We understand your concern, but in practice, this provision is not applicable with respect to your investments, please find out why:
The said provisions are intended to predict a hypothetical case where, in consideration of your best interests, your assets may be temporarily commingled with some of our own assets. Something we do not and do not intend to do. This is allowable for professional clients, not for retail - but we currently segregate all assets irrespective of classification.
Furthermore, if this hypothetical case occurs, then another hypothetical event would have to occur - either us or the custodian become insolvent. The reason for the provisions to exist in our agreement is that when drafting we tried to foresee all services that we may provide to our clients. However as stated above, due to the uncertainties in such scenarios, we are not commingling client assets with proprietary assets in any way. If you are a retail client, this would not be allowed, and our compliance with this restriction confirmed by our auditors.
In reply to your questions, please be informed that:
- The custodian we have been using for some years now is Interactive Brokers LLC (a member NYSE - FINRA - SIPC and regulated by the US Securities and Exchange Commission and the Commodity Futures Trading Commission). We hold an agreement with Interactive Brokers, that affirms the separation and segregation of clients’ (your) assets. The said agreement, its terms and the whole custodian relationship process is audited yearly by our client assets auditors as part of the regulatory confirmation required by FCA.
You can double-check the custodian, by reviewing the Best Execution reports, uploaded on our website (Client reports EQ) where you will see that the custodian and execution venue is Interactive Brokers LLC.
Furthermore, please be advised that Interactive Brokers also has equivalent client asset protection regulations similar to the UK. For the avoidance of doubt In the event of T212 UK / Interactive Brokers failure (for example due to insolvency), any assets held in a client assets account by third parties will be segregated from our / IB’s other assets and will not be available to our / IB’s creditors.
- As explained above your assets are segregated from our / IB’s assets at all times, so your assets and your claims will never compete against our creditors’ claims.
Particularly, please note that all investments (money or shares) are held on your behalf in accordance with the FCA’s Client Assets Rules. Ultimately, all of our clients’ money and assets are held and safeguarded in segregated accounts alongside the property of our other clients, hence segregated from all our obligations towards third parties.
Finally, to address any concerns, please note that as a firm regulated by FCA we are also subject to the requirements of the capital and liquidity rules of the FCA which requires T212 UK to ensure that it has sufficient financial resources to meet its liabilities as they fall due. T212 UK monitors its financial resources on an ongoing basis and reports the results to its Board and to the FCA. We are subject to yearly External Audit by a reputable audit firm of accountants who come to verify and confirm our compliance with the FCA rules to safeguard clients assets and to assess the basis of our financial resources.