Foreign Exchange Trading | Spot Price Executions | White Label

Hotspot FXr customer funds are held at a major money center bank. In addition, Hotspot FXr has insured customer accounts using a Fidelity 14 Bond.

The fidelity portion of the bond is the most important feature. It covers loss caused by dishonest or fraudulent acts committed by employees. The dishonest or fraudulent acts must be committed with the manifest intent to (a) cause the insured to sustain loss and (b) to obtain improper financial benefit for the employee. The bond extends to include loss caused by dishonest employees engaged in trading activity.

Another feature of the fidelity bond is the 'Computer Systems Insuring Agreement', which covers loss resulting from the introduction of false data or programs into a computer system used by the insured. Since the fidelity portion of the bond covers dishonest acts by employees, this portion of the bond is directed toward acts of non-employees (hackers) who may gain access to the system. Coverage would include inappropriate wire transfer.

The 'Forgery or Alteration Agreement' covers loss resulting from forgery of a signature or alteration involving most types of negotiable instruments. Also, losses resulting from written instructions directed towards the insured that have been altered, or bear a false signature, are covered.

The transactions you are entering into with Hotspot FXr are not traded on an exchange. Therefore, under the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy. Since that same priority has not been given to funds used for off-exchange forex trading, if Hotspot FXr becomes insolvent and you have a claim for amounts deposited or profits earned on transactions with Hotspot FXr, your claim may not receive a priority. Without a priority, you are a general creditor and your claim will be paid, along with the claims of other general creditors, from any monies still available after priority claims are paid. Even customer funds that Hotspot FXr keeps separate from its own operating funds may not be safe from the claims of other general and priority creditors.