Actually I'm interested in owning assets, stocks (or stocks instruments) and crypto. That's something which was unclear to me but I confirmed that in some cases your assets would be owned by the provider, that is, you won't be able to move them without paying some exchange fee and more importantly if the provider goes down it goes down with your assets.
Noob questions:
If I buy stocks and/or ETFs in Interactive Brokers, Degiro, UBS, PostFinance are these really mine? I mean, I expect I should worry only about the instruments I am going to buy not where I buy it (through which platform). For the future, how to transfer your stocks assets into another "house", I'm just curious.
How to really own crypto currencies, do I have to buy the hardware tokens and buy crypto using the associated applications? I have heard somewhere that it's possible to buy crypto on Binance than take it out from there into your personal hardware wallet, but again I didn't have time to find the details.
Ignoring crypto, where it's impossible to say because it isn't really regulated and the evidence suggests that even where it is the rules are dubiously applied (e.g. of crypto "exchanges" which have no proper wallet segregation, poor record keeping and even poorer continuity measures).
Trying to simplify, there are potentially four things here.
- account provider
- bank
- custodian
- issuer
The account provider are effectively just record keeping; your cash should be in a segregated account and your assets are held under your name.
The bank holds your cash - it may or may not be the same as the account provider (they may delegate this to a partner bank, or be a bank themselves). It should be protected according to normal banking rules.
The custodian holds the assets in your name, with an authorisation for your account provider to act as agent. Again they may or may not be the same as the account provider.
The issuer issues the instruments underlying the assets - you have nothing to do with them, that's what the custodian does where necessary.
To transfer assets you normally just fill in a form and send it to your existing provider; they then send the assets to the new account provider. In practice this means the custodian may move them to a different custodian for the new provider, and the agent is updated so the new provider can manage them. Your current provider will charge you, probably for each asset not by volume.
ps. custodians specialise in types of assets or regions etc, so you may be using more than one; you probably don't care, the account provider deals with this (and also has deals on pricing etc with the custodians).
Really thanks. That's the plain English explanation I needed!
Thanks, that was an option I considered. I tried to contact them by email but they never replayed back.
Just as a side note for those who could be interested , last time I had to deal with an italian mutual fund broker (Onlinesim) I had to declare I was not resident in a set of blacklisted countries ( CH was in the list ). Actually that aspect forced me to sell all my portfolio when I moved in CH.
swiss brokers have to keep a separate account at a custodian that has your name on it, so nothing happens if the broker just vanishes into thin air with all their records. You have your account with your stocks.
The US doesn't have that level of segregation AFAIK but they have SIPC which is really good to protect the small fish (500k of protection in case the broker enters liquidation).
I don't know what happens if a disgruntled programmer sells off a bunch of customer assets during a fast growth phase and the broker is not able to restore it and goes bankrupt. Those stocks were already gone before liquidation.
>I expect I should worry only about the instruments I am going to buy not where I buy it
I don't think it's that easy, but if you go with a swiss broker (expensive) or something serious like interactive brokers, there isn't too much worry. I still have my second and third pillars, I'm diversifying risk regardless.
>For the future, how to transfer your stocks assets into another "house", I'm just curious.
you can ask the broker to do it and it usually works but they charge money for it. Otherwise you can just sell and rebuy.
>How to really own crypto currencies, do I have to buy the hardware tokens and buy crypto using the associated applications? I have heard somewhere that it's possible to buy crypto on Binance than take it out from there into your personal hardware wallet, but again I didn't have time to find the details.
I have a low amount, I left them on the exchange. It's a big and popular exchange. You don't need any hardware to transfer them to a wallet AFAIK, but everything depends on you not losing the code and not having it stolen.
Sell and re-buy will cost more than an in specie transfer. As an example, UBS charge 100 CHF per position, which is going to be less than the combined sale and purchase fees in almost all cases.
Bullshit
Switzerland has very similar customer asset segregation laws as the US - https://www.fedlex.admin.ch/eli/cc/2009/450/en
US has SIPC on *top* of those laws to ensure the small fish get whole no matter what => it is a better jurisdiction for holding papers
... because UBS fees to liquidate the positions are usurious in the first place. A reasonably inexpensive broker will make selling and buying the preferrable procedure where there's no significant tax involved.
My layman understanding is that once you have your key (either printed, on file, or kept secure in a personal hardware wallet) you own your crypto no matter what, i.e. you can always use it out of blue at any other exchange without any formal transfer, etc., hence it's really borderless, untracked. There is many "easy to use" crypto exchanges which treat your crypto like a bank account, you never can get out your crypto without formally selling (paying fees and being tracked when you transfer out a fiat currency), and as a side effect if they vanish your crypto will vanish as well. That's easy to use but not what I'm looking for. I want to own my digital coins like owning bank notes of any fiat currency, just hope that my understanding is correct even though it seems harder to find out how and where to setup this.
I remember reading about such fine print here or there. Definitely I would not want to let the broker do shorts on my assets without my agreement and giving me a profit out of that. It's another matter if they break the agreement (break a law) and do shorts behind the scene anyway.
The broker won't do the shorts, they lend the stock to someone who does for a fee.
Thanks for the clarification! However I hope this is something I have to agree for first, isn't it?
T&C's of the broker, if they don't charge any custody fees you can guess the answer.