Where brokers keep our stocks?

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  1. #1

    Join Date
    Jul 2019
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    Where brokers keep our stocks?

    I light of recent events and since I am by nature a bit of a paranoid, I was wondering what will happen in the worst-case-scenario where Chinese impact full control over HK.

    Currently I hold foreign stocks (mainly US) in local banks/brokers - including HSBC, CIti and IBKR.
    If local Chinese laws will be enforced on HK, including capital control, will I be able to move these stocks outside of HK?
    Does IBKR hold the stocks here or in the US (and only the bookkeeping is local)?

    Thanks!


  2. #2

    Join Date
    Mar 2010
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  3. #3

    Join Date
    Dec 2002
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    I think you're looking at this in the wrong way from many different angles.

    - At the highest level, if the worst case scenario happens, your stocks might be worth nothing. So, no point worrying about that scenario. We're talking about a completely broken down law and order situation here. Watch the a zombie movie then a purge movie and finally hunger games and see if anyone in those movies was concerned about where their investments were being held.

    - Remember that most money flows back to the house of "In god we trust" so....

    At a regulatory level, worth looking at the individual brokerages and banks and seeing where your account / sub-account is. While opening an account with entity A, you might have filled up a few forms and might have actually opened multiple accounts in HK, UK, US etc.

    The easy answer would be Broker A holds stocks Custodian B in country Z. But the real answer is in the forms that you signed and the fine print.

    The more difficult answer - ask your broker or bank a few questions - who is the custodian for my stocks, where are they held, are they in individual accounts at the custodian or are they in a common name account (assigned to the broker).