a Customer of GOMarket you will see that your funding is going to be paid in an account named to GOMarket meaning GOMarket is the Beneficiary of that account and not you. The only way to be protected by a default of the Broker is if your funds are held in a segregated account, witch means the Broker is not allowed to touch your money to fund Company expenses. In plain English that means that your funds are only used to fund your day to day trading expenses such as margin, swap and you named it.
  • #586
  • Jun 24, 2010 6:20pm Jun 24, 2010 6:20pm
Quoting billflet
I believe he was telling you that, because of your proximity to the servers, you shouldn't be getting the big delay. He's not questioning wether you're getting the delay or not. He wants you to call him so you can sort out the problem. At least that's my understanding of it. Have you called him or tried another server?
Exactly what I was trying to say. I mean it is rubbish i.e. disappointing that you are gettign a delay and i would liek you to call me so i can have a look at your journals and try and work out the problem. I do not know who you are at this stage, so have no way to diagnose a problem.
  • #587
  • Jun 24, 2010 6:26pm Jun 24, 2010 6:26pm
Quoting Pipstrumpf
Skoda,

Any company here in Australia providing a financial service or products to retail clients needs to provide a PDS by law. The PDS must be written in a certain way so a retail client understands the wording.
The Australian Government is covering only accounts such as personal savings but not business accounts going into default, cheeeee that would be so nice. If you a Customer of GOMarket you will see that your funding is going to be paid in an account named to GOMarket meaning GOMarket is the Beneficiary of that account and not you. The only...
Pipstrumpf you have put it better than I did, so thanks! To confirm, client funds are held in a client trust account, seperate from our own funds.
  • #588
  • Jun 24, 2010 6:43pm Jun 24, 2010 6:43pm
Quoting GoMarkets
Pipstrumpf you have put it better than I did, so thanks! To confirm, client funds are held in a client trust account, seperate from our own funds.
does this means my money is protected if you guys go out of business?
  • #589
  • Jun 24, 2010 11:27pm Jun 24, 2010 11:27pm
Quoting fxoxford
does this means my money is protected if you guys go out of business?
Funds are deposited to the National Australia Bank, an AA-rated bank and of course are held in accordance with the corporatios act and in a clients trust account. These funds are seperate to our own funds and are not used for our own business expenses such as advertising and wages.

We have professional indemnity insurance of course which also protects against fraud and wrong doings of company officials.

If you need extra clarification on how funds are held, ASIC I am sure would be happy to give more info.
  • #590
  • Jun 25, 2010 1:16am Jun 25, 2010 1:16am
Quoting GoMarkets
Pipstrumpf you have put it better than I did, so thanks! To confirm, client funds are held in a client trust account, seperate from our own funds.

to pipstrumpf

It is ofcource known, that there is no garantee that one's money is safe anywhere. Whether it is a bank or a broker, or even under your matras (one fire and its gone).

The thing here is, whether I agree to, to have the broker dealing with my money on his behave, but at my risk.

you see the problem is: I don't know what positons the broker takes to make his profits. If he screws up and loses (big time, we have seen enough brokers go down) than it is my money that is gone too. Not only the broker's.

It is like paying in advance for you new car to be delivered in 3 month. But when delivey date comes up, it turnes out the dealer is broke.
there is no car, but ALSO, it turns out that you have NO CLAIM on any refund of your advanced payment.

That is the real meaning of the content of this frase in the client statement.

I know, when you do business, you always have a risk, but at the same time you have the garantee to still have a claim on any unfulfilled contracts with MY counterpart.
As a creditor in a bankruptcy.
When my positions with a broker are positive and as long as I did not take out the money, there is an unfullfilled contract between me and my broker.

Lets say, he screws up on his own behave and needs all the money in all the accounts with him, to settle his positions, than he will be at zero again. But where am I? My account is empty for my broker needed that money for his settlements. Maybe he is not broke and still can go on, but my money is gone - in other words : I am broke !! and I have NO CLAIM on the postive positions I had.

for the statement says:

In the event of our insolvency or default you may lose any
entitlement to money due from us..


maybe now, you do see the issue, I am tackling here.
  • #591
  • Jun 25, 2010 1:44am Jun 25, 2010 1:44am
Quoting pauljr
to pipstrumpf

It is ofcource known, that there is no garantee that one's money is safe anywhere. Whether it is a bank or a broker, or even under your matras (one fire and its gone).

The thing here is, whether I agree to, to have the broker dealing with my money on his behave, but at my risk.

you see the problem is: I don't know what positons the broker takes to make his profits. If he screws up and loses (big time, we have seen enough brokers go down) than it is my money that is gone too. Not only the broker's.

