Sharedealing Nominee Accounts

nv200

Question

I hold a hefty number of shares with Halifax Sharebuilder, and I guess they held as a nominee account. What happens if for example the bank went bust? Would I still own the shares or are they an assest of the bank?

cheers

Nigel

sspfin

I was thinking exactly the same thing in recent months. I asked this question to Halifax via a secure e-mail in my Sharebuilder account on 25th Nov 2009 and I got this response from them today (26th Nov 2009):


"Thank you for your e-mail in connection to the safety of shares and cash held in your Halifax Share Dealing Limited account.

As a subsidiary of Lloyds Banking Group we are a part of the UK's biggest savings and mortgage provider which has a strong capital base and as such you can be confident that you are dealing with a sound business.

The stock you hold with Halifax Share Dealing is held in a nominee company which ensures that it is appropriately segregated from the assets of the company. This means that your assets will at all times be clearly identifiable as belonging to a customer and not HSDL. Similarly, cash is held in separate client bank accounts and is segregated from HSDL's assets.

In the unlikely event that these segregated assets were unavailable for distribution and HSDL were unable to meet claims made against it, all eligible customers would be able to make a claim on the Financial Services Compensation Scheme (FSCS). This scheme provides compensation of up to 100% of the first £30,000 and 90% of the next £20,000, to a maximum of £48,000.

HSDL is a participant in the FSCS in its own right. This means that any claim involving HSDL would not, in any way, affect your ability to make separate claims against the scheme in relation to other regulated entities, including other Lloyds Banking Group companies.

I hope that I have been able to help you with your enquiry, however should you require further information please do not hesitate to call us on 08457 22 55 25, or e-mail me at any time".

boomerangs

sspfin wrote: »

I was thinking exactly the same thing in recent months. I asked this question to Halifax via a secure e-mail in my Sharebuilder account on 25th Nov 2009 and I got this response from them today (26th Nov 2009):


"Thank you for your e-mail in connection to the safety of shares and cash held in your Halifax Share Dealing Limited account.

As a subsidiary of Lloyds Banking Group we are a part of the UK's biggest savings and mortgage provider which has a strong capital base and as such you can be confident that you are dealing with a sound business.

The stock you hold with Halifax Share Dealing is held in a nominee company which ensures that it is appropriately segregated from the assets of the company. This means that your assets will at all times be clearly identifiable as belonging to a customer and not HSDL. Similarly, cash is held in separate client bank accounts and is segregated from HSDL's assets.

In the unlikely event that these segregated assets were unavailable for distribution and HSDL were unable to meet claims made against it, all eligible customers would be able to make a claim on the Financial Services Compensation Scheme (FSCS). This scheme provides compensation of up to 100% of the first £30,000 and 90% of the next £20,000, to a maximum of £48,000.

HSDL is a participant in the FSCS in its own right. This means that any claim involving HSDL would not, in any way, affect your ability to make separate claims against the scheme in relation to other regulated entities, including other Lloyds Banking Group companies.

I hope that I have been able to help you with your enquiry, however should you require further information please do not hesitate to call us on 08457 22 55 25, or e-mail me at any time".

So if you have more than £48K worth of shares you could still potentially lose out?

sabretoothtigger

Very unlikely I think. They belong to you, the bank would have to break the law and gamble assets it does not own. Should be safer then cash on deposit I believe