The haircut on Cypriot deposits-Is your money safe with your broker ?
is your money safe with your broker
tradertop:
I found a news that most Cyprus brokers don't have their funds in Cyprus but on other banks. Is that true?
I found a news that most Cyprus brokers don't have their funds in Cyprus but on other banks. Is that true?
This should be true,at least for the bigger firms.
This of course depends from broker to broker.
The reason so many brokers are in Cyprus is due to its low corporate tax. That would imply that they are owned by non-cypriots (besides a few) and hence less likely to trust a Cypriot bank.
Don't know what the case is for smaller firms
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The Eurozone finance ministers have decided and agreed as part of the bailout measures for Cyprus a haircut of 10% on all depositors funds (6.7% for deposits under 100k). This essentially means that savers will lose 10% of their savings that are deposited in any Cypriot banks.
HOW DOES THIS AFFECT YOU AS A TRADER
A lot of FX Brokers maintain offices in Cyprus ,due to its low tax rate.
Does your broker maintain funds in Cyprus banks that may affect you?
More about this here