Ring-fenced doesn't appear to mean ring-fenced any more

4 months ago by
Once the dust has settled a bit, I think it might be a good course of action for ShareSoc to lobby the FCA and the legislators as to why "ring-fenced" (assets in a broker nominee) doesn't mean "ring-fenced" any more.

I note the posting and reply to Lord Lee's question on these fora (which seems to give the statute basis for the deduction of fees from client assets).
I note the suggestion elsewhere on these fora of CREST membership (happily, having spoken to my broker, they do and would be willing to offer this) but CREST is increasingly rare to find these days.
Using more than one broker is a possibility, but that creates extra work (and as someone pointed out, if using two brokers, doubles the possibility of having a broker go bust on you) and also creates double admin work and tax work etc.  As it happens, I do use two brokers already (one for my ISA, and one for my main share portfolio).

My broker's response was fairly outspoken when I discussed the matter of fees (No, I won't reproduce what he said as it wouldn't be fair and he told me in confidence from a personal e-mail from his CFO)

I have sent    an E]-Mail as well to thr FCA saying the FSCa should be paying PWC and not the shareholders i thought that's what they were there for ?
written 4 months ago by ron marshall 
That's a great step, thanks Ron!
written 4 months ago by Nandish 
Thanks Allan,

You'll be pleased to hear that we intend to do precisely what you suggest.

It occurs to me that the best solution would be to change the regulations, such that the FSCS was wholly responsible for costs of the administration itself. That way a) the FSCS would have responsibility for keeping administration costs down; b) those costs would come from the FSCS levy on financial institutions, which can be regarded as a kind of insurance policy. The FSCS limits would then only apply when there is a shortfall in the client assets held, e.g. due to fraud.

written 4 months ago by Mark Bentley 
I agree with Mark and this is what we intend to do. It is absurd to market assets and money as ring-fenced when clearly they are not.

This matter should be elevated to the highest levels, both regulatory and political.

I am preparing a template for everyone to write to their MPs so that we can keep the pressure on for change.
written 4 months ago by Nandish 
Thank you Nandish  for preparing the template.

written 4 months ago by Maria 
That's good I have to ask why you hardly see anyting in the papers about this scandal theres noting as far as i can see
written 4 months ago by ron marshall 
I don't understand that either. It's a big issue that affects all investors in the UK, so it surprises me that no paper apart from the FT has written about it.
written 4 months ago by Nandish 
The owner of Beaufort said hed Just put a million pounds into the Firm and cant understand why there being made bankrupt ,if they were made bankrupt because of a rogue trader in one half of the firm why should us shareholders allow our money and assets taken over by THE PWC Vultures .the whole thing stinks as far as im concerned .
written 4 months ago by ron marshall 
There have been articles in the Times as well, but I have not seen those. I am in communication with a Times journalist, who is asking questions about the FCA's role.
written 4 months ago by Mark Bentley 
Excellent we need to get this out there all the other shareholders in other companies must be getting very worried about this Fiasco wondering if there shares and monies are safe
written 4 months ago by ron marshall 
In addition we are exploring ways of getting tabloid coverage - anyone severely affected by this affair, who would be happy to relate their personal story to a tabloid journalist should contact ShareSoc. Also recommend listening to LBC Radio at 08:50 this morning. Lord Lee will speak about Beaufort and our campaign.
written 4 months ago by Mark Bentley 
There are two issues here.
Firstly the issue of ringfencing. Whether it is legally binding or not, the point remains that these nominee accounts were sold to investors as being safe from any problems of the broker itself. Even if there is a loophole that allows this, investors have still been misled by the brokers about the safety of these accounts. To MISLEAD is against the law. Secondly, there is the legality of rule 135 that allows for this looting. Rule 135 states that administrator cost can be taken from assets for the purpose of returning those assets as quickly as possible. It does not state that assets can be used for any other purpose so why are assets being used to pay for the unwinding of Beauforts affairs which is a seperate issue from that of returning assets.
written 3 months ago by David Farrier 

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