Being transparent has always been at the heart of what we do at Freetrade.
It's why more than 1 million of you choose to invest with us and play such an active part in our community.
Being open is more than clear pricing and updating you on product developments. You need to know how safe your money and investments are with us. We take this very seriously.
Offering low pricing and an easy-to-use product is amazing but our number one priority is ensuring your investments and money are safe.
Freetrade is regulated by the FCA
The Financial Conduct Authority (FCA) is our UK financial regulator. Freetrade is authorised by the FCA to provide investment services to clients, including to hold client assets.
As an FCA-authorised entity, Freetrade Limited is obligated to meet all of the rules and regulations in the conduct of an investment business set by the FCA and provide all of the client protections that those regulations require.
If you are interested in learning more about what the FCA does and how it affects Freetrade then have a look at our registration page on the FCA website.
We segregate client funds
This is important because it means we can’t use your money to cover our business expenses.
Freetrade also segregates client funds and assets so that they are not permitted to be used to pay off any creditors.
Your stocks are protected in nominee accounts or at approved third-party custodians
When you invest with Freetrade, any UK-listed stocks or ETFs that you buy are held in your name by Freetrade Nominees Limited, which holds stocks and ETFs, with you as the beneficial owner. The stocks and ETFs are held in CREST, which is the UK’s central security depository.
Freetrade Nominees Limited is a non-trading company. That means it can’t run up liabilities of its own and can be shielded from any liabilities that Freetrade Limited accrues.
All of this is done so that, in the unlikely event of Freetrade failing, the company’s creditors will not be permitted to use your investments to cover Freetrade’s liabilities.
When you invest in US-listed stocks, we hold them in custody at a third-party SEC-registered broker (the Security and Exchange Commission, which regulates US securities markets). Our customers’ stocks are held in a designated customer account at the broker, and cannot be mixed with Freetrade’s own assets or used to settle our debts. Similar to the UK securities being held in CREST, your US stocks are ultimately held in DTCC (Depository Trust & Clearing Corporation). Currently, some customers’ US stocks are still held by Freetrade Nominees Limited in CREST, but we are in the process of fully migrating US stocks to our third-party broker.
Freetrade is part of the Financial Services Compensation Scheme
Customers' accounts are covered by the provisions of the Financial Services Compensation Scheme (FSCS).
This means that in the unlikely event of Freetrade failing, together with a failure to safeguard your assets or some other failure, the value of your assets held with Freetrade is protected by the FSCS up to a maximum of £85,000.
It is worth bearing in mind that, while you are protected under the FSCS scheme as above, your investment might fall as well as rise due to movements in market prices and any such fall wouldn't be covered by the FSCS.
If you want to learn more about the FSCS and how it operates, you can visit the FSCS website here: https://www.fscs.org.uk/.
We may place a proportion of user funds into notice accounts
Placing some of the money you have with us into notice accounts will not impact your ability to deal with or withdraw funds from your Freetrade account. When you put money into your Freetrade account, you will be able to invest that same amount immediately.
Any funds placed in these deposit accounts are covered under the Financial Services Compensation Scheme (FSCS). The balance of funds in these accounts will be actively monitored and adjusted so as to not impact your day to day activity.
This does mean, in the unlikely event of Freetrade failing, it may take a little longer to return all of your funds.