MSE misleading on Trading212 ISA

Huffnagel

Hi,
https://www.trading212.com/legal-documentation/uk/invest/Invest-Terms_EN.pdf
Just a question:

12.8. You are not permitted to short sell etc.
fair enough, nobody would allow you, but then further down:

26. Share lending

26.1. We offer a Share Lending Programme, where you allow us to borrow shares that you hold in your Account etc.

I won't copy all that but Section 26. is an interesting one. Is this practice market-wide? Smells more like a bucketshop to me.

masonic

Huffnagel said:

Hi,
https://www.trading212.com/legal-documentation/uk/invest/Invest-Terms_EN.pdf
Just a question:

12.8. You are not permitted to short sell etc.
fair enough, nobody would allow you, but then further down:

26. Share lending

26.1. We offer a Share Lending Programme, where you allow us to borrow shares that you hold in your Account etc.

I won't copy all that but Section 26. is an interesting one. Is this practice market-wide? Smells more like a bucketshop to me.

It is reasonably common. Both brokers and investment funds do it. You will see in the KID of many index tracker funds that this is done as a way to cover some of the fund's expenses. Short sellers need to get the shares they sell from somewhere. If it is opt-in then at least that is something, but if you own a share you probably don't want the company to be subjected to shorting attacks, and stock lending is not entirely risk free. Whereas an index investor may not have any loyalties to particular companies trading on the market.

Aidanmc

Huffnagel said:

Hi,
https://www.trading212.com/legal-documentation/uk/invest/Invest-Terms_EN.pdf
Just a question:

12.8. You are not permitted to short sell etc.
fair enough, nobody would allow you, but then further down:

26. Share lending

26.1. We offer a Share Lending Programme, where you allow us to borrow shares that you hold in your Account etc.

I won't copy all that but Section 26. is an interesting one. Is this practice market-wide? Smells more like a bucketshop to me.

Share lending seems to be only on Invest account and its optional.

monkeycat25

I asked my IFA what he thought and he responded 

"I don’t have any background checks on this on my system at all. Therefore I am sceptical."

When I asked for advice before (when I sold my house (moved into temp rented) and had more than the £85K to worry about, I asked him about 3 banks. He replied they were all fine and if something then happened, not only did I have the exceptional circumstances proviso to protect me but also had his professional indemnity insurance too.

wmb194

monkeycat25 said:

I asked my IFA what he thought and he responded 

"I don’t have any background checks on this on my system at all. Therefore I am sceptical."

When I asked for advice before (when I sold my house (moved into temp rented) and had more than the £85K to worry about, I asked him about 3 banks. He replied they were all fine and if something then happened, not only did I have the exceptional circumstances proviso to protect me but also had his professional indemnity insurance too.

Sceptical in what sense? T212 has been around for years and is profitable. It's covered by the FSCS for investments.

https://find-and-update.company-information.service.gov.uk/company/08590005/filing-history

Grahamnoelbutler

So I transferred in a large cash ISA recently with ease. I have a similarly large cash ISA elsewhere

I’ve been informed that I have a 40/40/20 split of those funds across their three linked banks.

Is there any reason I shouldn’t transfer my other cash ISA account in?

It’ll give me nearly double the FSCS protection limit. As long as their spreading of my second ISA is in similar vein,?

slinger2

Grahamnoelbutler said:

So I transferred in a large cash ISA recently with ease. I have a similarly large cash ISA elsewhere

I’ve been informed that I have a 40/40/20 split of those funds across their three linked banks.

Is there any reason I shouldn’t transfer my other cash ISA account in?

It’ll give me nearly double the FSCS protection limit. As long as their spreading of my second ISA is in similar vein,?

The way your money is split between different banks can vary from day to day. So don't assume it's going to stay the same as you see it today..

TheBanker

Also remember that the FSCS £85k limit applies to all the money you have with those banks, so of you have other accounts with JP Morgan (including Chase), NatWest or Barclays (which will shortly include Tesco) you need to factor those in.

cmgurney

Grahamnoelbutler said:

So I transferred in a large cash ISA recently with ease. I have a similarly large cash ISA elsewhere

I’ve been informed that I have a 40/40/20 split of those funds across their three linked banks.

Is there any reason I shouldn’t transfer my other cash ISA account in?

It’ll give me nearly double the FSCS protection limit. As long as their spreading of my second ISA is in similar vein,?

I came here looking for an answer to the same question. I've had my cash ISA with Trading212 since June. With the interest being added daily, I will hit the £85,000 limit tomorrow. The split on my account is 16 / 40 / 44 between the three linked banks. There are two separate posts by Trading212 on their user forum stating that FSCS protection is £85,000 per bank. I have no other savings with any of those three banks. I realise that the proportions held in each bank could change but that's something that can be monitored and it has remained stable for the past three months. So I'm inclined to leave the money to accumulate interest over £85,000.

Lettuce2

I totally agree with the comments of  27th June@ 12:41.
It would have been better and transparent if upfront on their flyers Trading 212 clearly state the delay in payment....just like Oxbury bank for example.
It is not until my son tried to withdraw £3995 on Friday the 20th for the deposit of a car that we were reminded of the small print in paragraph 9.3 of the terms and conditions.
The monies was deducted from his ISA account but payment was not received into his Lloyds account until Tuesday 24th.
The bank of mum and dad had to come to his rescue and saved the day!