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Learn to trade

Trading

Are my margin FX funds safe with Pepperstone?

Pepperstone
Pepperstone
Trading Guides
23 Aug 2022
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When you make a deposit with a broker, where are your funds held?

You might ask yourself the question ‘where are my margin FX funds held after I make my initial deposit?’ If you trade through a regulated margin FX broker, your funds will be held in a segregated account.  

Why is a segregated account important?

A segregated account is separate from the broker's main bank account(s).

A broker uses its main bank account to run its core business. This is paying its day-to-day expenses like wages, rent and running costs.

Under regulated rules, the company is not allowed to use a client's investment funds as working capital. This results in my margin FX funds being pooled in a segregated account with other clients.

This also results in the client funds being easier to identify should the broker fall into financial difficulties. With an increase in margin FX scams over the last decade, a segregated account is considered critical in deciding which broker to trade through.

Preview

Figure 1 forex trader

Is Pepperstone a regulated broker?

Pepperstone takes their professional standards and the safety of their client’s funds extremely seriously. The company includes regulated entities in various jurisdictions around the world including the Financial Conduct Authority in the UK (FCA), the Australian Securities and Investments Commission (ASIC) in Australia, the Capital Markets Authority in Kenya, the Dubai Financial Services Authority in Dubai and various others.

Pepperstone places clients’ funds across various major banks. These banks are regularly assessed to ensure further safety.

Should the unlikely event of Pepperstone liquidation occur, funds up to an amount of £85,000, may be compensated for under the Financial Services Compensation Scheme (FSCS). The FSCS acts as a ‘safety net’ for clients of FCA regulated firms, such as Pepperstone.

Other regulators have different compensation schemes in the event of financial difficulties.

If you’d like to learn more about Pepperstone, please visit our website.

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

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Risk Warning: Trading CFDs and margin FX is risky. It isn't suitable for everyone and if you are a professional client, you could lose substantially more than your initial investment. You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your personal objectives, financial circumstances, or needs. You should consider whether you’re part of our target market by reviewing our TMD, and read our PDS and other legal documents to ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice if necessary.

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