Let’s look at some Terms & Conditions in order to understand in practical terms.
In order to speed up and simplify the analysis, copy and paste the Terms in MS Word, and look for the keywords “withdraw” and “bonus”, and you will find the most delicate and important sections for you.
But first let’s look at how to understand the location of the legal office and the competent jurisdiction.
Broker’s legal head office
If you want to know where the legal westernbranchchiropractor office of the broker is located, not always the address indicated in the “contacts” section is the legal address, because for marketing purposes the address mentioned could be the one of the call center or, even more frequently, only the phone numbers, email addresses, IM and online chat tools are shown. In order to know without doubt the legal jurisdiction of the broker (and of the disputes arising between the broker and the customers), you have to look in the Terms & Conditions, and see if within the first clauses the corporate name and the address of the broker are published; if in the Terms & Conditions this information is not given, then it is necessary to look at the end of Terms & Conditions and find at least the legal jurisdiction competent in case of legal disputes arising between the broker and the customers: you won’t know the precise address but at least the country where the broker is located.
Here are a couple of examples.
In the first, the Terms & Conditions of the broker indicate precisely corporate name (that we have hidden) and legal address.
“1. This Agreement is entered into by [broker name] registered under the laws of _The British Virgin Islands having its registered office at [broker’s address] (hereinafter referred to as: the “Company”) and yourself (hereinafter referred to as: “you” or “Customer”) (In this Agreement the Company and you may be referred to collectively as the: “Parties”).”
In the second, only the jurisdiction competent for legal disputes is indicated (Cyprus), which means that the broker is legally located in Cyprus.
12 Law and Jurisdiction
Now let’s proceed with the two most delicate point of the Terms & Conditions: the withdrawal process and the restrictions attached to the bonus.
With “withdraw” you will get also “withdrawal”, “withdrawing” etc. In these sections you will find the conditions of the withdrawal procedure: documents to be submitted, data verification process by the broker for security purposes, number of days the broker reserves for the whole process, the ways and the fees of the money transfer from the broker to the credit card or the bank account of the trader. It is important to know that the data and personal documents controls are necessary for the anti-laundering laws, and that for the same reasons the broker will transfer to the credit card, from which the first deposit originated, an amount not higher that the deposits and will transfer the excess amount to the bank account of the trader. All this means that the broker must accurately control the trader identity and the bank account to be credited. Usually, from these sections you can see brokers who want a fair number of days to perform the security controls and brokers who take advantage of the need to control the data and require up to 15 to 20 days before transferring the money. Also the withdrawal fees differ a lot among brokers, and also this must be taken into consideration in selecting the broker.
The sections concerning the “bonus” keyword are even more important, because they list the conditions and the contractual limits binding the customers when they accept the bonuses.
“8 SPECIAL OFFERS, BENEFITS AND BONUSES
8.2 Unless stated otherwise in the terms of the offer, a precondition for making withdrawals after using the bonus/benefit is to buy options of 15 times the amount of the bonus/benefit.
8.4 The bonuses/benefits must be used within the period defined in the details of the special offer. Should the bonus/benefit fail to be used within this time frame, the bonus/benefit will be withdrawn from the client’s account.
8.5 Once receiving the bonuses/benefits, the client has 3 (three) calendar months to complete the total amount of investments required as a precondition for withdrawal. If the required total amount of investments is not reached during this time period, the company will withdraw the bonuses/benefits funds from the client’s account according to its discretion.”
Under these conditions, in the presence of a bonus, if the value of the transactions do not reach 15 times the value of the bonus within 3 calendar month, only the bonus value is at risk and can be canceled by the broker from the account, but the investor is free to withdraw the available money on the account; clearly he will not be able to withdraw the value of the bonus, or part of it.
“Special Offers, Benefits & Bonuses
PLEASE READ ALL TERMS & CONDITIONS BELOW BEFORE ACCEPTING A BONUS. YOU ARE NOT REQUIRED TO ACCEPT A BONUS. A TRADING BONUS IS OPTIONAL FOR ALL ACCOUNT HOLDERS. EVERY BONUS REQUIRES A TRADING TURNOVER BEFORE ANY WITHDRAWAL IS MADE BY THE ACCOUNT HOLDER. BY ACCEPTING A BONUS YOU ARE AGREEING TO THE TERMS AND CONDITIONS BELOW. ALL BONUS INSERTIONS ARE FINAL.
Special Offers, Trade Refunds, Benefits and Bonuses
Please read carefully before accepting a special offer, trade refund, benefit, or bonus.
2. Unless stated otherwise in writing from [broker name] and only [broker name], the terms of the offer, a precondition for making withdrawals after using the bonus/benefit is to buy options of 20 times the amount of the bonus/benefit plus the deposit amount. Example: (deposit + bonus x 20 = required turnover for withdrawal)
4. The bonuses/benefits must be used within the period defined in the details of the special offer. Should the bonus/benefit fail to be used within this time frame, the bonus/benefit will be withdrawn from the client’s account.
By accepting a bonus into your account, you are agreeing to the terms and conditions above. NOTE: If the required turnover is not met when making a withdrawal request – the withdrawal request will be automatically canceled. NOTE: [Broker name] DOES NOT RECOMMEND TAKING A BONUS UNLESS YOU KNOW HOW MAKE IT WORK IN YOUR ADVANTAGE AS LEVERAGE. BY ACCEPTING A BONUS YOU ARE AGREEING TO THE ABOVE TERMS.
Dormant Accounts Procedure
1. [broker name] client accounts in which there have been no transactions (trading / withdrawals / deposits), for a set period of 12 months, will be considered by [broker name] as being dormant accounts. 2. Dormant accounts will be charged an annual maintenance fee of US$25 or the full amount of the free balance in the account if the free balance is less than US$25. There will be no charge if the free balance is zero. Consequently, all accounts with a zero free balance will be closed.”
Before making a withdrawal in the presence of a bonus, there must be a number of trades for a value of 20 times the value of the bonus plus the deposit, which means:
Required transactions value = (deposit) + (bonus x 20).
The broker can also set deadline within which these transactions must be performed, otherwise the bonus can be canceled.
There is no limitation in the absence of a bonus: this might be an obvious assertion but there are certain brokers which impose a minimum value of trades also with no bonus given to the trader before the he/she can withdraw, even partially, his/her money (case 7).
The accounts inactive for 12 months are charged $25 or, if the balance is less than $25, an amount equal to the balance, therefore in this last case set to zero and then canceled.
Bonuses are only available for withdrawal after trading X times the volume of the bonus value.
For example if a bonus of 100$ is granted, the trader must complete a total trading volume of x times 100$ before the bonus is available for withdrawal (subject to account balance).
In the event that the entire or part of the deposit on which the bonus is given is withdrawn before X times the bonus has been traded, then the following shall apply:
1. The bonus shall be canceled.
2. In the case of trading losses, all the trading losses will be deducted from the original deposit and the remaining balance may be withdrawn.
3. In the case of profits, the trading profits shall be canceled and the original deposit may be withdrawn.”
If the trader receives a bonus, the minimum turnover in transactions required is equal to “X” times the value of the bonus before the investor is able to make any kind of withdrawal from his account, even out of the original deposit. The multiplier is not specified in the general Terms & Conditions, but it is set for each specific bonus. If the trader would like to withdraw even partially from the account after having received the bonus and before reaching the minimum required value of transactions, the bonus is canceled together with the profits generated while the bonus present on the account; the losses instead remain and charged to the account and the trader can only withdraw the original deposit less the losses incurred; in the best scenario then, the trader will withdraw no more than the original deposit.