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Individual Client Segregation (ICS)
As part of our Share Dealing service, we carry out transactions in investments for you.
To settle some of the trades you place in UK shares and bonds, we use a Central Securities Depository (CSD). A CSD is a financial institution that holds investments, such as UK shares and bonds, and provides electronic settlement services for these investments. Using a CSD allows us to transfer your investments electronically to settle the transactions you instruct us to carry out.
To use the services offered by the CSD, we need to open accounts with them. The CSD holds your investments in one of our accounts. Our standard method is called Omnibus Client Segregation (OCS). This means we hold all customer investments in one pooled account at the CSD. Alternatively, we can use Individual Client Segregation (ICS), which keeps your investments separate from others at the CSD.
Under the Central Securities Depositories Regulation (CSDR), we must offer you the option of Individual Client Segregation (ICS) as an alternative to Omnibus Client Segregation (OCS).
You can add the ICS service to a Share Dealing Account or an ISA. We’ve compare OCS and ICS to help you decide. We have also created a document that details these factors, features, and costs. How we hold your assets at a Central Securities Depository (CSD) (PDF, 205 KB).
How we keep your assets safe across both OCS and ICS
Regulatory obligations require us to protect your cash and investments in two ways – by keeping them separate from our own (known as segregation) and by being part of the FSCS, or Financial Services Compensation Scheme.
Segregation of Assets
This means we keep your cash and assets separate from ours. This way, we can clearly identify what belongs to you. If we stop trading, we could return your cash and assets.
Your money is protected
The Financial Services Compensation Scheme (FSCS) protects up to £85,000 of the eligible money you hold with us.
Differences between OCS and ICS
These include:
- How we handle shortfalls in securities if we become insolvent and cannot address such shortfalls. The treatment of shortfalls differs between OCS and ICS. You can find more details in point 4.3 of our How we hold your assets at a Central Securities Depository (CSD) (PDF, 205 KB) document.
- Charges – An ICS account requires more time to set up and maintain, leading to additional costs.
Charges
If you choose the ICS service, you'll incur extra charges on top of the standard fees that all customers pay. The key charges are:
ICS Service – additional charges
- Set Up Fee - £1000
- Annual Charge - £6500
Plus, standard account charges
- No account opening charge
- £5 dealing commission per online trade
- Charges apply for other services. See our charges
The costs for the ICS service reflect the additional activities we need to complete to manage your account. Some usual activities must be done individually, so the account cost reflects this increased administration. The charges for the ICS service cover all the Share Dealing Accounts and ISAs you hold with Scottish Widows Share Dealing.
Ian, the ICS user
Ian has opened a Scottish Widows Stocks and Shares ISA and plans to trade periodically, making one trade per quarter. He’s decided to use the ICS service.
This year, Ian will pay:
|
Charge |
Amount |
|---|---|
|
Charge Account Opening Charge
|
Amount £0
|
|
Charge ICS set up charge |
Amount £1,000.00 |
|
Charge ICS annual service charge (Charged each October and pro-rated from account opening) |
Amount £6,500 per year |
|
Charge Online dealing commission (4 trades x £5.00 each) |
Amount £20.00 |
|
Charge Stamp duty (0.5% of £19,980 - his investments minus dealing commission) - |
Amount £99.90 |
|
Charge Total |
Amount £7,619.90 |
Ian’s investments total £20,000, so his charges represent 38.09% of this amount.
We want you to make an informed choice about how you’d like your investments to be held. Other providers may offer different ways to achieve Individual Client Segregation (ICS) that could be more cost-effective for you. One option is a Crest Membership Account. While we don’t offer this type of account, you can search for providers who do on the Personal Investment Management and Financial Advice Association (PIMFA) website at https://www.pimfa.co.uk/ in the ‘Managing Your Money’ section under ‘Find a Firm’.
How do I open an ICS account?
To add the ICS service to your account, you must complete two steps:
Step 1
Open a Share Dealing Account or Stocks and Shares ISA online
Your account won’t automatically include the ICS service until step 2 is complete. If you already have an account, you can skip to step 2.
Step 2
Complete and return the form
This form tells us to add the ICS service to your Share Dealing Account and/or ISA. Once we receive the form, we’ll collect the set up charge from your debit card within ten working days. After this payment is successfully collected, the conversion will take about 15 working days to complete. Unfortunately, if we can’t collect this payment, we won’t be able to offer you the service.
We’ll notify you when the conversion is complete, and the service is added. Until then, your account will operate as a standard account, with trades settling within Omnibus Client Segregation at the CSD.
Please send your completed form to:
Scottish Widows Share Dealing
12 Wellington Place
Leeds
LS1 4AP