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Individual Segregated Account

A segregated account in forex trading is simply a separate account where brokers hold their clients' funds. These separate accounts are different from the broker's core banking account. A segregated account is maintained by the broker so that there is no relationship between the company's capital account and the client's fund account. Segregated accounts are created to give assurance to their clients. It also helps to control the liquidity risk.

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Individual Segregated Account

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  1. The Concept of Forex Segregated Account and Its Ultimate Benefits Have you heard of segregated accounts in forex? A segregated account is an account of a company that is kept separate from the clients’ accounts. This means the company’s money is held in a separate account and the money of the customers is held in a separate account. In forex trading, a brokerage firm usually has an Individual segregated account to keep the funds of the firm separate from clients’ funds. This is done in order to ensure the funds of the clients are stored in a secure manner in an individual account. The company will not touch these funds for their business purposes. The company will use the funds from the segregated account for operational activities. When a customer knows that a forex brokerage firm maintains a segregated account, it will instill confidence in their minds about the firm, as the firm will never interfere with the customers’ funds. Most successful forex brokers maintain a forex segregated account to earn the trust and confidence of the clients. Now, let us look at some of the benefits of having a forex segregated account. BENEFITS OF A FOREX SEGREGATED ACCOUNT Here are some of the benefits or advantages of having a Segregated client account ● Increases the credibility and trustworthiness of a brokerage firm among customers ●Clients get to have better control over their funds, as the company’s operational funds are maintained in a separate account ● Increases transparency of the brokerage firm in the minds of customers ● The trades and businesses of the customers are not exposed to any risks ● The funds of customers are held in a secure and transparent manner without any possible financial threats ● Even if the brokerage firm goes bankrupt (in the worst-case scenario), the money of the customers will be safe ● Eliminates confusion and financial risks for the clients ● Clients can make huge amounts of deposits and withdrawals in a seamless manner When a forex brokerage firm maintains a segregated account, it will portray the firm as a reliable and secure one. This can help the firm attract numerous potential clients. Why are segregated accounts necessary for forex brokers?

  2. A segregated account can help the brokers increase their reliability and credibility. As you know, the forex market is highly unpredictable. Risks and losses are inevitable and prone to occur in unexpected times. A segregated account can help the broker manage market ups and downs in an efficient manner. Even if the market is totally down, the broker can prevent any financial risks to the clients by owning a segregated account. Brokerage firms that maintain segregated accounts will announce to the clients that the firm will return their investments precisely in case of bankruptcy. The bankruptcy will not affect the customers’ funds in any way, as the brokerage firm will not interfere with their funds in the presence of a segregated account. It is therefore a good idea for the traders to opt for a brokerage firm with a segregated account.

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