Do Traders have the right to know Brokers Liquidity provider?

Some 16 months back when I was registering using MIGFX, they told me Credit Suise is their Liquidity Provider. A few weeks before, another broker proudly told me that they're utilizing UBS because their Liquidity provider and they added that it is our (traders) directly to understand this. Perhaps it is merely a sales pitch or reality.



Most, if not all, BucketShops would refuse to tell who are their Liquidity suppliers (or where they unload our positions) asserting it is CONFIDENTIAL info.

Confidential vs Transparency.

Is there actually anything confidential with this bit of advice? Or is this Confidentiality only an overused excuse for hiding they dont have liquidity suppliers at all?

Do brokers have any advantage whatsoever in maintaining this information secret from the other brokers? Inside my view/opinion, Liquidity Providers love to get more traders and the more traders they have the greater the spreads will be. Why do brokers refuse to do so?

Not only do we as Currency Market traders never have the right to understand a broker's liquidity partners, we actually don't have any rights at all. This is essential to comprehend when dealing in an unregulated environment.

The only recourse we have as Currency Market traders is that our brokers can't outright steal money from our accounts (though even that has been known to take place, i.e. Refco).

I am not surprised that coping desks don't disclose liquidity providers (nor would I be surprised if some coping desks did not even have a single liquidity supplier ). It is hard to fault themsince even certain ECNs do not publicly disclose that their liquidity providers are. Unless there is some competitive edge in not disclosing them which I am unaware of, I can only conjecture that the banks prefer anonymity. Since interbank traders typically er only to other institutions, it is understandable that they wouldn't want JoeSchmoForex Broker marketing their namesake as their liq. Supplier (and therefore maybe included in their business arrangements an anonymity clause).

I believe you are both right.

Disclosure of Liquidity Providers is an arrangement between Broker and the Liquidity Provider. When there is arrangement of anonymity, subsequently Broker isn't permitted to tell us, PERIOD. When we traders dont enjoy this anonymity, then we simply escape, plain and simple.

What bothers me is that, this ANONYMITY is being mistreated by brokers without Liquidity Providers! And from the time broker goes awry, investigation is too late.

Does it really matter to whom the order is given up! Unless you are a professional, hedge fund, pension fund or bank there's little the suppliers identity will afect your trading.

It does give a vote of confidence however any broker which has decent volume and may manage the collateral will utilize a PB. E.g. rabobbank enables u to get set up for as little as 500k collateral - but they do have many restrictions esepcially for holding weekend positions

They just *haveto do what was agreed upon from the documents you signed when you opened the account, and it is generally not much. OTOH, they might not even be permitted to let you know, based upon the paperwork between the broker and the bank. I could see how banks dont want to place their names on the line with any retail fx operation in any way, aside from their own(reputational risk needs to be managed too). If you email UBS or even C.S. with your chat logs and ask for verifiion, your brokers may even get an angry phonecall, regardless if they have a connection with them or not. Im sure they arent very keen on brokers advertisements with their good name.

I've been in the situation where transactions are reversed because the liqidity supplier resisted them far to frequently this un appointed provider can be used as the cop out. The only real reason I can think of is whether they are a bucket store, or perhaps a white tag of another broker and dont want it out there They are a white tag