What will happen if the broker (custodian) goes bankrupt? - Seedly
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jw

Asked on 24 May 2020

What will happen if the broker (custodian) goes bankrupt?

What will happen if financial institutions such as FSMone goes bankrupt?

Will my investment in the custodian be protected? What is the process of getting the investment back? Thank you in advance.

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Hi Jing Wei,

Under sections 16, 17, 26 and 27 of the Securities and Futures (Licensing and Conduct of Business) [https://sso.agc.gov.sg/SL/SFA2001-RG10], the gist of it is that the brokerage firm must keep customer assets in a trust account separate from the firm's own assets. These assets will be excluded from claims from creditors. That's the protection that is available for investors.

However with regards to the claim process, I'd imagine that each broker has their own set of processes, so I am unable to comment. Possibly you will get a certificate stating what you own, and with that, use it to transfer your holdings to another broker.

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jw
jw

26 May 2020

Thank you so much
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
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Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post