“The Forum’s Client Money Standard prevents member firms from using client funds for any reason, thereby offering the client the highest level of protection. To my knowledge this standard is the safest client money protection model that is available anywhere,” said Andrew Merry, Managing Director, Capital CFDs. 

“After the collapse of MF Global  any financial industry participants dealing with the public must have excellent safety settings in place for their money and, furthermore, be able to show that this process is transparent to the investor,” said Mr Merry. 

Under current legislation a provider is able to use client money to fund the operational costs of the business which is clearly not in the best interest of the client. The recent failings of MF Global and Sonray Capital have highlighted the lack of protection that the Corporations Act affords to client money. 

A key standard of the Australian CFD Forum prevents a member firm from using client money, whether it be cash or unrealised profit, for hedging or any other reason.

“To participate in the CFD Forum each member firm must comply with each of the 16 standards without exception. This provides transparency to investors and assurance that the members firms are following best practice across the board,” said Mr Merry.

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