Client money segregation

How your deposit is legally separated from the broker's own working capital.

Client money must be held in segregated accounts at approved credit institutions, separate from the firm's own funds. That single sentence does more work than any amount of marketing language about "regulated and trusted", a phrase which appears on the websites of firms with no UK permissions at all.

The rest of this page is written for the moment it matters: when you are about to deposit, when something has gone wrong, or when a broker's answer does not sound right. Each point below is a rule you can check for yourself against public sources.

Segregation protects your money from the broker's creditors. It does not protect it from the failure of the bank holding it, nor from a shortfall caused by poor record keeping.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

Firms are required to reconcile client money daily. Reconciliation failures are one of the earliest public signals that a broker is in trouble.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

Better brokers name the credit institutions holding client money in their terms. Vaguer disclosure is not automatically a red flag, but specificity is a good sign.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.

Money owed to you on open positions is treated differently from cash on deposit. That distinction becomes important in an insolvency and is worth reading in the terms.

In practice this is where the difference between firms shows up. Two brokers can both be authorised and still handle the same situation very differently, because the rule sets a floor rather than a standard. When we score a firm on regulation and safety, we look at how far above that floor it chooses to operate: how clearly it names its entity, how specific its disclosure is, and how it behaves when a client disputes something.