A helpful response from Freetrade25 Jul 2022 13:21
Hi there ??
The shares are held in the Freetrade nominee which makes Freetrade Ltd the nominee shareholder. The beneficial owners are the underlying holders (e.g. you) and these are the legal owners of the shares. The nominee shareholder appears on the company's documentation and public records but the beneficial owner receives the income and dividends from the share ownership.
Freetrade as the nominee shareholder does not own the shares or benefit from the shares in any way. We also have no claim over the shares and have signed a declaration of trust which states that we will not benefit and have no legal claim over the shares, thus protecting the beneficiary owner's assets.
This is the same whether the shares are in certificated form or dematerialised (electronically - the current standard).
We are required to follow the FCA client assets rules, which set out the obligations for safeguarding your assets. These requirements include implementing strict controls over the segregation of client assets, carrying out daily reconciliation checks and keeping accurate and promptly available records. These rules are designed to ensure that should Freetrade fail your assets would be safe, and could be returned to you (more information can be found here).
We are a member of the FSCS scheme, which means that in the unlikely event that we were to fail, coupled with a failure on our part to safeguard your assets or some other failure, as a customer you may be eligible for FSCS compensation of up to £85k of the value of your assets held with us.
If Freetrade was to cease trading, all clients assets are held in a Nominee account, which is reconciled daily. Our internal accounts would show who is the beneficial owner of these shares.
This page is the most useful from their website in explaining how you could make a claim in the unlikely event that Freetrade were to fail.
Let me know if you have any questions!
Best,
?Tom
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