Quick question on shares in the invest account.
Do we actually own the share, or does T212 own the share that we’ve bought.
There seems to be some confusion on facebook.
I’m of the belief that they are in our name, held by T212 via IBKR.
Someone else said that when we buy the share, we’re basically buying it for T212 to hold in their name…and we own nothing?
Can someone help me on this.
Thanks.
They’re held under Trading 212s name, but you are the beneficial owner and they are under your name in Trading 212s books.
I don’t understand. If they are in T212’s name, how am I the beneficial owner. Am I buying shares for T212?
So are T212 no longer a broker?
When I buy a share via invest account, I’m not a legal shareholder as T212 own the share. In which case, invest is basically like an unleveraged CFD account? (albeit they are on the same side of the position as me)
Or am I wrong?
You get the dividends etc. That come with the share.
No you’re buying the shares for yourself. It’s just a book think, keeps things easy with IB, and you don’t have to worry about certificates or anything. Say you wanted to close your account and take your shares, you could get the shares in your name and get the certificates. But if you want them on the Trading 212 platform it’s going to be in their name.
No CFDs just replicate price movements without any physical shares being bought or sold (I believe). I get where you’re coming from, it’s like you’re not actually owning anything, but it doesn’t actually matter who owns the shares as long as you’re keeping the capital appreciation and dividends, and you have the right to sell when you like. Which you do. So I wouldn’t worry about it. Hope this helps
Thanks for the reply.
I’m just confused how T212 are a broker, when they own the share. In which case me buying the share is in effect a derivative transaction. Just like a CFD, except the leverage.
So basically my invest account owns no shares for me. T212 owns them and agrees to pass me the dividend or price movement difference when I sell. This is just like a CFD.
Sorry…am I missing something here?
It’s not a derivative. A derivative means it’s simply a contract, meaning that one party will agree to pay the other so much is the value of an asset changes in one direction and vice versa. It’s only a contract, meaning no asset is every owned.
But you’re basically right, you technically don’t own any in the books of the company or IB, but you do in the books of Trading 212, which means they’re agreeing that the shares are yours. But I re-emphasise, it doesn’t actually matter to you who owns it. I wouldn’t be worrying about it
Think of it a bit like Trading 212 act as a trustee on your behalf. They hold the shares, but legally you are the ultimate beneficial owner.
What would you be able to do, if you ‘owned’ the share in your terminology, that you could not do, right now?
I seem to remember when I first joined T212, reading where someone asked how does T212 make any money, and the reply was it doesn’t make any money from normal investing or ISA’s but it makes it from the CFD accounts.
I am not sure how though, plus now I’ve read comments on this thread I don’t know.
Cfd income and by loaning our shares at interest. Ibkr do this and the account holder gets the interest. You can opt into it.
T212 does this but they keep the money.
Fair enough for commission free trading on small accounts.
It makes sense as they physically own the share.
So I buy the share for T212.
T212 can then loan my shares into the market at interest. They keep the interest.
The only holding I have is an agreement with T212 that I’ve some sort of claim on the share that T212 own.
It does seem a bit muddy. T212 cannot really be holding the share in trust too, as they are loaning the share too for their own interest income.
I must admit, I’m still a bit confused by it all.
But in short it seems, when you buy shares in the invest account, you don’t actually own the financial asset (share), but there is a contract agreement with T212 that the share price and dividends will follow the actual share they own.
Very similar to a cfd, except its unleveraged and T212 have bought the share.
Nonono the share is owned, it’s not just a contract, it’s just that Trading 212 have their name on it, but you’re the beneficial holder.
OK I’m a newbie to a lot of this, so for example if I buy 10 shares in XXX company on T212 and then one day I want to go to another platform, can I take those 10 shares with me to the new platform or do I have to sell them?
Col.
Currently sell, simply because they have t implemented transfers yet, but they’re working on it
How can I be the beneficial owner, if I’m not the owner?
Sorry and I am not being awkward, but I don’t understand.
Trading 212 own the share but do not get the benefits from the share, you own the benefits of the share, but not the share. Hence, the owner of the benefits
So when the OP said people have told him on Facebook that he doesn’t own the share and T212 owns it, they are right then.
So my earlier question about can I take shares with me if I leave, you said they haven’t implemented transfers yet, so if and when they do this will change, anyone who buys a share will be the owner, am I right or did I misunderstand?
Ownership can be transferred to you, from their name to yours. But if you want it in your name you can’t have the shares on the platform. You’ll own the certificates, and will be responsible for your own dividends and trying to get them sold etc. So it’s just dumb. They can transfer in cash right now but not shares. I’m pretty sure shares on any platform will not be in your name, so they’ll be changed over to the other platform’s name during a transfer I guess, I don’t really know anything about it. It’s just how it works, it doesn’t have any impact on you as a user.
Yes I understand what you are saying, I was trying to make it a bit more easy for not just me but anyone else reading the thread.
I remember a good few years back I knew a man who bought shares in a football club for his grandson, as years went by he died but the shares belonged to his grandson, I have no idea where the shares were held but the football club in question went under new ownership and the shares sky rocket, and other people who also owned shares in the club made a fortune.
I don’t think his grandson sold any I’m not sure but from what he told me he bought quite a few shares so if his grandson did sell at the time he would have made a nice packet.
I can understand T212 keeping it registered in their name to facilitate shorting trades I guess.
I’m just unclear as to the legal liability bit. So are T212 liable for my cash, or, for the shares appreciation and dividends.
If T212 went bang tomorrow, my shares are gone too presumably, as they were never mine to begin with.?
This explains why it’s only the 85k cash balances in a segregated account are covered by the fca…as T212 only is liable for cash balances of clients and not the physical shares.
Am I right or wrong…and open to correction.
I’m just concerned with building a portfolio over 10-20 years when in effect, I’ve no underlying right on a financial asset, purely a claim on a derived cash balance that happens to track a stock.
Am I misunderstanding here?
Is this industry standard?
Pardon my ignorance.
While I accept the status quo, I’d prefer a certificated account. Actually, I’d prefer the regulator to mandate a CREST account for every investor, have our names on the certificate, attend AGMs, vote down pig toffers etc. It won’t happen while T212 [& HL & BR & … ] get the champagne receptions, but until we agitate for change, we will buy shares for THEM to influence. REVOLT OR DIE!