Lord Prime's own funds page says it takes responsibility for keeping your account out of negative levels. Clause 4.14 of the Client Agreement says the opposite: if you owe more than your balance, you must pay it within two business days.
Negative balance protection is a limit that stops you owing more than you put in. Without it, one fast market move can leave you owing the broker money on top of your deposit.
Why this matters
A fast market move can leave you owing Lord Prime more than you ever deposited. The website tells you that cannot happen. The contract you signed gives you two business days to send the money.
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.Harder than usualHow ordinary this wording looks next to the contracts we read. This is our reading of the clause, not a count of other brokers.2 working daysThe figure this clause puts a number on, taken from the broker's own words.
If the Client has to pay the Company an amount exceeding the balance of his account, such amount must be paid within 2 (two) business days from the date of occurrence of the Client's obligation.
What it costsThe same clause worked out on a round number, so you can see it in money or in days. It is an example, not a quotation.A $1,000 account that closes at minus $400 leaves you owing $400. The website says your account is protected from falling into negative levels.
Firms licensed by the FCA, CySEC or under ESMA rules must give retail clients negative balance protection, so a retail loss cannot exceed the money in the account. This contract makes the shortfall a debt you owe within two business days.
LORD PRIME 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.Advertising negative balance protection while the contract creates a debt for the same event is the gap, not the clause itself.
- Worse together with Exhibit 2Read these two clauses together. Each one costs more because the other exists.If you do not pay the debt, the next clause lets Lord Prime take it from another account without asking you.