If you have a trading account with any of our European offices, your account is held with CMC Markets in the UK, and the following may be applicable to you.
CMC Markets is authorised and regulated by the Financial Conduct Authority in the UK (FCA) which means we must comply with FCA client assets regulation, known as CASS.
When you open an account with CMC Markets you are classed as a retail client, unless you receive notification of another status and explicitly consent to ‘title transfer’ of your funds to CMC Markets.
Retail client money is held separately from CMC Markets’ own funds so that under property, trust and insolvency law, client money is protected and therefore unavailable to general creditors of the firm, if the firm fails.
European retail clients’ funds are pooled together and accordingly the treatment of funds across our European branches is the same. We hold retail client funds in segregated bank accounts with UK banks which include Natwest, Barclays, Lloyds and HSBC, and outside the UK with Ulster Bank in Ireland, Deutsche Bank in Germany, and HSBC in Poland and Spain.
This means that your money may not necessarily be held in your country of residence, and that UK rules* will apply to all European client money.
Funds deposited by our European retail clients are held in segregated bank accounts. When funds are segregated, the cash held with a bank does not belong to the firm but to the clients of the firm, and it will be held in a way that enables it to be identified as such, and any charges, liens or rights of set-off or retention over the cash are waived.
CMC Markets performs daily client money reconciliations in accordance with FCA requirements. This process ensures that funds held in segregated bank accounts always accurately reflect retail client assets. The full value of a client trading account is treated as client money. Our two FCA regulated entities, CMC Markets UK Plc and CMC Spreadbet Plc, are required to file individual Client Money Asset Returns (CMAR) on a monthly basis with the regulator.
CMC Markets’ client money controls and processes are audited annually by our statutory auditors (PricewaterhouseCoopers) and the results are reported to the FCA. Internal audits and reviews are also undertaken periodically, which are overseen by independent Non-Executive Directors.
In the event of CMC Markets’ liquidation (known as primary pooling), retail clients would have their share of segregated money returned, minus the administrators’ costs in handling and distributing these funds.
Any shortfall of funds of up to £50,000 may be compensated for, under the Financial Services Compensation Scheme (FSCS).
In the event of a bank liquidation (known as secondary pooling), losses would be shared by clients in proportion to the share of funds held with a bank which has failed.
Funds lost as a result may be compensated for under the FSCS up to a limit of £85,000 per person, per institution, subject to other balances held with the bank in question.
The FSCS is the UK’s compensation fund of last resort and was created on 1 December 2001, when the Financial Services and Markets Act 2000 came into force. The FSCS acts as a 'safety net' for clients of authorised firms (i.e. FCA regulated financial services firms such as CMC Markets).
Using the scheme does not cost you anything, but to qualify for compensation you need to be eligible according to the FSCS rules. Generally, the FSCS covers private individuals, as well as some small businesses.
Further information on the FSCS can be obtained from their website, www.fscs.org.uk or by calling the FSCS Helpline on +44 (0) 20 7741 4100 or 0800 678 1100.
*CMC Markets complies with CASS 7.13.13R (3) (b) as modified under FCA directions 4733528 and 4733534 of 24 August 2017. CMC Markets may use client bank accounts held on terms under which withdrawals are, without exception, prohibited until the expiry of a fixed term or notice period of: (a) a maximum of 30 days for at least 40% of the total client money held by the firm in client bank accounts; and (b) a maximum of 95 days for the remainder of the client money held by the firm in client bank accounts. A longer notice period for withdrawals than standard (30 days) could result in a delay for our clients in having their share of segregated money returned to them in the event of CMC Markets going into liquidation.