Security of Client Funds with Foreign Exchange Brokers/Banks29 November 2008 - Mark Maffia (Which Way To Pay)
Security of Client Funds with Foreign Exchange Brokers/Banks
When you use a Foreign Exchange Bank, there are a number of security measures in place to protect the client's funds during the transaction process. All banks are regulated by HM Revenue& Customs and certain banks are regulated by the FSA; which creates transparency as they are required to report their position to the FSA at the close of business every day.
Additionally all funds sent to the banks for purchase of foreign currency are held in segregated client accounts that are only used for client transactions and so are totally separate from the banks' own business accounts. These accounts are opened by the company in the name of the client and are for the sole use of the client in which currencies purchased can be held until instructions are received to pay monies away. The money therein cannot be traded or used in any fashion by the Foreign Exchange Bank for their own purposes.
Please find below statements on security from the individual banks.
Foreign Exchange Brokers/Banks
Security is always of the highest importance when transferring large sums of money. Your money is completely safe with World First. We are regulated by HM Revenue & Customs as a Money Services Business. All funds sent to us are held in segregated client accounts that are only used for client transactions and are totally separate from our business accounts.
To read more about World First security, click here
Raphaels Private Bank
Raphaels Bank are one of the oldest independently owned banks established in 1787. Unlike the majority of FX brokers, as a private bank they are regulated by the FSA. One of the key benefits of this is having to report to the FSA at the close of each day what positions are being held which creates transparency and additional security as they have boundaries which they are permitted to trade between. When your funds are with Raphaels they are held in a client holding account that forms no part of their assets. Also, due to the fact that they are a bank, they can guarantee £50,000 per client (so a couple could have up to £100,000 guaranteed) should anything happen to the bank under recent government legislation. A provision that cannot be applied to brokers.
TorFX is regulated by HM Revenue&Customs (no: 12191606), and is a member of the UK Money Transmitters Association. All client funds are held in client segregated accounts with our banking partner, Barclays Bank PLC. TorFX will send your currency to its destination free of charge, by TT/CHAPS. We can pay your solicitor, vendor, notary or supplier direct, saving you time and money. Our same day international payments are fast, reliable and free (one free transfer per currency transaction ). We can also provide you with an internationally recognised payment confirmation as soon as your currency has been sent.
What happens to my money when I make a transaction using Currencies Direct and how secure are my funds during that process?
Axia hold a client trust account with the Royal Bank of Scotland which is separated from the companies regular business accounts. All client funds are deposited in to our client trust account and are always classed as belonging to our client. In the event of Axia ceasing to trade for any reason the funds in Axiaís client trust account cannot be offset against any company debts and are returned to the original source. This is the main reason along with current money laundering regulations that we cannot accept cash or cheque payments into our accounts as our banking partners are unable to trace the source of the funds. The account is also a non-interest bearing account because of the security features attached to it. As security of funds is paramount to Axia we believe that having this facility for our clients carries greater benefit than the ability to earn interest for them.
In relation to Axiaís trading process we always aim to trade our clientís funds before we receive payment in. The two main reasons for doing this is that our clients know they have received the best rate before we physically receive their funds and as a currency transaction is already in place the moment the base currency arrives into Axiaís client trust account it can be offset against the trade and the outgoing currency can be paid to the beneficiary immediately. This means that our clients funds are only ever in the client trust account momentarily before being forwarded on in the pre-purchased currency.
Is My Money Safe? All client funds are held in a fully segregated client account at one of the main UK clearing banks. Should you require a status enquiry/bank reference, we will be more than happy to supply you with the required contact details to enable you to make such enquiries.
When clients transfer money abroad through Moneycorp, their funds go straight into a designated Client Account held with one of our partner banks. These accounts are completely separate from the Groupís bank accounts and at no time is this money used by the Group or considered part of the Groupís assets.
The Moneycorp Group has been dealing in foreign exchange for over 29 years and also operates a successful chain of bureau de change branches at Gatwick and Stansted airports and throughout Central London. The Royal Bank of Scotland (RBS) is also a significant shareholder in the Group.
HMCE are the official government watchdog regulating the Forex market and the issue licences to trade very strictly. They conduct audits every six months and will act in the strictest manner if our processes and procedures are not up to date. All of our accounts are held and maintained at Royal Bank of Scotland and our systems are RBS based. That includes trust accounts that are RBS owned and maintained. The purpose of escrow accounts is to protect clients from embezzlement and liquidation. If anything was to happen to our operations client money is still safe and secure with RBS.
