FastOne can lend out the money you deposit. Clause 8(b) lets it pledge or invest your property, mixed in with other customers' property. It owes you nothing for any income that money earns.
Why this matters
Your deposit stops being money set aside for you and becomes collateral FastOne can use elsewhere. The contract does not promise the same assets back, only ones of like or equivalent kind.
Exhibit 1Every flagged clause gets its own number so you can point at this one. The number does not change, so a link to it keeps working.CriticalHow much this clause can cost you, in our reading. Critical can take your money or your profit. Warning can delay or limit it. Notice is simply worth knowing before you sign.Rarely seenHow ordinary this wording looks next to the contracts we read. This is our reading of the clause, not a count of other brokers.
Customer hereby grants to FastOne Global Financial Markets Limited the right to pledge, re-pledge, hypothecate, re-hypothecate, or invest, either separately or with the property of other customers, any securities or other properties held by FastOne Global Financial Markets Limited for the accounts of Customer or as collateral therefore
Where it sits: section 11 of 60 in the FastOne Terms & Conditions, near the start.We counted the numbered sections in the FastOne Terms & Conditions. This clause sits in section 11 of 60, about 18% of the way through. A fee written on the first page and the same fee written near the end are not the same disclosure.
Firms licensed by the FCA or CySEC must hold retail client money in segregated bank accounts and must not use it in their own business. Those regimes do not let a firm take a retail client's money as its own collateral. Clause 8(b) claims that right.
FastOne is not licensed by these regulators, so this is a comparison of practice, not a finding of any breach.
Our readingOur own comment on the clause, not the broker's words. Anything we quote is marked as a quotation.Re-pledging a client's assets is a device from prime broking and commercial lending. In a retail trading contract it means the money you believe is sitting in your account can be pledged to somebody else while you look at the balance.
- Worse together with Exhibit 17Read these two clauses together. Each one costs more because the other exists.FastOne can use your assets, and its own disclaimer says no statutory compensation scheme stands behind the company if that goes wrong.