Generally speaking, fund custody is the cooperation between investment platform manufacturers and third-party payment enterprises. The real "fund custody mode" is that an investor opens an account in a fund custody bank and transfers the funds to the investor account of the fund custody bank through third-party payment. Moreover, when the transaction occurs, the funds directly enter the foreign exchange market for anonymous transactions, without going through the platform vendor, so that the investor's account is truly isolated from the platform.

At this point, we need to be clear that some platforms say "fund custody" and some platforms say "fund depository". Although there is only one word difference, there is still a big difference between the two. ? Under the fund custody mode, the custodian has the obligation to monitor the flow of funds, conduct transactions according to instructions, and issue custody reports regularly to prove that funds have not been misappropriated.

As for the deposit of funds, the depository has no such obligation. The platform only opens accounts with depository institutions, and the funds in the accounts can be controlled by the platform. This will neither isolate funds from the foreign exchange platform nor protect investors.

To give the simplest and most common example, most of the investment platforms that have closed down in the past two years have no "fund custody", which is also the root cause of the frequent incidents of platform running with money. In foreign exchange trading, as long as it is a formal platform, it is fund custody, because this is a prerequisite for him to obtain supervision from NFA, FCA, FSP and Asia.

It is also important to choose powerful banks as custodians. The bigger the bank, the stronger the security of funds. At the same time, the cooperative banks of platform vendors are also the embodiment of platform strength. Top platform vendors will definitely choose top strength banks to cooperate.