Quick question on shares in the invest account.
Do we actually own the share, or does T212 own the share that weāve bought.
There seems to be some confusion on facebook.
Iām of the belief that they are in our name, held by T212 via IBKR.
Someone else said that when we buy the share, weāre basically buying it for T212 to hold in their nameā¦and we own nothing?
Can someone help me on this.
Thanks.
Theyāre held under Trading 212s name, but you are the beneficial owner and they are under your name in Trading 212s books.
I donāt understand. If they are in T212ās 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, Iām 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 youāre buying the shares for yourself. Itās just a book think, keeps things easy with IB, and you donāt 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 itās 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 youāre coming from, itās like youāre not actually owning anything, but it doesnāt actually matter who owns the shares as long as youāre keeping the capital appreciation and dividends, and you have the right to sell when you like. Which you do. So I wouldnāt worry about it. Hope this helps
Thanks for the reply.
Iām 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.
Sorryā¦am I missing something here?
Itās not a derivative. A derivative means itās 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. Itās only a contract, meaning no asset is every owned.
But youāre basically right, you technically donāt own any in the books of the company or IB, but you do in the books of Trading 212, which means theyāre agreeing that the shares are yours. But I re-emphasise, it doesnāt actually matter to you who owns it. I wouldnāt 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 āownedā 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 doesnāt make any money from normal investing or ISAās but it makes it from the CFD accounts.
I am not sure how though, plus now Iāve read comments on this thread I donāt 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 Iāve 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, Iām still a bit confused by it all.
But in short it seems, when you buy shares in the invest account, you donāt 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, itās not just a contract, itās just that Trading 212 have their name on it, but youāre the beneficial holder.
OK Iām 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 theyāre working on it
How can I be the beneficial owner, if Iām not the owner?
Sorry and I am not being awkward, but I donāt 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 doesnāt 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 havenāt 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 canāt have the shares on the platform. Youāll own the certificates, and will be responsible for your own dividends and trying to get them sold etc. So itās just dumb. They can transfer in cash right now but not shares. Iām pretty sure shares on any platform will not be in your name, so theyāll be changed over to the other platformās name during a transfer I guess, I donāt really know anything about it. Itās just how it works, it doesnāt 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 donāt think his grandson sold any Iām 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.
Iām 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 itās only the 85k cash balances in a segregated account are covered by the fcaā¦as T212 only is liable for cash balances of clients and not the physical shares.
Am I right or wrongā¦and open to correction.
Iām just concerned with building a portfolio over 10-20 years when in effect, Iāve 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, Iād prefer a certificated account. Actually, Iād 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 wonāt happen while T212 [& HL & BR & ā¦ ] get the champagne receptions, but until we agitate for change, we will buy shares for THEM to influence. REVOLT OR DIE!