What does 'segregated' mean?
Client money is held entirely separate from DF Markets' own money, ensuring that in the unlikely event of default by DF Markets, client funds will be returned to the clients rather than being treated as a recoverable asset by general creditors of DF Markets.
The money is 'ring-fenced' in separate bank accounts which are held in trust with the clients as the beneficiaries, and is not held with DF Markets' own funds.
Are my funds held on a segregated basis?
When a client opens an account with DF Markets, they will be categorised as either: a retail client, a professional client or an eligible counterparty - and DF Markets will inform them of this categorisation. All client funds will be segregated in separate accounts with our banks, as per the Financial Conduct Authority (FCA) rules concerning client money.
How are my funds protected with DF Markets?
Funds transferred from an individual client to DF Markets will be received directly into a segregated client bank account.
DF Markets does not pass client money to any part of the business as working capital. DF Markets has no exposure to corporate or sovereign debt. DF Markets is debt-free, with substantial liquidity and capital reserves significantly in excess of regulatory requirements.
What happens if DF Markets goes into liquidation?
In the unlikely event DF Markets goes into liquidation, clients whose funds are held in segregated accounts will have their share of the segregated money pool returned, minus the administrators' costs in handling and distributing these funds.
If there is a shortfall than retail clients will be eligible for compensation from the Financial Services Compensation Scheme.
How does the Financial Services Compensation Scheme work and who is eligible?
DF Markets clients would fall under the 'investments' claim category, whereby the cover is £50,000 per person per firm. If a client held an account with an authorised investment firm and there was a shortfall in segregation, they might still receive up to £50,000 in compensation.
The Financial Services Compensation Scheme (FSCS) is the UK's compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. The FSCS covers business conducted by firms authorised by the FCA.
For further information about the FSCS please visit http://www.fscs.org.uk/
What happens if a bank holding client money on behalf of DF Markets goes into liquidation?
Any losses would be shared by clients in proportion to their share of the total amount held with a bank which has failed. In the UK, any funds lost as a result of this would be covered by the FSCS under the 'banks/building societies' claim category, up to a limit of £75,000 per person per institution.
It is DF Markets' policy that all institutional counterparties holding client money accounts must maintain an investment-grade rating. These counterparties are subject to an ongoing internal credit review process.
What additional safeguards are in place regarding client money?
DF Markets' client money management and compliance with FCA rules are audited annually by our statutory auditors, and then reported to the FCA.
DF Markets is also required to file a monthly Client Money & Assets Return to the FCA,. The purpose of the Return is to ensure that the FCA receives regular and comprehensive information from a firm which is authorised to hold client money on behalf of its clients.