I am mainly concerned with EU regulations, but I assume others would have some interests relating to the situation in the US.

Are retail forex trading accounts like those offered by FXCM or GAIN Capital (forex.com) protected by deposit guarantee schemes? Does it matter in what EU country you are located? My current location is Sweden.

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    The easiest way would probably to ask the relevant banks under which DGS they fall, and then check with their regulator if they indeed do. Not a bank? Then they won't fall under a DGS. But note that there are financial institutes with a banking license which don't style themselves as banks in the traditional sense; they could still fall under a DGS. – MSalters Oct 25 '17 at 7:26
  • @MSalters: I asked forex.com. They claim "client money remains segregated from the assets of the bank" and "Clients may also be eligible for the Financial Services Compensation Scheme, which offers cover up to £50,000 in the event a firm becomes insolvent or ceases trading." The 'may' part is a little bit annoying, since it does not imply I am covered with 100% certainty 100% of the amount (up to 50,000 pound). – Christ Dher Oct 25 '17 at 10:31
  • Sounds like they're British, but according to the Bank of England (in its role as Prudential Regulation Authority) does not acknowledge an entity named "forex.com" or "GAIN Capital". Besides, a European DGS has to cover at least 100.000 euro, which is closer to 80.000 pound. But TBH, if you're gambling on Forex, insolvency doesn't sound like a major risk to me. It's just one of the many, many reasons that may wipe out your balance. – MSalters Oct 25 '17 at 10:40
  • @MSalters: I am not really gambling. I just want to keep reserves in several currencies for payments and bills that are in several currencies. It's a way of ensuring I won't get exposed to currency fluctuations. So it has to be really safe. – Christ Dher Oct 25 '17 at 10:45
  • How to do that is a valid question by itself, but not the one you asked here. By far the easiest solution would be to keep an account at an ordinary bank, denominated in the currency you want to keep. The 100.000 euro guarantee also covers non-euro accounts. As an alternative, you may be able to buy government bonds. They're almost as liquid as cash, but the key difference is that your counterparty is the issuing country, even when the bonds are deposited at a retail bank. (I.e. you own the bonds, not the bank, so an insolvency of the bank does not affect them) – MSalters Oct 25 '17 at 10:52

The deposit guarantee protect certain types of accounts at certain financial institutions. The details vary depending on where the bank (or financial institution) is incorporated. Your best bet is to contact the relevant authorities to find out if the corporation is covered. If you want to read a bit more check here (in Swedish). https://sv.wikipedia.org/wiki/Insättningsgaranti

In Sweden it is Finansinspektionen http://www.fi.se. that handles Swedish banks and institutions listed in Sweden (which neither FXCM or GAIN are).

But it might be much easier. Wikipedia may be a start:

https://en.wikipedia.org/wiki/FXCM "FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker, now run from London after being banned from United States markets for defrauding its customers."

So, I would not put my money there.

https://en.wikipedia.org/wiki/GAIN_Capital Perhaps better, but I would not bet on them either.

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Under CASS regulatory rule book which adjudicates how client funds in financial institutions should be treated, your funds are segregated from platform assets and therefore, those client funds cannot be used to reimburse creditors in the unlikely event of insolvency.

In the event of insolvency, and FXCM (for example) cannot satisfy repayment claims, you are eligible for compensation as per FCA regulations up to and including £50'000.

I am, however, not sure whether this applies to a "spread betting" Forex account (such am account exempts you from income and capital gains tax obligations). I would think such regulations pertain, but this is something you will need to ascertain for certainty from the FCA, whos number you can glean from Google.

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