Our London operation is authorised and regulated by the FSA, the Australian side of our business is regulated by the Australian Securities and Investments Commission. Caxton FX is committed to the safe exchange and transmission of client funds. In order to achieve this, we have developed systems and procedures that are designed to protect their money. Included as part of this are the following:
Client funds are held in dedicated client accounts. All staff are security vetted prior to engagement. We have specific risk management systems in place. We protect our business from technological risks such as virus attacks, technology failure or unauthorised systems usage. We observe proper standards of market conduct as outlined in our code of conduct. A specific customer complaint procedure is adhered to.
Caxton FX subscribes to the FX Code. This is a voluntary code which sets standards of good practice for foreign exchange companies and their employees to follow when they are dealing with Personal and Corporate customers. It provides valuable protection for you and explains how employees are expected to deal with you day-to-day and in times of difficulty. The code applies to Foreign-exchange services- including the exchange, payment and transfer of funds.
HiFX have always taken the security of their client's funds very seriously and within the current climate it is more important than ever that every client is assured. Established in 1998 HiFX have 2,500 corporate clients in over 100 different industry sectors and helps over 30,000 private clients buy and sell currency annually. Last year HiFX advised and executed over £20 billion in foreign exchange, HiFX have in place a trust account held by Barclays, legally guaranteeing 100% of HiFX client's funds. HiFX are members of SWIFT, meaning client's funds are sent in the quickest and most secure fashion to the overseas destination.
HiFX PLC has maintained client segregated trust accounts with Barclay Bank PLC since 1998 and these accouts have been conducted to the Bank's satisfaction. The Bank is not entitled to combine the client segregated trust accounts with any other account of HiFC PLC or to exervise any right of set-off or counter claim against money in the client segregated trust account in respect of any sum owed to us on any other account by HiFX PLC. The designation of the client segregated trust accounts sufficiently distinguished the account from any general accounts held on behalf of HiFX PLC.
When opening a client segregated trust account for HiFX PLC or when accepting the deposit on monies into such client segregated trust account, it must be understood that the Bank, whilst acknowledgeing the designation, accepts no responibility for its correctness and afficacy relating to other parties, nor for the propriety of withdrawels from such client segregated trust account, which comply with the banking mandate for HiFX PLC.
Outside of the banks we are one of very few FX houses that are authorised and regulated by the Financial Services Authority (FSA) as well as being registered with HM Customs & Excise. Client funds are deposited directly into a special Segregated Client Account at our clearing bank which means that at no time are they under the control of Voltrex.
We are a registered Money Service Business regulated by Revenue & Customs and have met the stringent financial criterion which were introduced to protect client funds held by authorised intermediaries. We have fully adopted the stringent checking profile outlined in the European Statutory regulations for the prevention of Money Laundering and are in good standing with our regulator
Our main bankers are Lloyds TSB Bank plc, who also provide currency services along with Man Financial, Bank of Ireland and Barclays Bank plc. Corporate FX Ltd maintains accounts in all major currencies, which are designated "transaction account" for the clear purpose of buying and selling currency on behalf of our clients. Corporate FX Ltd maintains totally separate business accounts which determine the complete separation of funds for total propriety.
In summary we are the leading currency specialists in the United Kingdom with substantial growth leading into our 5th year of trading and have achieved this without borrowing or credit lines. When we book a trade on behalf of a client we are immediately at risk with our counterparty and maintain the integrity of funds throughout the transaction.
At Currencies Direct working ethically is one of the core values which underpin our company. Ensuring your money is moved securely and that you are treated fairly, is the fundamental principal of how we do business.
We are regulated by the Financial Services Authority under the Payment Services Regulations 2009, for the provision of payment services. Under the Money Laundering Regulations 2007, commercial foreign exchange companies are treated as "Money Service Businesses" which are covered by regulations administered by HM Revenue & Customs. Activities falling within the scope of the Money Service Business include the operations of bureau de change, transmission of money by any means and the cashing of third party cheques. In addition we subscribe to the Non-Investment Products code created by the Bank of England which regulates companies involved in foreign exchange transactions such as spots and forward contracts.
All client funds are held in segregated accounts with our banking partner, HSBC. Effectively this means that neither the bank nor the creditors of Currencies Direct would have recourse to client monies in the unlikely event of Currencies Direct facing financial difficulties.
Currencies Direct Ltd holds a certificate of registration for Money Laundering Regulation (MLR). Registration number: 12132225.
Currencies Direct Ltd - Authorised and regulated by the Financial Services Authority (FRN No: 504360) for the provision of payment services.
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