Non-Objecting Beneficial Owner / Objecting Beneficial Owner

On Interactive Brokers the user is “Non-Objecting Beneficial Owner” by default.

Since Trading212 is using Interactive Brokers “under the hood” does Trading212 have the same policy?

A NOBO refers to an account holder who provides its carry broker (i.e., IB) permission to release their name and address to the companies or issuers of securities they hold. These companies or issuers request this information in the event they need to contact shareholders regarding important shareholder communications such as proxies, circulars for rights offerings and annual/quarterly reports. IB, by default, classifies clients as a NOBO but allows client to have their classification changed to that of an Objecting Beneficial Owner (OBO). To do so, clients are required to provide formal notice of their request to be classified as an OBO through a Message Center ticket available via Account Management.

Since it’s not possible to vote (“The shares are held in a nominee account so having the ability to exercise voting rights is extremely unlikely at this point.”) does this means that the user of the T212 platform is not “beneficial owner” of the shares? Why?

Does this means that the user of the T212 platform (“Invest” account) is neither NOBO nor OBO?

I can’t answer your question as I just don’t know enough personally, but I do know that certain rights - such as voting as you mentioned, are not offered and also certain privileges - such as discounts offered by companies to shareholders, equally are not offered. One example may be discount vouchers posted to shareholders to redeem at certain eateries, or added credit onboard a ship (carnival stock for example etc). Those perks, we do not receive as it stands I believe.

That’s all I know, not sure if it helps answer or not, but essentially how I understand it is, the shares held in our accounts are missing certain rights (no fault of Trading212, just how it is), but the stock is still in our ownership at the end of the day. It’s just a little different as there is a go between from IB to T212 to us. Hence some offerings we may not receive.

The query you raised is more of a technical issue and is not a legal and/or contractual restriction of any manner whatsoever. To be clear - there is no issue with your entitlement over the stock you hold, and you are the beneficial owner of the shares at all times.

All of our clients’ shares are held in an omnibus account with IB, and as far as IB are concerned all shares are T212 clients’ shares, however, they do not distinguish between each individual client and his respective shares - only T212 maintains such records. So IB simply notes that we hold, say, 100 000 TSLA on behalf of our clients, but unfortunately for the time being we could only exercise the voting rights under all our clients’ shares altogether (as if we were the sole shareholder, as opposed to being able to exercise the voting rights under each share in line with the particular client’s voting instructions).

We are pushing to get a solution on this, but we cannot make any promises for the near future. :white_check_mark:

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I got feedback from Trading212 user who claim that he got the correct double taxation treatment for his US stocks (the dividend is $0.233, after 10% tax it should be $0.2097, he received 2 cents for 1/10 part of a share, however it says “amount per share $0.21”).

Because the correct tax rate for Bulgaria was applied this means that there is some information about the tax residency of the owner of the stock.

When I asked IB and Trading212 support they both answered to my question incorrectly citing 15% tax rate, but this is not true, the tax rate according to the double taxation treaty between US and Bulgaria is 10%, and in practice it looks like it’s the 10%.

Proof:

(The screenshot is from another customer’s account, I still don’t own US stocks.)

Currently there are more important issues, like this for example.

Well, what you got is the default tax rate which indeed is 15%, however, we’re always aware of the country of residence of a client, hence a proper % rate is applied. So if you’re from Bulgaria, then 10% rate will be applied.