Legal structure and Account Safety

I read that Trading 212 UK Ltd. is registered in the UK and is authorized by FCA. Another entity, Trading 212 Ltd., is registered in Bulgaria and authorized by the Financial Supervision Commission. All clients’ funds are kept separately in segregated bank accounts and are covered by FSCS.

Can you please explain the role of both entities (Trading 212 UK Ltd. and Trading 212 Ltd.)? Do you assign each entity to a different set of customers, or you assign each entity to a different set of products? How do I know which compensation scheme applies for my account?

I opened Invest account and want to invest in ETFs. Is my account in the event of default or bankruptcy of the broker protected up to £85,000 or up to €20,000 ? Can you please elaborate more on the account safety?

Thank you.

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rewrite:

the above link will list the rules of eligibility and contains a link that will determine upon application whether you are covered by the scheme. from what I can tell, as along as T212 is covered by FSCS then all clients who have lost money are eligible to make a claim, what I couldn’t easily determine was whether this applies to all individuals or just UK accounts regardless of whether they reside in or out of the UK. As UK and EU law remains unchanged until the end of 2020, the question will come up as to whether or not the application of the FSCS will also undergo a change beyond this date.

As T212 puts the funds in a UK-based bank, this should mean that all clients of T212 are covered by this scheme, provided they are not citizens of any European countries with legislation specifying otherwise.

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Does the FSCS rules dictate the clients’ funds have to be deposited in a UK based bank ? Because I couldn’t see this at the link you gave @Dao and haven’t yet seen a source stating this ! :nerd_face:
And is the compensation scheme only for only for cash funds or also for the securities ? Because it’s unclear to me from their statement :
" 1. The financial services firm you did business with has failed and is unable to return your money itself (the company is ‘in default’).""
Money as in… ? :sweat_smile:

Well, I tried but couldn’t get a coverage : https://claims.fscs.org.uk/PreScreening/DisplayEligibilityDecision/82445e11-e711-47dd-ad6d-89db1ac47c5a

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Hello. Could we get an official answer on this? I have also been unable to find information re. the regaulations that apply to EU, non-UK accounts.

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Does the FSCS rules dictate the clients’ funds have to be deposited in a UK based bank ? Because I couldn’t see this at the link you gave @Dao and haven’t yet seen a source stating this !
And is the compensation scheme only for only for cash funds or also for the securities ? Because it’s unclear to me from their statement…

Yes, both your funds and stocks are covered by FSCS. It doesn’t really matter where our funds are stored, since the levies which we pay are going directly to FSCS. Hence, their fund is the one which will be used for compensation, if any. You can read more about the topic here:

Just for your own convenience:

Well, I tried but couldn’t get a coverage : https://claims.fscs.org.uk/PreScreening/DisplayEligibilityDecision/82445e11-e711-47dd-ad6d-89db1ac47c5a

Well yes, you can’t initiate a claim because:

  • We’re not “in default”, obviously.

  • We offer execution-only service. We don’t offer trading advices. Hence the reason why you can’t initiate the “bad investment advice” claim type.

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Ah well, I didn’t know it was a basis for initiating claims ! I thought it was more like starting a case for them to study !
Thanks for your answers :smiley: T212 is amazing !

Is the information below provided by BrokerChooser incorrect? https://brokerchooser.com/broker-reviews/trading-212-review#review-part-safety

If so, they should be contacted to review their article, it’s a very popular broker comparison portal. According to them, non-UK clients are not covered by the FCA and are only protected up to €20k.

Thank you for your suggestion @AlinMC. We will take care of that indeed.

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@AlinMC

Indeed the information in the table is incorrect and misleading. As a matter of fact, all clients of Trading 212 UK, irrespective of their country of residency and origin (UK, Germany, France, Switzerland, Mexico, etc.) are subject to the UK’s investment protection scheme (the FSCS).
However, if you were a client to another broker within our group - for example, Trading 212 Ltd. (Bulgaria) only then would you be subject to a different investment protection scheme (as it is a specific scheme to each jurisdiction).
Currently, all individuals registering on the Trading 212 platform are automatically registered with Trading 212 UK & are subject to the £ 85,000 FSCS protection scheme.

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Thanks @Michael.P and @David that’s the best explanation I’ve read on this matter, great!

This is the key info which I haven’t seen posted before and should clear all doubt:
“Currently, all individuals registering on the Trading 212 platform are automatically registered with Trading 212 UK & are subject to the £ 85,000 FSCS protection scheme.”

Could you specify what you mean by “currently”?
If I registered in Trading 212 in January 2020 am I registered with Trading 212 UK and protected up to £85000?

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@Kholl

Yes. If you registered last year, you are covered, if you registered today you are also covered. and if you register at any point before this changes you will still be covered et cetera.

“currently” as this will only change once the EU/UK Brexit negotiations conclude and they decide on a new policy going forwards from there.

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