Raise the "protected founds" amount

Greetings,
I was reading about this and made me think: “Your funds are kept in a segregated account, protected by the ICF up to €20,000”.

Why not raising that amount to 50k for example? I think that would make people feel “safe” to invest more of their money instead being worried to achive that ammount.

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OK I know nothing about this other than what I’ve just read with a quick google. However, the ICF is a Cyprus regulated protection and has a maximum limit of Eur20,000. That isn’t defined by T212 it is just provided by them as part of their regulated product and service. However, if you read the T212 page, T212 additionally (for EU clients) have a Lloyds policy that provides up to 1million of protection. Thus assuming you’re in Cyprus you have 1million protection

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As said by the WMU :smiley: , the 20k ICF is a legal Cyprus protection scheme, not a T212 one. The 20k are normal amount used by most EU countries, as some could protected more if they want to. This protection scheme is only for customers of T212 entity registered in Cyprus (most recent EU customers).

A more detailed and legal text about the Cyprus ICF:

https://www.cysec.gov.cy/en-GB/investor-protection/tae/information/

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For example, the protection scheme for securities accounts in Portugal is 25k EUR maximum.

https://investidor.cmvm.pt/PInvestidor/Content?Input=76FD377A0D0AAB4AA4030528CC6F0688CC9189D0DB27D893CACF5AA8159CD80E

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That I know and understand.

But as you said here:
as some could protected more if they want to.
That is my question, is there any reason why Trading 212 does not protect with more as they do in UK?

T212 do provide EU customers with more protection. They have 1million protection via a Lloyds insurance policy

See the bottom of this page which is about the protection in Cyprus: Trading 212 CY - Funds and assets protection – Trading 212

For what I understand that is “only for customers of T212 entity registered in Cyprus”. Not for everyone else.

I’m getting confused. If you aren’t in Cyprus why are you referring to the Cyprus ICF protection of Eur20,000. Perhaps easiest to explain where you are

I understood that the 1m (private found)is an extra layer of safety (not a regulation).

CySEC ICF, covers up to €20,000 per investor. And this is for everyone once trading 212 is regulated by CySEC so that applies to everyone (except UK where T212 is regulated by FCA).

That applies for Cyprus and everyone else (except UK). That is what I understood.
Source: Is Trading 212 Safe? How investors are protected (2024)

That is the reason I am asking why not raising those 20k (regulated by CySEC ICF) to 50k or even 100k like other Brokers (I think I can not name it but we all know there are)?

Or maybe I got it all wrong?

If you are concerned that this is only for people in Cyprus, where are you?

As I’ve said several times, for EU customers T212 has a policy that provides 1 million protection. Are you saying that this is insufficient?

I am struggling to understand what the issue or question is?

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Nah that was a mistake because of what RLX wrote before (and I misunderstood it). Disregard that one. :sweat_smile: What I mean is my last Reply:

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Sorry I really don’t understand the question.

You still have not said where you are. Are you in Cyprus?

You acknowledge that you know that there is a 1 million policy that provides protection. What is the problem with this?

The ICF €20,000 scheme is a Cyprus scheme separate to what T212 provides.

If you are trying to compare to another broker tell us who they broker is and what you are trying to compare T212 to. You are asking why T212 doesn’t increase the regulated ICF scheme to 50k or 100k “like other brokers”. Which Brokers. If you can’t answer these questions were going round in circles. Unless I am misunderstanding something I don’t see how T212 can change a regulated statutory compensation scheme. The Cyprus Governments website specifically says “The maximum amount of compensation paid to applicants, who will be deemed as eligible for compensation, is twenty thousand EUR.”. How can T212 compel a Government to provide greater protection under the ICF than the Government themselves say is the maximum.

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The UK T212 entity has the maximum legal mandatory protection scheme of 85k GBP/per customer.

The Cyprus T212 entity has the maximum legal mandatory protection scheme of 20k EUR/per customer. This is the EU minimum protection scheme for securities account in every EU country. T212 decided to give an extra protection with Lloyds insurance policy already mentioned by @WakeMeUp .

The 20k EU protection scheme may seem small when comparing with other regions (e.g. US or UK), but EU is already discussing increasing it.

Also UK protection scheme is bigger because it also includes bank deposit accounts. In EU there is a separate protection scheme for bank deposit accounts, with a maximum of 100k EUR/per customer. So if we add both EU protection schemes, 100k EUR (bank deposit accounts) + 20k EUR (securities accounts), we will have a higher protection than the UK, depending of the current EUR/GBP (120k EUR of the EU vs. 99.347k EUR of the UK).

PS: I mentioned before than some EU countries could offer higher protection scheme for securities accounts, for example, Portugal offers a 25k protection scheme maximum, but the 20k EU protection is always mandatory.

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@RLX thank you for your clear and detailed explanation. My point was also that I don’t see (perhaps wrongly) how a company such as T212 can change the limit of a statutory Government scheme (ie the Cyprus 20k). Yes T212 can increase it with additional protection such as T212 1million insurance but @Tbada was suggesting that other brokers provide increased protection under the regulated scheme and I just can’t see how and it would contradict the Cyprus government’s own website. I am assuming that the other brokers that Tbada refers to are simply doing what T212 has done - offer additional protection via insurance - albeit T212 protection is significant more (1 million compared to Tbada referring to 50k or 100k)

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It can’t. The official protection schemes are mandatory by the EU legislation, that are afterwards put in each national EU member states legislation.

Brokers and other financial intermediaries don’t offer protection, the regulatory bodies/national legislation does it. If the financial intermediaries wish to provide an extra protection, it’s their decision.

It’s like the other products, for example, in Portugal there is a mandatory legal guarantee of 2 years when we buy something. The seller could offer an extra guarantee, but it isn’t obliged to, as it has financial costs.

Unless @Tbada clarifies and/or give us a link to an example broker, we are chasing our own tails. :smiley:

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etoro was saying somewhere your funds are safe to up to 100k but is the same as trading 212. After searching a bit I understood that most of them are around 20 to 22k. I got it all mixed for some reason.

Well, it was good to learn a bit about founds regulations.

eToro EU platform is also a Cyprus entity, so their customers are also under the same Cyprus protection scheme of 20k EUR maximum.

After a quick search it seems that they have a similar extra protection as T212:

For users with larger balances, private insurance covers losses of up to 1 million euros/AUD.

But it isn’t for all their customers as T212 does:

Insurance

Certain eToro entities provide eligible customers with free insurance purchased from Lloyd’s of London, one of the world’s leading providers of specialist insurance, giving coverage of up to 1 million euros or AUD (depending on the region).

The free insurance is only available for Platinum, Platinum + and Diamond Club customers of eToro (Europe) Ltd. and eToro AUS Capital Limited.

https://www.etoro.com/investing/insurance/