It is like paying...
Pauljr

I did understand your question to GOMarket but actually made a comment to Skoda's statement. As mentioned the "safer" options for your deposited funds is most likely a segregated account or an AAA bank account in your name which allows you to trade directly. The problem with the bank account in your name is, most likely it does not allow for leverage neither is it available to retail traders trading OTC products.
  • #592
  • Jun 25, 2010 2:46am Jun 25, 2010 2:46am
Quoting Pipstrumpf
Pauljr

I did understand your question to GOMarket but actually made a comment to Skoda's statement. As mentioned the "safer" options for your deposited funds is most likely a segregated account or an AAA bank account in your name which allows you to trade directly. The problem with the bank account in your name is, most likely it does not allow for leverage neither is it available to retail traders trading OTC products.

Yes, you are right. that would be on option.

But that is not directly my concern.

My concern is, that - in my opion - there should be more garantees to clients regarding their account positions with a bank or a broker.

Like there is a discussion going on, that Banks (and other financial institutes) should build up more Own Capital to secure their business and be less vulnerable to selfmade wrong decisions.

The sovability requirements for banks that are in place at the moment, are not met be most of the banks.

This is due to the fact that they have clauses - like the one I tackle here - in many of their contracts. They regard - and therefor use - client funds as their own. Together with these funds it "seems like " they meet the requirements, but for real, they don't.

Using their leverage on these funds, brings it to a situation, that they can easely overwrite their positions, that - in the worst case - cannot be settled with their own capital. That could bring the bank in a insolvable state that it cannot get out of.

If the risk they are allowed to take in dealing would be limited to the amount they can bring up with their Own capital, than clients are still secured as far as their funds regards. The same way we, as clients, are limited by the amount we put into the account. My losses cannot go up more than the amount in my account. As soon as they would overwrite, all my positions are closed.

This "automatic" inclusion of client money in the banks " own capital" should be forbidden. This is the whole reason, why we have a financial crisis at our hands right now.

That would mean that these kind of statements should not be part of any client agreement.

I know this is not an issue that concerns GoMarkets alone. It is an issue with ALL financial institutes. But as I checked the paperwork of GoMarkets, I saw the statement. Therefore it ended up in this thread.

I think however that it is a very important issue, that should be discussed about on a wide scale, for it can help to bring brokers, banks and clients closer to a business relationship that is "safe" for both sides.
  • #593
  • Jun 25, 2010 5:09am Jun 25, 2010 5:09am
Pauljr, (Note: This looks long, but it will be worth it)

I see your point exactly and I concur with your stated concern wholeheartedly.

The difficulty for us of course is that, individually, we are very small fry. Which is why when there is a financial fire, we are the ones who usually get fried (and eaten).

The only clout we have is by gathering our respective concerns (perhaps in forums such as this one) and bringing pressure to bear on those in the regulatory agencies to effect the kind of rules revisions that you are suggesting.

That is, my money which has been tendered to a broker/dealer such as Go Markets, should be in a segregated account accessible only by me, or as authorized by me as a result of an order I have placed in the markets and supported by logs and confirmed data entries made by me. If I agreed to place the trade and my funds in that segregated account can be shown to be needed to cover the risk I authorized, well and good.

Specifically it should NOT be available to them for use in the manner you have suggested - that is to cover their arse when they make an error in judgement in their own risk taking. After all, I don't get to participate in the rewards that may come from that risk taking or from the results of them paying excessive salaries to themselves or any other lousy business decision they may make. Thus why should my investment dollars be at risk to cover such behavior?

Answer - it shouldn't. Right is right and wrong is wrong.

None of this is to suggest that Go Markets should be singled out for this kind of policy because it apparently is condoned by regulatory bodies everywhere. They are just doing what they need to do to be competitive in a market environment that they are subject to. But it is still immoral, and therefore wrong, and the practice needs to be terminated.

However until that golden day arrives you might want to do what I do. Let's say that a given trader has USD$10,000 to run his business trading the forex markets.

Instead of turning that entire amount over to Shade Tree Broker for his trading account and placing trades that put 2% of that at risk in any given position, why not only put the amount with the broker/dealer that you will actually need for the actual trades. Let us say that amount would be USD$2000 for the moment.

The other USD$8,000 (which is the balance of your actual trading account balance would be in an interest bearing account in an entirely different financial institution unrelated or controlled by the subject broker/dealer. It would be just a short phone call away, capable of being wired or EFTed over to Shade Tree Broker, should it be needed.

Conversely, as you earn profits from your successful trades, you would siphon off excess funds not currently immediately needed for current trades by moving them in the other direction. This would keep those funds from being an attractive nuisance to tempt the broker/dealer in being less than prudent.

This approach, of course, makes it look like you are being reckless and placing too much at risk on any given trade or group of trades. But you will know the truth - that your actual risk is related to your total combined bank account size - not to the amount visible at your broker/dealer.

Thus your total risk capital would still be available to cover the positions you were taking in the market but you would be compartmentalizing your risk much the same way that the designer of submarines provide watertight bulkheads to keep the boat from sinking should it take a torpedo in one of the other compartments.

Another way of saying this is to not put all your eggs in one or even two baskets.

Anyway, that's the way it looks from here.

