Safety of client funds in spreadbetting accounts

[ganndalf]

http://www.cmcmarkets.co.uk/en/content/legal/compensation_scheme.html

I have some funds deposited with CMC Markets spreadbetting. The above link seems to state that up to 30 thousand pounds are 100% protected by the FSA, and of the next 20 thousand pounds the FSA guarantees 90%. So, if you have 50 thousand pounds with CMC and they went bust you'd get 48 thousand of your 50 thousand back. Can anyone confirm that this is correct?

From watching the news, I've seen that high street bank account deposits have been guaranteed up to 50 thousand pounds by the government. I think that these guarantees are provided via the FSA. So for another question: Are client funds with CMC spreadbet just as "safe" as with a high street bank? (as long as they don't exceed the protection limits?).

 

[si1503]

Yes and yes.

 

[ganndalf]

Thanks. The first line from the link above is made ambiguous by the use of the word "may"

"As a client of CMC Markets, you MAY benefit from the protection offered by the Financial Services Compensation Scheme ("FSCS") in the UK, in the event that CMC Markets become insolvent or cease trading."

 

[shadowninja]

Why not ask them under what conditions would you not benefit. They might say if you're a company.

 

[foredog]

You need to check if your money is held as client funds. I believe that if you're classified as a private individual then you're covered, if you're classed as professional the you may not.

 

[nikke]

You need to check if your money is held as client funds. I believe that if you're classified as a private individual then you're covered, if you're classed as professional the you may not.

I have a company account with them but classified as non-pro and they said I am covered.

However currently I cannot login to the account, I hope this does not indicate something is wrong..

 

[ganndalf]

Thanks guys. I think I'll ring them tonight and confirm that I'm classified as a "private individual". But if push came to shove, some written confirmation of my private status and hence eligibility for protection via the fsa might be very useful. I think that confirmation from the FSA would be the most useful.

 

[nikke]

Hi,

I emailed fsa but no reply, so i am only relying on cmc's statement. And I am their customer in sweden so i am not so confident on that.
If you get some confirmation one way or other, can you please post it here.

-n

Thanks guys. I think I'll ring them tonight and confirm that I'm classified as a "private individual". But if push came to shove, some written confirmation of my private status and hence eligibility for protection via the fsa might be very useful. I think that confirmation from the FSA would be the most useful.

 

[ganndalf]

Ok, just had a fairly confusing phone dialogue with CMC. Apparently, if you're a spreadbet client, (not CFD), then it makes no difference to how your funds are treated whether you are classified as a retail or non-retail client. You are protected for £48k in the manner described in the posts above, either way. They also told me that all spreadbet funds are held in "segregated" bank accounts with Natwest.
So it seems I'm covered, I'm 99% sure.