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The safety of your funds is very important to us. You can be assured that TradeStation does not engage in any proprietary trading. TradeStation Securities and IBFX operate as subsidiaries of our parent company, TradeStation Group, Inc., which in turn is owned by Monex Group, Inc. Monex Group is among Japan's leading financial services companies. Both Monex Group and Monex Securities, its main subsidiary, are subject to stringent oversight by Japanese regulatory authorities. TradeStation is subject to stringent U.S. industry regulations and account-protection requirements and has continuous reporting requirements that are subject to regulatory review and regular audits. These regulatory requirements include reserve and segregation requirements for your equities and futures accounts, as well as reserve requirements for your forex accounts.
Following are our ways of protecting your funds within the TradeStation family of companies:
TradeStation Equity accounts - Held at TradeStation Securities, Inc.
Brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more important, to protect customer assets if they do fail. For example, the SEC's Rule 15c3-1 — the "Net Capital Rule" — requires brokerage firms lo maintain certain levels of their own liquid assets. The minimum net capital a firm must have on hand depends on its size and business. As of June 30, 2013, TradeStation Securities, Inc. had net capital of approximately $53.3 million, which was approximately $50.7 million in excess of its required net capital of approximately $2.6 million.
In addition, the SEC's Rule 15c3-3 — the "Customer Protection Rule" — requires brokerage firms that have custody of customer assets to keep those assets separate from their own accounts. In other words, customers' cash must be placed in a special, separate "reserve" account, and fully paid customer securities must be kept separate from firm and customer margin securities. As of June 30, 2013, TradeStation Securities, Inc. had approximately $1.03 billion of customer funds reserved and segregated in bank accounts clearly identified as customer funds in accordance with Rule 15c3-3. The amount required to be segregated is computed every week and any shortage needs to be deposited before 10:00 a.m. of the following business day. As an additional safety precaution, TradeStation maintains funds in excess of the required amount to be segregated from its own proprietary funds.
Your TradeStation equities accounts are further protected with SIPC insurance. SIPC insures your equities accounts up to $500,000, including $250,000 for cash. Beyond this, TradeStation has arranged for additional protection through Lloyd's of London, insuring all accounts up to an aggregate limit of $300 million. For more information on SIPC coverage, we encourage you to visit the SIPC website.
TradeStation Futures accounts - Held at TradeStation Securities, Inc.
TradeStation Securities Inc., as a Futures Commission Merchant (FCM) that carries customer accounts, is subject to the Customer Protection Rule requirements of the Commodity Futures Trading Commission (CFTC) Rules 1.20 and 30.7. These rules state that the company is required to maintain enough cash and cash equivalents in special reserve accounts, and identified as such, to cover at all times the required segregation reserve amounts. The reserve requirement must be calculated daily and filed electronically through the National Futures Association's (NFA) web-based WinJammer system. Additionally, the company must also properly segregate these funds from any other proprietary bank account of the company. As of June 30, 2013, TradeStation had $425.5 million segregated in accordance with the above CFTC requirements.
TradeStation Forex accounts - Held at IBFX, Inc.
IBFX, Inc. is a member of NFA and registered with CFTC as a Retail Forex Exchange Dealer (RFED). Accordingly, it is subject to CFTC Rule 5.8 that requires all RFEDs to maintain at all times assets solely permissible under CFTC Rule 1.25 equal to or in excess of the total retail forex obligation at one or more qualifying institutions in the United States or money-center countries. Although Rule 1.25 permits various permissible investments, IBFX, Inc. only invests customer funds in U.S. Treasuries and maintains excess liquid funds available to satisfy all forex customer obligations within United States banks. As part of NFA's continuous surveillance, IBFX prepares a daily calculation of the excess amounts held to cover customer obligations, and files them daily through the NFA-based WinJammer system.
TradeStation Forex accounts - Held at IBFX Australia Pty Ltd
IBFX Australia Pty Ltd holds Australian Financial Services License #363972, complies with all relevant sections of the Corporations Act 2001 and is regulated by the Australian Securities and Investments Commission (ASIC). ASIC requires customer funds to be segregated from company funds, and to be held with an Authorised Deposit-Taking Institution, as defined in the Banking Act 1959.
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Call a TradeStation Specialist 800.808.9336
No offer or solicitation to buy or sell securities, securities derivative, futures products or off-exchange foreign currency (forex) transactions of any kind, or any type of trading or investment advice, recommendation or strategy, is made, given or in any manner endorsed by any TradeStation affiliate and the information made available on this Website is not an offer or solicitation of any kind in any jurisdiction where any TradeStation affiliate is not authorized to do business, including but not limited to Japan.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options futures or forex); therefore, you should not invest or risk money that you cannot afford to lose. Options trading is not suitable for all investors. Your account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. Please click here to view the document titled Characteristics and Risks of Standardized Options. Before trading any asset class, customers must read the relevant risk disclosure statements on our Other Information page. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
TradeStation Group, Inc. Affiliates: All proprietary technology in TradeStation is owned by TradeStation Technologies, Inc. Equities, equities options, and commodity futures products and services are offered by TradeStation Securities, Inc. (Member NYSE, FINRA, NFA and SIPC). TradeStation Securities, Inc.’s SIPC coverage is available only for equities and equities options accounts. Forex products and services are offered by the TradeStation Forex divisions of IBFX, Inc. (Member NFA) and IBFX Australia Pty Ltd, ABN 84 142 210 179, holder of AFSL #363972.
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