Rich
  • #594
  • Jun 25, 2010 5:57am Jun 25, 2010 5:57am
Quoting billflet
I believe he was telling you that, because of your proximity to the servers, you shouldn't be getting the big delay. He's not questioning wether you're getting the delay or not. He wants you to call him so you can sort out the problem. At least that's my understanding of it. Have you called him or tried another server?
Yes thank you for the clarification, i gather that is what he means.
Biggest joker
  • #595
  • Jun 25, 2010 10:35am Jun 25, 2010 10:35am
Quoting Abinadi
However until that golden day arrives you might want to do what I do. Let's say that a given trader has USD$10,000 to run his business trading the forex markets.

Instead of turning that entire amount over to Shade Tree Broker for his trading account and placing trades that put 2% of that at risk in any given position, why not only put the amount with the broker/dealer that you will actually need for the actual trades. Let us say that amount would be USD$2000 for the moment.

The other USD$8,000 (which is the balance of your actual trading...
This point gets brought up occasionally, but unfortunately escapes far too many people. Having your whole forex trading nut in a single place adds another, almost invisible, layer of risk.
  • #596
  • Jun 25, 2010 11:50am Jun 25, 2010 11:50am
Quoting billflet
This point gets brought up occasionally, but unfortunately escapes far too many people. Having your whole forex trading nut in a single place adds another, almost invisible, layer of risk.
That was one of my points exactly, and well stated, billflet. I neglected to sum it up that way, but giving all of your trading money to one of the people in the crowd while you're fighting your current position out is less than total wisdom.

And who needs yet another "layer of risk" in this game, much less an invisible one when you're in such a tough fight?

At least have the money held by someone who has sworn allegiance to just you. That's not totally safe, for sure, but far safer than having those temporarily excess funds in the hands of the same guy who has a "dog in the fight", as it were.
  • #597
  • Jun 25, 2010 12:25pm Jun 25, 2010 12:25pm
Quoting Abinadi
That was one of my points exactly, and well stated, billflet. I neglected to sum it up that way, but giving all of your trading money to one of the people in the crowd while you're fighting your current position out is less than total wisdom.

And who needs yet another "layer of risk" in this game, much less an invisible one when you're in such a tough fight?

At least have the money held by someone who has sworn allegiance to just you. That's not totally safe, for sure, but far safer than having those temporarily excess funds in the hands of...

Thanks guys, I see I am not the only one looking further than my own nose is long. I do get the picture and I came to the same conclusion. as what my broker depostits concerns.

But still it makes me feel uncomfortable, knowing that if one wants to get into this kind of BUSINESS - I see it as business, NOT GAMBLING GAME like many do - one has to deal this way, only because there are no other means at hand.

But like you suggested it still is better to keep control over your funds in that way until better times come around.

I also hope, more readers wake up and see in what world we live and work together to get it in BALANCE again.

Ofcourse I also do understand that GoMarkets is only one of the many,trying to get a piece of the cake.

But I am sure that any broker, that would not work in this way would attract a big load of serious traders - even when they trade small positions compared to the financials - and be very succesful.
  • #598
  • Jun 25, 2010 12:45pm Jun 25, 2010 12:45pm
Quoting pauljr
But I am sure that any broker, that would not work in this way would attract a big load of serious traders - even when they trade small positions compared to the financials - and be very succesful.
Absolutely that would happen, pauljr. The democratization of the information process represented by the same internet that allows retail forex trading, also provides a way for us to communicate our mistreatment and bring about the pressure needed for change in the way our trading funds are handled, stored and accounted for.

If a broker were to step up into the retail forex arena and show that he was going beyond the skimpy mandatory regulatory requirements and was truly taking a pro-trader posture by putting real protections into place (such as fully segregated and interest bearing accounts) that were not available to the broker/dealer or their creditors, the buzz would be HUGE and retail traders would flock to such a scenario.

Perhaps some enterprising broker/dealer out there can see that potential and step up to the plate. I'll sure be watching for him/her.
  • #599
  • Jun 25, 2010 9:23pm Jun 25, 2010 9:23pm
Quoting Abinadi
Specifically it should NOT be available to them for use in the manner you have suggested - that is to cover their arse when they make an error in judgement in their own risk taking. After all, I don't get to participate in the rewards that may come from that risk taking or from the results of them paying excessive salaries to themselves or any other lousy business decision they may make. Thus why should my investment dollars be at risk to cover such behavior?

Answer - it shouldn't. Right is right and wrong is wrong.
I agree with this. Traders need a fairer deal. Regulators should forbid clients' own funds being used as margin for the broker's own trading, as traders have no control over the trading decisions of the broker.

So which brokers are currently the safest to hand money to? At the moment the safest I can think of with whom I currently have an account would be Interactive Brokers: How Interactive Brokers Protects Its Customers' Assets.
  • #600
  • Jun 25, 2010 9:43pm Jun 25, 2010 9:43pm
By the way, I think this issue needs a new separate thread, as it is not just about Go Markets.
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