CLIENT MONEY & HEDGING
As a client of FP Markets, all your client monies are deposited into trust accounts with banks within Australia. We hedge our client trades with one of a number of top tier global liquidity providers, are 100% Australian owned and are regulated by the Australian Securities and Investment Commission (ASIC).
Questions to ask your CFD & Forex Provider
Over-the-counter CFDs and Forex, such as those provided by FP Markets, are not guaranteed by an exchange or clearing house. It is therefore important that you consider your counterparty risk when selecting a CFD & Forex provider. You should consider the risk that a CFD & Forex provider may not have the financial resources to pay you the amounts it owes you.
When selecting a provider, you should ask:
- Are you regulated by ASIC?
- Is the provider entering into unnecessary risk by not hedging your positions?
- Do you hold my funds in a trust account at an Australian bank?
Reducing your counterparty risk
We believe your counterparty risk with FP Markets is low to moderate, as FP Markets is well capitalised, has no debt, does not run proprietary positions and has sophisticated risk management systems that have been tested during extreme market conditions. We hold your funds in trust accounts with banks within Australia.
Our model aligns our interests with our clients and also significantly reduces your counterparty risk with FP Markets.
FP Markets uses client money to hedge positions, which means you have some counterparty risk with the hedging counterparty. To facilitate hedging we engage top tier institutions that are an integral part of financial markets. These hedging positions need to be paid for.
In the past hedging has been facilitated by withdrawing funds from the Client Money Trust Account (s981B Trust Account) to pay FP Markets. A byproduct of this process is that clients become unsecured creditors for the net amount owing (if any) by FP Markets to them. This was done to comply with current law. The shortcomings of current regulatory requirements have recently been highlighted. There is no protection or claim to the funds once they leave the trust account.
About FP Markets
FP Markets Pty Ltd is an Australian owned company. FP Markets has been trading in Australia since 2005 and rapidly became a dominant player in the Direct Market Access (DMA) service. The company strongly believes that such a transparent model is the fairest and provides best value for retail clients. FP Markets is well-resourced, has thousands of clients and offers both the comfort of being an Australian business, yet still provides the benefits of well-resourced global infrastructure so that clients can take advantage of worldwide opportunities.
FP Markets has become one of the most awarded CFD providers in the industry over the years.
For further information about us or how we handle your funds please call us on 1300 376 233.