Futures customers are still wondering just how their money can stay protected in the case of a default by their broker. While some solutions are still in the concept stage, others are available right now. Horizon Cash Management’s Michael Markowitz explains the third-party custodian model, whereby customers set up and manage excess margin at a bank outside the brokerage firm. Third-party custodial arrangements are available now and could be one way to restore customer confidence.

In this video, a simple animation and interview with Markowitz help explain the third-party custodian model.

Third-Party Custodian Resources

  • Third-Party Custodian on MarketsWiki (link)
  • Michael Markowitz on MarketsWiki (link)
  • Horizon Cash Management on MarketsWiki (link)


About the series: In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back?

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