Theoretically, itās true, but, as colleagues have already noted, the accounts are separated and if t212 can no longer meet its obligations, it will declare bankruptcy, but the clients will not lose anything. Because t212 cannot use clientsā money or sell client-owned stocks to cover its expenses. T212 keeps the clients money in a bank that can fail, if that amount is more than Ā£85k the client will lose the amount above Ā£85k. Barclays is a big bank, I doubt it will fail.
Everything else (forging clientsā orders and withdrawing their money) is a crime, I doubt anyone wants to go to jail.
I suppose if they told you they were segregated when they werenāt then yes, you would only have 85k compensation. But I would have thought the FCA have access to this information to check that it is being compliant.
Two problems if t212 goes belly up.
The time taken to move your holding to another broker. Someone told me it was nearly 6 months and he could do nothing in that time. In reference to selling buying or cash.
Fraudā¦it happens. Shouldnāt, as your shares should be ring fenced but scumbags could find there way round itā¦a possibility only.
GIA you could simply sell all your holdings and withdraw/deposit elsewhere and buy back. You will lost any gains/losses in the market during that time but it could go in your favour(or not). This should take days.
ISA They only facilitate cash transfers in/out at present. The UK GOV has guidelines on how long these should take so you dont lose any benefits of the ISA wrapper.
Inspecie transfer - these have been tested sporadically but are not yet fully operational. Not sure @JB2 if that is what you are referring to? There is another thread on this with current development on pause.
The person on the internet (so have to take with a pinch of salt) said in effect all his accounts were āgatedā. He could remove nothing from his accounts. He had to wait until they had sorted it and moved his account.
I think JB2 is referring to a situation in which a broker goes bankrupt and the FCA has to intervene and return the assets to each individual investor. It would take some time.
I think that is what he is referring too, indeed.
But I see this question raised many times, how is it that so many people are worried about T212ās possible bankruptcy when the company has no debt?
A good reason why you should āspreadā your assets.
I do the same with banks. You never know when they might have a technical glitch and you need to access cash, but then again with investments you should be willing to let them āsitā unless you are trading.
