What happens if a stockbroker gets banktrupt?

influence

Just being curious. What happen to my share if a stockbroker gets bankrupt?

How can I prove my holdings and request for a refund/the appropriate stock cert etc?

Cheers

Lokolo

No idea how you would get all the info but nothing will happen with your stock, it will just keep going. So not sure how you'd sell!

dunstonh

Are you saying you have a nominee service or does the stockbroker just handle transactions?

influence

nominee service

sh856531

I'm pretty interested in this is as well. What would happen if someone like Hoodless Brennan or selftrade went bust? How do you sell or transfer your shares? Would you get hit with a fee to do a transfer?

Not that I think any of these companies would go under - I'm guessing with all the financials being traded and people snapping up "cheap" shares they might be doing quite well....

JoeCrystal

@sh856531 You do not actually own these shares, you just gain benefits from them. Hoodless Brennan or other online brokers are true legal owners of these shares. That is what I can understand at the moment.

Onawingandaprayer

As if I didn't have enough to worry about! Now I've got worried about my shareholdings...(that's in addition to the plunging prices!)

Found the enclosed on the Selftrade site

http://www.selftrade.co.uk/important-information/your-money.php

Sounds alright-ish. (Or as much as one can hope these days.)

ad44downey

Onawingandaprayer wrote: »

As if I didn't have enough to worry about! Now I've got worried about my shareholdings...(that's in addition to the plunging prices!)

Found the enclosed on the Selftrade site

http://www.selftrade.co.uk/important-information/your-money.php

Sounds alright-ish. (Or as much as one can hope these days.)

That only mentions cash though. What about the shares you hold with them in a nominee account? Are you sure they would be safe

Blah99

The answer depends on how your broker manages the holdings. If your broker uses pooled holding (ie: sticks all their customer's holdings into one lump, and maintains a register of who owns what) then it could be complex. However regardless of what happens those shares are yours, not the brokers. A contract exists between you and your broker, so if your broker went bust the receivers couldn't just take your shares. You would need to go through the process to get the asset title transferred to you (so yes, in theory you wouldn't be able to buy or sell during the period), but you would get your holdings back.

That said, if a broker did go under, due to the size and complexity of the asset register it's likely that their online trading system would be kept active.

JoeCrystal

Someone mentioned about Irish High Court case that shares holding by online brokers can be seized to pay off their debts. But I may be wrong but still...

fatpig_2

Maybr it's best to transfer them out of the nominee account and get a paper share certificate. It only usually costs a tenner for this.