Yes you are right.
I asked the question to the IB on what happened if the IB is bankrupted. In fact it doesn't have an effect because when you open your account you open it at the FCM (even if it is through the IB), so the money it kept by the FCM. It is pretty clear I think in the contract they ask you to sign when you open an account but I don't have any article on that.

Thanks jlpi,
I will read the small characters on the back very carefully this time.
JP

Did you check page 7 of the account opening form? (bankruptcy protection)

http://www.fxlq.com/docs/fxlq_ind.pdf


With FSA regulated brokers this can not happen

__________________
Take care,
Sulz.

Can you recommend a good FSA regulated broker offering MT4.
I know that Alpari's UK is not one because they make you sign a paper that you are an advanced trader and then the "segregated accounts" will not apply.

His bankruptcy protection mean "We are a casino broker, we rarely hedge your transactions on the real market, we don't trade at the exchanges an if we go under, we will not pay anything to you like Refco did"

Unfortunately this is common to almost all MT4 brokers, that's why the NFA is raising the minimal capital requirement and sooner or later a official exchange for spot forex can will be implemented, unfortunately this action will increment the transaction cost and this can't be regulated outside of USA, making USA brokers not competitive against international others, anyway I prefer paid a higher transaction cost and keep the money safe if we talk about big funds.

__________________
I have not failed. I've just found 10,000 ways that won't work.
Thomas Alva Edison

It all depends how you are classified as a customer. Same situation with ODLS. As a mt4 user you are classified as an 'intermediate customer', and have to sign you agree with their terms "... as a consequence of this categorisation, certain protections afforded to private customers under the rules of the FSA will not apply to you..."

Put 50k on the table and open currenex platform or Hotspotfxi platform and you are a 'private customer', protected by FSA rules.

__________________
Take care,
Sulz.

OK, so we are still in a configuration MT4 = no protection

So traders be carefull :
Forex Liquidity, LLC is registered with the CFTC and is a Member of the NFA (Member ID: 0362216) BUT THIS MEENS NOT A LOT, BECAUSE:
I read page 7, thanks once more delsule, and I was astonished about what I read. (at least they where so honest to write it bluntly in their contract). I found it so important that everybody knows this, that I will copy it here under: basicly it meens: If we go bust you get nothing!

BANKRUPTCY PROTECTION
The transactions you are entering into with FXLQ are not traded on an exchange. Therefore, under
the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to
margin or guarantee exchange-traded futures and options contracts, which receive a priority in
bankruptcy. Since that same priority has not been given to funds used for off-exchange forex
trading, if FXLQ becomes insolvent and you have a claim for amounts deposited or profits earned
on transactions with FXLQ, your claim may not receive a priority. Without a priority, you are a
general creditor and your claim will be paid, along with the claims of other general creditors, from
any monies still available after priority claims are paid. Even customer funds that FXLQ keeps
separate from its own operating funds may not be safe from the claims of other general and priority
creditors.

But this is the case for all USA Forex brokers ... so what now ? First conclusion: never put big amounts on a small broker. Any broker on which you trade FOREX, because FOREX is never traded on an exchange.