Investor Account Protection Information
Investor Protection The commodity industry remains one of the most stringently regulated industries in the United States. We will outline some of the protection devices designed for you, the client. You may also contact us to request a copy of “The Story Behind The Financial Integrity of the U.S. Futures Markets”, published by the National Futures Association (NFA). Regulations All futures commission merchants and brokerage houses are regulated by the Commodity Futures Trading Commission and the National Futures Association. Every firm that conducts business with the public as a Futures Commission Merchant must have and maintain sufficient capital to meet its financial obligations to its customers. These requirements are subject to continuous audit and stringent enforcement. Segregated Accounts All customer funds are kept in a customer segregated funds account, which is separate from the bank account of the futures commission merchant and the brokerage firm. Funds can be used only for the purposes the customers intended and can at no time be commingled with the firm’s funds or the funds of the firm’s principals. Compliance is strictly enforced and regulators possess the power to take such immediate action as is considered necessary to protect the security of customers’ money. Under current bankruptcy laws, in the event of a counter-party failure, clients may recover only a pro rata share or none of their assets. Transfer of Market Positions Should a firm be determined to be in a financial situation that could potentially jeopardize the safety of its customers’ funds, it can be directed to immediately cease operations and transfer all open customer positions in the market to a firm, which is financially sound. This is to ensure that adequately margined positions with a troubled firm will not be liquidated at a time when the customer may not wish for them to be liquidated. These and other protective safeguards support the financial integrity of the futures markets. For additional information, please feel free to contact us for your copy of the NFA publication.