Regulations: protection of client funds
If your account is held with CMC Markets GmbH, the following is applicable to you.
Client money
Important information:
Retail/private client money, including cash, margin and unrealised gains, is held in segregated accounts with reputable banks and are clearly separated from CMC Markets' own funds.
These banks are regularly reviewed for compliance with our risk management criteria.
CMC Markets uses its own funds to post margin with counterparties that are used for hedging purposes.
As a client, are my funds segregated?
CMC Markets Germany GmbH ("CMC Markets") is a regulated company. This means that we must comply with the regulatory requirements for handling retail client funds.
When you open a trading account with CMC Markets, you will be categorised as a retail/private client. Unless you are informed of a different categorization and explicitly consent to the “title transfer” of your funds, your money is treated as retail/private client money.
Retail/private client money, including cash, margin and unrealised gains, is held separately from CMC Markets' own funds so that retail/private client money is protected and creditors cannot access this money in the event of the company's insolvency.
Where does CMC Markets hold segregated client money?
Client funds are held and consolidated in separate bank accounts at reputable banks.
For client trading accounts held with CMC Markets Germany GmbH, the following bank is used: Barclays Bank Ireland PLC Frankfurt Branch.
This means that your client funds are not necessarily kept in your country of residence.
How does CMC Markets segregate my funds?
Retail/private client money is kept in separate trust accounts. By keeping retail/private client money separate from CMC Markets' own funds, it ensures that retail/private money is not owned and cannot be used by CMC Markets, as it is held on trust for retail/private clients. It is managed in such a way that the funds are recognisable as retail/private client money at any time.
CMC Markets conducts retail/private client money reconciliations daily in accordance with regulatory requirements. The process ensures that retail/private client money held in segregated bank accounts always accurately reflects retail/private client money. The full trading account value of a trading account is treated as retail/private client money.
To ensure the correct handling of client deposits, CMC Markets is audited annually by our external auditors, the result of which is presented to the regulator. In addition, internal audits are conducted by independent non-executive directors.
CMC Markets complies with local client money rules and performs individualised calculations of client deposit on a daily basis.
How is CMC Markets regulated?
CMC Markets Germany GmbH is authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), registration number 154814. This means that CMC Markets complies with the requirements of §84 Wertpapierhandelsgesetz (WpHG), which will be supervised by BaFin.
What happens to my money if CMC Markets goes into liquidation?
In the unlikely event of CMC Markets’ liquidation (known as “primary pooling”), clients would have their share of segregated money returned, minus the administrator's costs in processing and distributing these funds.
If, in the event of insolvency, there is a shortage of client deposits due to a breach of the segregated accounts obligation, the compensation paid to customers by the deposit guarantee schemes is as follows:
The Compensation Scheme of Securities Trading Companies (EdW) compensates investors if CMC Markets Germany GmbH is in financial difficulties and is no longer able to fulfil its obligations for securities transactions concluded with its clients. BaFin determines when this event has occurred and publishes this declaration in the Federal Bulletin.
If the trading account currency is EUR, any compensation from the Compensation Scheme of Securities Trading Companies (EdW) may amount to up to 90% of the claims from transactions (maximum EUR 20,000) per creditor. If USD or CHF has been selected as the trading account currency, the funds are not covered by the EdW.
What happens to my money if a bank holding client money on behalf of CMC Markets goes into liquidation?
In the event of a bank liquidation (known as secondary pooling), any losses incurred would be shared among clients in proportion to the share of funds held with the bank which has failed.
Customer deposits are held with banks that cover funds under the Deposit Protection Act up to a maximum of EUR 100,000 or the equivalent in foreign currency per person per institution, depending on the level of protection offered by the bank. You may be entitled to a higher amount of compensation under other voluntary deposit protection funds.