Posted 05 September 2011 - 04:07 PM
From the Selftrade website:
Client Money and investments
As an execution-only broker, we take instructions on behalf of our clients or their representatives and place these in the market place. Sales can only be undertaken on stock deposited in our registered nominee account.
Selftrade does not:
Engage in stock lending
Buy or sell investments for its own benefit
Provide any credit facilities to customers.
Selftrade is a profitable business, there are no borrowings and it has established a proven business model.
A key component of our income is generated from our customers' trading activity. We have a significant client base which provides protection from low trading periods. An extremely small percentage of our income is dependent on the value of our customers' invested assets.
The security of our clients' assets is paramount to Selftrade: as a result the company is managed conservatively. As part of the Société Générale and Boursorama group we have strong internal controls and audit procedures
The following provides details of how your cash and assets are held, in addition to protections available to private investors together with links to appropriate sites where additional information can be obtained.
When we receive money from any person in connection with your Dealing Account we will hold it as "client money".
Cash held as 'client money' is held in accordance with the FSA rules on Client Money, which requires us to hold it in one or more client bank account(s), segregating your funds from ours with banks that are regulated by the FSA or other European regulators. This money is held on deposit in trust accounts, so that any creditors would have no legal right to it. We cannot use any of this money to cover the company's obligations.
Client money is placed in a pooled client deposit account.
Our policy is to spread client money between different institutions so as to balance risks. We currently place client money with approved UK or European banks, including Boursorama or Société Générale or any other European bank. Our policy is continually reviewed internally by the Selftrade board, and is subject to wider policies within Boursorama and Société Générale. A copy of the list of approved banks is available on request.
When you hold stock with us, we hold that stock in a pooled account with Equiniti Financial Services Limited, which holds them through its nominees LR Nominees Limited, or with Cofunds Limited, which holds them through its nominees Cofunds Nominees Limited. Equiniti Financial Services Limited and Cofunds Limited are regulated by the FSA (FSA Register number 468631 for Equiniti Financial Services Limited and FSA register number 194734 for Cofunds Limited). You hold your stock with us in an account with us designated in your name.
Please note, as indicated in the section on Risk Warnings, that your investments will be held by the nominee in a pooled account together with those of our other clients. Therefore, the investments will not be distinguishable by client/beneficial owner, the type of account within which they were purchased or to which they were transferred or the country of residence of the beneficial owner.
3. Compensation Agreements
The Financial Services Compensation Scheme
As a firm authorised in the UK by the Financial Services Authority, eligible investors may be covered by the provisions of the Financial Services Compensation Scheme (FSCS) if Selftrade or a relevant bank (see below) is declared in default.
Deposits: Under the FSCS, in the event that a bank covered by the FSCS in which we hold your money (a ‘relevant bank’) is declared in default, each individual is entitled to up to £85,000 in compensation for losses across all of their deposits with that relevant bank. The £85,000 limit is the sterling equivalent of Euro 100,000; this limit was increased from £50,000 - effective from 31st December 2010.
For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the bank, including their share of any joint account, and not to each separate account.
Our current policy is to spread cash deposits between various European institutions (both UK and Non UK banks). UK banks will be covered by the FSCS; the other European banks will not be covered by the FSCS but are subject to the compensation schemes in their home state in accordance with the Euro 100,000 limit, which applies across the European Economic Area (EEA).
Our policy therefore offers protection with each of the relevant banks, subject to any deposits you may also have with those relevant banks.
Investments: are protected to a limit of £50,000 against default by an authorised firm (like Selftrade) declared in default.
Imagine a society that recognizes for the first time its need for a universal medium of exchange.
Someone offers to run this new system, on condition that he alone issues the necessary tokens of exchange. He proposes to lend out the tokens for everyone else to use to conduct their business, but only if they pay him interest for this use.
Would you support his proposal or would you think he was trying to scam you? Why would you think that his tokens were better than anyone else's?
Should the medium of exchange be issued collectively and debt-free as a utility for productive enterprise and trade, or should it be lent into existence at interest by a privileged but essentially unproductive minority, as a cost to and as a drag on everyone else?