Fractional shares in event of bankrupt

📬 Stocks & ETFs requests
1

I’m aware that when a broker goes bankrupt, you still own the shares regardless, however in the case of fractional shares, if Tradding212 went bankrupt, how would I access my fractional shares?

Thanks!

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2

Anyone shed any light on this for @nfboa?

I’d be interested in a run down of the mechanics of this too.

3

The appointed bankruptcy administrator would sell the whole share and carve up the cash received between the fractional owners less their expenses. The main warning I’ve seen is that whole shares would be relatively quick and easy to allocate as you are the named owner whereas having multiple owners could take a while to unpick.

Depending on the value of the share there might not be much left as liquidators make sure they get paid first.

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4

Thanks!
Would your last para. apply to both whole + fractions?

5

In the unlikely event, compensation is due for the amount equal to the monetary value of the fractional share.

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6

OK Tony - so would you say there’s no more inherent risk in holding fractionals rather than wholes?

7

That’s correct, yes. :ok_hand:

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8

Got it - thanks for clarifying.

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9

Hi @Tony.V,

So, for example, if I hold 1.5 shares from company A, in case of the unlikely event, I would be the owner of 1 share and the remaining (0.5) would have to be compensated equal to the monetary amount?
These compensations would be administered by the Liquidator/Bankruptcy Administrator?
Is this protected by the FSCS (up to £85,000)?

Thanks.

10

Hey @nfboa,

Yes, that’s correct.

Yes, all of your holdings with us are covered by the FSCS - both assets and cash.

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11

Thanks for the clarification @Tony.V