DeGiro Stockbrokers – Everyday Value?

DeGiro

9 Responses

  1. Tod says:

    Hi Mike
    Read your article with interest.
    I’m a Brit living in Sweden.
    There has been a bit of comment about DeGiro on various Swedish financial blogs due to the low charges, folk are very wary due to lack of perceived financial protection in case they go bust.
    Looks worth a further investigation.

  2. Tod says:

    Hello Again Mike
    From their general conditions

    Article 9. Lending Securities
    9.1 Consent of Client
    Client hereby gives consent to DEGIRO to Lend the Securities which are the subject of a purchasing Order or which are held for Client by Beleggersgiro. At all times DEGIRO will be the counterparty in this respect to Beleggersgiro and as such will have the obligation to redeliver the Securities that are Lend. A brief clarification of Lending is given in the document Investment Services in the Investment Services Information. The applicability of Lending is further described in the document Profiles in the Investment Services Information.
    9.2 Security
    If DEGIRO Lends Out Securities, then no asset segregation will apply in relation to such Securities. Instead, Beleggersgiro will have a right of redelivery against DEGIRO. In order to fully cover the risk that DEGIRO will not be able to redeliver the Securities that are Lent, DEGIRO will procure that Beleggersgiro holds collateral to the amount of at least 104% of the value of the Securities that are Lent. This way, Beleggersgiro will in all situations as much as possible be able to meet its obligations to Client.
    9.3 Balance
    When DEGIRO Lends Out Securities, this does not change the Balance of Client with Beleggersgiro as, Client still holds a claim against Beleggersgiro expressed in the Securities that are Lent by DEGIRO. However, Beleggersgiro will not hold the Securities concerned at that moment but, instead, will hold (a security right on) money or other Securities as security. The Securities that are Lent will be allocated by DEGIRO pro rata to their holdings in such Securities to the customers for which Beleggersgiro holds or would have held the Securities on the account where the Securities were held or would have been held if they would not have been Lent.

    Any thoughts?

    • Mike Rawson Mike Rawson says:

      Hi Tod,

      Quite a mouthful, but I’m not sure what point you are making.

      It’s pretty clear that they lend out your stock (unless you have a Custody account). But when they do, then Beleggersgiro has to hold 104% of the amount lent in other securities.

      Could you be clearer about what you see as the problem?

      Thanks,

      Mike

      • Tod says:

        From online reading and I am no expert!!
        So I post this as a precis of online stuff that I’ve read.

        It seems that DeGiro has close links with hedge fund HiQ. They share the same office, same board members. I am not suggesting there is anything illegal They post collateral 104%. Problem arises when things go awry. Imagine they are on the wrong side of an extreme event. HiQ goes bankrupt, as does DeGiro. It’s not a bank, the losses have to be covered from somewhere. The retail stock portfolios will need to pay. In a sense, all retail investors combined are a safety cushion for the hedge fund. If this happens, the official reaction will be : it’s in the terms and conditions.

        • Mike Rawson Mike Rawson says:

          No mention of HiQ in your previous comment.

          The real question is whether Beleggersgiro is connected to DeGiro. That’s where the collateral is held.

          It shouldn’t matter who they lend the stock to. Have you any reason to think that Beleggersgiro is not independent?

          • Tod says:

            I can find very little info on beleggersgiro. I have no reason to suspect anything untoward .
            Just if it seems to good to be true it probably is.

  3. Leo Murphy says:

    Hi Mike,

    DeGiro launched in Ireland earlier this year. I read on a post that they wont / cant opt the investor into the script / DRIP dividend option on a stock even if its available. Have you heard the same ?

  4. I recently signed up to Degiro for their low transaction rates .. with my H&L account for longer term holdings. The only issue I had was to transfer money using Sofort from my Barclays current account.. I tried several times over a week – error after error.

    I contacted support and they told me to try a few days later, which I did – didnt work. Contacted support again and they finally told be that not all banks support Sofort, but they were not specific in saying that I could not use Barclays.

    In the end I gave up and had to use a standard bank transfer which took 2 days. Once the ££ was in, trading shares was easy enough.

    I guess in the future if I want a quick deposit, for a quick but – then this isnt going to be the site for me … i.e. deposit well ahead of time.

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DeGiro Stockbrokers – Everyday Value?

by Mike Rawson time to read: 5 min
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