Goodbody and new asset protection regulations

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c00lcarl

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I have received a notification from Goodbody stokbrokers that new regulations have been introduced regarding Client Asset Regulations (SI 104/2015) which relate to the safeguarding and protection of client assets held by Goodbodys, the purpose of the rules is to strengthen safeguards for holding client assets and facilitating the efficient return of these assets in the event that the firm becomes insolvent.

However together with this letter is a client consent form which is asking the client to agree to move their assets to a third party based outside the rep of ireland "which does not have regulatory safeguards similar to the rules in place"

Even more worrying - " place client assets with third parties that may have a security interest or lien over, or right of set-off in relation to those assets"

It is a bit confusing as the cover letter seems to point out the benfits of the new regulations but the consent form seems to be requesting that the client agrees to move the assets to a third party/country where the regulations do not apply
 
I agree, I got the same letter and it is very worrying. By consenting to that letter you are putting your funds at risk.
 
How safe are Goodbody's and the Client Assets they manage?

Is there a safer Broker or method of holding individual stocks available in Ireland?
 
c00lcarl said:
However together with this letter is a client consent form which is asking the client to agree to move their assets to a third party based outside the rep of ireland "which does not have regulatory safeguards similar to the rules in place"
Click to expand...

Are you sure that's what the letter actually says?

The written consent of a client is now required by the Central Bank in circumstances where a client instructs an investment firm to deposit funds with such a third party. If you are not planning on making any such instruction the consent shouldn't be relevant to you.
 
Depending on the shares you own, you can always hold them in share certificates. Then you don't worry about the stockbroker going bust.

They are more expensive to buy and sell because of the paperwork involved.

Brendan
 
Brendan Burgess said:
Depending on the shares you own, you can always hold them in share certificates. Then you don't worry about the stockbroker going bust.

They are more expensive to buy and sell because of the paperwork involved.

Brendan
Click to expand...

Brendan,

I got the letter as well. I don't think your getting the whole gist of the subject matter of the thread. Goodbody stockbrokers are trying to circumvent the regulations imposed on them by the Central Bank of Ireland, supervision and enforcement section, by SI 104/2015, all the client has to do is refuse to consent to the transfer of their securities to the nominated third party. Then Goodbody stockbrokers have to manage the shares etc in compliance with SI 104/2015, clients affected, do not need to transfer their respective shareholding into share certificates (which will incur additional costs on both ends ).
 
Brendan Burgess said:
Depending on the shares you own, you can always hold them in share certificates. Then you don't worry about the stockbroker going bust.

They are more expensive to buy and sell because of the paperwork involved.

Brendan
Click to expand...

I asked for clarification about "I/we consent to Goodbody depositing client financial instruments with a third party in a country which does not have regulatory safeguards similar to the Rules in place. " from Goodbody and they basically said it is unlikely to happen with normal securities but it may arise with an exotic security.

I agree with the user , I am just not going to sign the consent form.

re Brendans point, Holding paper certs is an option but is not really practical if you want to take advantage of modern online trading, I thought the crest system meant that certs are held in the clients name in a form of escrow so that even if the stockbrokers has a problem or goes bust the investment is not at risk.
 
I have no connection with Goodbody, but I don't believe that people's concerns are valid. My sense (having received a similar letter from another company) is that:

- There are new client asset rules.

- Goodbody are informing their clients of those rules.

- It is easy to apply the new rules to "plain vanilla assets".

- If a client wants to hold certain esoteric investments (e.g. Peruvian equities bought on the grey market), they need to consent to those assets being held in a different manner.
 
That's it in a nutshell GG.

Certain jurisdictions require securities issued by companies in that jurisdiction to be held with a local depositary. The Central Bank now requires investment firms to obtain the written consent of customers prior to making any such deposits but if a customer has no intention of instructing their broker to purchase securities in those jurisdictions then the required consent is of no relevance.

Much ado about nothing.
 
Goodbody also are requesting permission to hold interest earned on Client Funds. Is this reasonable when they charge fees also
 
I received the same letter. I was also concerned in the same way as earlier posters. I cant see how any of my holdings would need to be transferred to a third party outside of Ireland but I'm sure not consenting to it.

When I phoned them up, they reassured me it wouldnt really affect me but urged me to sign anyway - which I refused. They sent me another letter telling me that by not consenting that I have deemed to consent. I suppose I'll just have to end my relationship with them if I really object.
 
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