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CFTC requires that customer funds be segregated, and that
creditors can't look toward those funds.
However, that does not mean the FCM will actually separate
the funds. Over the years FCMs that went belly-up sometimes
were found to have gone through their customer funds.
Best bet is to see if your funds can be kept with a major
institution, with a small FCM as an introducing broker.
----- Original Message -----
From: "TradingSystem.Com" <mike@xxxxxxxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Wednesday, September 05, 2001 10:20 AM
Subject: RE: TSPro littleknowns
> For futures it depends on if TradeStation is an FCM
(Futures Commission
> Merchant). If they are their own FCM then they hold
customer funds. However
> the CFTC requires that the customer accounts are
segregated from the company
> accounts. In other words, if TradeStation were to go Belly
Up, they can't
> even look at customer accounts. The customer accounts are
kept entirely
> separate and creditors can't access them. Also the
Clearing House requires
> heavy margins from the exchange members who are handling
the FCM accounts.
> Also backup margin. It is the law that customer accounts
are serviced first
> and foremost. Customer money is segregated not only at the
FCM level but
> also on down to the members of the exchange.
>
> However, if TradeStation is not the FCM then they are not
allowed to hold
> your trading money. That would be through whomever they
partner with.
>
> Mike.
>
>
> -----Original Message-----
> From: Bob Fulks [mailto:bfulks@xxxxxxxxxxxx]
> Sent: Wednesday, September 05, 2001 7:15 AM
> To: John Lynch
> Cc: James Fulton; Omega List
> Subject: Re: TSPro littleknowns
>
> At 9:09 AM +0100 9/5/01, John Lynch wrote:
>
> >5) Who holds your money when you trade with TSPro (that
is, if they go
> bust
> >do I lose money?)
>
>
> This concerned me also. I found the following on their
website.
>
> Bob Fulks
>
> --------
>
> 7. What account protection does TradeStation Securities
offer?
>
> TradeStation Securities offers the account security you
need -- and
> expect -- from an online brokerage that caters to the
active and
> professional trader. TradeStation Securities is a member
of the
> Securities Investor Protection Corporation (SIPC), which
provides
> protection*** for customer accounts up to $500,000, of
which $100,000
> may be in cash. In addition, TradeStation Securities
clears through
> Bear, Stearns Securities Corporation for all its custody
and clearing
> issues associated with its brokerage transactions. Bear
Stearns has
> obtained an excess securities bond issued by Travelers
Casualty &
> Surety Company that is supplemental to SIPC protection and
provides
> protection up to the amount of the covered account's net
equity in
> excess of the primary SIPC protection. This gives you an
unlimited
> amount of protection for your account.***
>
> 3. How secure are my funds? Who is the Clearing Firm?
>
> Our futures clearing firm is Lind-Waldock. The firm was
founded in
> 1965 and is one of the world's largest futures firms,
maintaining a
> capitalization level that is in excess of the amount
required by
> regulations.
>
>
>
>
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