Ring-Fenced ‘Custodial’ Client Asset Accounts

Ring-Fenced ‘Custodial’ Client Asset Accounts, supported by Danske Bank

Ava Trade EU Limited (AvaTrade) offers enhanced protection of client funds using Ring-Fenced ‘Custodial’ Client Asset Accounts – to which AvaTrade has no access. The deposits of all AvaTrade’s European clients are held entirely separate from AvaTrade’s other assets, in secure, ring-fenced ‘custodial’ accounts with Danske Bank, an ‘A’ rated leading European financial institution - giving clients an additional level of security over the funds deposited with AvaTrade.

How Does A Ring-fenced ‘Custodial’ Account Protect Client Money?

Under a ring-fenced ‘custodial’ account arrangement, AvaTrade has no direct access to the client funds. Danske Bank reconciles the account and has sole authority to transfer funds. This is in addition to the complete segregation from AvaTrade’s other assets which ensures that the funds cannot ever be used for any purpose other than as client funds.

How Do These Ring Fenced ‘Custodial’ Accounts Differ From Standard Segregated Accounts Under Mifid?

FX/CFD brokers under MiFID are required to hold client funds in segregated accounts to prevent the brokers’ own funds from being mixed with client money. However brokers still maintain full access to their client fund accounts. With a ring-fenced ‘custodial’ account the broker (AvaTrade) cannot access client funds.

Does This Make It Harder For Clients To Withdraw Funds From Trading Accounts?

Withdrawing funds from a trading account is in no way affected by the extra protection afforded by the ring-fenced accounts.

What Will Happen To Funds In A Client Trading Account If Avatrade Goes Out Of Business?

In the unlikely event that AvaTrade was to file for bankruptcy, client trading funds would not be affected as they are protected under the ring-fenced ‘custodial’ account arrangement with Danske Bank and held separately from Ava’s assets.

What Else Does Avatrade Do To Protect My Funds?

Holding your funds in ring-fenced ‘custodial’ accounts is one of just many measures AvaTrade takes to ensure the security and safety of your trading experience. For more information, check out our Safety of Funds page.