Are T212/other 'Third Party' Cash ISA's watertight?

Frequentlyhere

I have read previous threads on this, but still have a question.

So, T212 itself is not FSCS regulated, but your cash ISA is held with banks like Barclays etc which are regulated and any funds held with T212 are held in a separate segregated client account.

I'm comfortable that if Barclays, JP Morgan et al were to go bust, I'd get my money back. 

I'm also comfortable that if T212 wind up neatly then I'd get my money back because it's held by the banks.

But what if T212 or one of its kin become insolvent in a distinctly messy fashion? Who is actually checking that their funds are where they claim them to be?  T212 are FCA regulated, is that sufficient to ensure that?  (genuine question, I've no idea).

masonic

T212 is FCA regulated and any client money it holds for you is FSCS protected by virtue of the client money segregation and its regulatory permission to hold client money. There could be a shortfall in your cash and administration costs if T212 went bust, but that is where the FSCS would step in. Up to the £85k limit of course.

Albermarle

masonic said:

T212 is FCA regulated and any client money it holds for you is FSCS protected by virtue of the client money segregation and its regulatory permission to hold client money. There could be a shortfall in your cash and administration costs if T212 went bust, but that is where the FSCS would step in. Up to the £85k limit of course.

So this £85K is separate from the £85K for the bank deposits.

Similar/same as the £85K that is cover for investment platforms ?

masonic

Albermarle said:

masonic said:

T212 is FCA regulated and any client money it holds for you is FSCS protected by virtue of the client money segregation and its regulatory permission to hold client money. There could be a shortfall in your cash and administration costs if T212 went bust, but that is where the FSCS would step in. Up to the £85k limit of course.

So this £85K is separate from the £85K for the bank deposits.

Similar/same as the £85K that is cover for investment platforms ?

It's untested, but yes, if Barclays were also to fail then money actually held there would be protected up to £85k for deposit accounts, and simultaneously money misappropriated by T212 would also be covered up to a further £85k for missing Client Money (equivalent to investment platforms).

I don't think we'll ever find out how it works in practice.