Nothing in the relevant term has changed in a way to impact the business, nor the client’s relations with Trading 212. Rather: more details are added for the sake of transparency.
In a nutshell: the client assets are kept in a segregated account. In the unlikely event of insolvency of Trading 212 UK Ltd. → client’s assets will be protected.
The information in the discussed video can be misinterpreted as it contains a personal point of view towards legal documents. We are encouraging every client who has any legal questions or insecurities to reconcile with a solicitor or a lawyer in order to receive accurate advice.
Now in more detail: the update to Clause 13.10 is intended as a clarification in line with CASS 6.2.3R (CASS 6.2 Holding of client assets - FCA Handbook). We would like to stress that all client assets are held in clients’ omnibus accounts, segregated from assets of Trading 212 UK Ltd., in line with the applicable rules under the Custody rules (CASS 6). At all times Trading 212 UK Ltd. complies with all relevant rules under CASS 6, which relates to financial instruments, and CASS 7, which relates to client money.
For the avoidance of doubt, you will at all times retain the beneficial ownership of your shares - your shares will always be protected under CASS 6.
Retail client brokers in the UK and across the world usually operate with a custody chain. This means that our service is such that it is not actually Trading 212 UK Ltd. holding your financial instruments but is that we provide you access to a worldwide network of custodians, who hold the relevant financial instruments for your benefit and risk as ultimate beneficiary. In all situations we will require custodians to protect your investments against their bankruptcy. Due to the nature of how the financial markets operate and the applicable rules and market practices, it may be the case that the assets are not recorded in your name but are recorded in our name (Trading 212 UK Ltd.), the name of our custodian or another third party.
By way of example, if you have bought a share listed in the US, it will be held via a custody chain (through Trading 212 UK Ltd., our custodian etc.) with the end custodian being the Depository Trust Company (DTC) in the US. The share will be held in the name of DTC’s nominee entity, Cede & Co, as is standard with US shares. In any case, however, the relevant share will be held for your benefit, in line with the CASS 6 rules.