How do segregated client accounts protect CFD traders?
How this answer was verified
- Cross-checked against broker-published fact sheets, regulator licensing databases, and ESMA product intervention notices.
- Reviewed by the FX-Brokers Asia editorial desk (Markets, Platforms, Regulation). Desk structure disclosed at /about/editorial-desks.
- Refreshed quarterly. The most recent verification date is shown above. Read our methodology.
Related
FSCS vs ICF — what compensation do EU and UK forex traders get?
UK clients of FCA-regulated brokers are covered by FSCS up to £85,000 per person, per institution. EU clients of CySEC-regulated brokers are covered by ICF (Investor Compensation Fund) up to EUR 20,000. Both schemes pay out only if the broker becomes insolvent — not on trading losses.
What is negative balance protection and do all EU brokers offer it?
Negative balance protection guarantees that retail forex traders cannot lose more money than they deposit. ESMA rules make it mandatory for all EU-regulated brokers serving retail clients. This means extreme market events like the 2015 Swiss franc shock cannot leave you owing money to your broker.
FSCS vs ICF vs SIPC — how do broker compensation schemes compare?
FSCS (UK) covers up to GBP 85,000 per client. ICF (Cyprus + most EU) covers up to EUR 20,000. SIPC (US) covers up to USD 500,000 per client (USD 250,000 of which can be cash). FSCS and SIPC are the strongest; ICF is meaningful but lower. Most retail FX traders never need to claim — the scheme is insolvency insurance.
EU-regulated vs offshore forex broker — which should I use?
EU-regulated brokers (CySEC, BaFin, FCA) offer ICF/FSCS compensation up to EUR 20,000-85,000, mandatory negative balance protection, and 30:1 max leverage. Offshore brokers (FSC Belize, IFSC, VFSC) offer higher leverage (500:1+) and looser margin rules but no compensation scheme and weaker investor protection. EU is safer; offshore is for high-risk-tolerance traders only.
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