The $5.1 trillion foreign exchange marketplace is a great place to be – high liquidity and proﬁt potential that surpass those of other market segments. But being a trader can be risky in a volatile and unpredictable market.
Unfavorable trading conditions can hit you when you least expect it and regulatory requirements may adversely aﬀect your operations. Many traders are unsure where to turn as security and integrity of their deposits has seemingly become a luxury.
Until recently, you may have overlooked the benefits of working with a financial custodian.
What is a Custodian? A custodian is a financial institution that holds customers` financial assets (e.g. money) for safekeeping in order to minimize the risk of their theft or loss.
For brokers, fund managers and individuals seeking deposit protection against the risk of their broker becoming insolvent and only getting back cents on the dollar, we strongly recommend opening a custodial account (through a Tri-Party contract agreement). Essentially, a custodial account is a financial escrow account established in the client’s name and administered by a responsible person or entity, known as a custodian, who has a fiduciary obligation to the beneficiary.
What are the benefits of having a tripartite agreement?
- Safeguarding from unforeseen events – the agreement adds protection to the money of the account holder in the unanticipated event that their broker becomes insolvent.
- Real separation of customers` funds – all client equity is secure and fully segregated at all times in the Client’s name and the client funds are not co-mingled with the broker’s funds or those of any other client. The money is held by an independent custodian company or Bank, who administers the assets for the protection of the client.
- Added service worth – security of funds is a primary concern to clients, especially in light of recent events. More and more clients are choosing to work with the institutions offering the maximum security for the funds on deposit in their accounts such as Custodian accounts, insurance on their deposit, segregation of client funds and others.
Traders and investors can access this type of service by visiting Etana Custody. This financial Service Provider places a strong emphasis on trust and transparency in the broker-trader relationship while fully understanding your trading needs. Etana seeks to resolve pain points experienced by traders, such as:
- Lack of previous experience or knowledge of the new broker you are to trade with.
- No existing feedback/reviews of the broker on the Web.
- The possibility of having your profits withheld.
- The possibility of a broker “going dark” on you.
- The possibility of a brokerage going bankrupt, leading to capital losses.
- Involvement of high risks when sending money overseas to unknown recipients.
- Broker manipulation of trading accounts.
While custodians are nothing new, by entering the retail Forex space, Etana Custody presents a new concept to market participants. Etana anticipates that long-established conflict of interest between traders and brokers will be eliminated by the solutions provided. As an active partner to both the broker and trader, Etana affords traders the comfort of shopping for their broker with more confidence. Custodian services allow all traders (investors) to benefit from:
- Risk protection over unpredictable events
- Actual funds segregation
- Maximum funds security
Traders (end-users) can enjoy the benefit of having their deposits protected by a custodian knowing that their funds are truly segregated. This engenders a level of trust between brokers and traders where there is more accountability and transparency reducing the anxiety that both parties exhibit when it comes to talking about transactions, disbursements and compliance procedures.
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