Section 1: General Terms
Section 2: Platform Terms
Section 3: Stocks and Shares ISA
Section 4: Summary of Conflicts Management at Wombat
Section 5: Custody Terms
Section 6: Order Execution Policy
Section 7: Client Investments and Risks
Section 8: Glossary
1.1 In these Terms, references to “Wombat”, “us”, “our” and/or “we” means Wombat Invest Ltd. References to “client”, “you” and/or “your” means any person who opens a Wombat Account(s) with us.
1.2 In these Terms, to a “Wombat Account(s)” means the account we will open for you which will enable you to set aside money to invest through the Mobile Application (the “Mobile App”) which allows us to provide the Wombat Services.
1.3 These Terms contain important information regarding the services that we provide to you so, for your own benefit and protection, please read these Terms carefully before accepting them. If there is anything contained in these Terms that you do not understand, please do not hesitate to get in touch with us. You can email us at: firstname.lastname@example.org. A glossary of defined terms used in these Terms is set out in Section 8.
2.1 These Terms, together with:
(a) the information we have provided to you via the Mobile App about our services and our charges; and
(b) the information you have provided to us via the Mobile App and/or any other permitted means under these Terms in relation to your Wombat Account(s) constitutes the agreement (“the Wombat Agreement”) between you and us in the provision of our services to you.
2.2 Wombat Invest Ltd (FRN: 955775) is authorised and regulated by the Financial Conduct Authority. Our registered address is at 71-75 Shelton Street, Covent Garden, London, United Kingdom, WC2H 9JQ (Companies House Company Registration no. 10966427).
3.1 The Wombat Agreement will be legally binding when you accept these Terms. However, we will only start to provide our services to you after we have notified you that your Wombat Account(s) with us has been opened and, accordingly, those terms relating to your Wombat Account(s) will only be Applicable after that time. The Wombat Agreement has no minimum duration period.
3.2 The Wombat Agreement is governed by the laws of England and Wales. If any provision of the Wombat Agreement is or becomes invalid or unenforceable, the relevant provision will be treated as if it were not in the Wombat Agreement, and the remaining provisions will still be valid and enforceable.
4.1 You may cancel your Wombat Account(s) at any time.
5.1 Should you have any complaints in relation to the services provided by us then please notify us by email at: email@example.com. We will acknowledge your complaint promptly and arrange for the matter to be investigated in accordance with the rules of the FCA (the “FCA Rules”) and report the results to you.
5.2 If your complaint is unresolved or not settled to your satisfaction within 8 weeks from the date you first made the complaint, you may refer it directly to the Financial Ombudsman Service (“FOS”). The address of the FOS is Exchange Tower, London E14 9SR. You can also telephone the FOS at: 0800 023 4 567, or email the FOS at: firstname.lastname@example.org. You can find out further information about the FOS on its website: www.financial-ombudsman.org.uk.
6.1 Wombat is covered by the Financial Services Compensation Scheme (“FSCS”).
7.1 Services provided to you under the Wombat Agreement will be on the basis that Wombat will treat you as a Retail Client under the FCA Rules. This means that you are entitled to certain protections that are required to be provided to Retail Clients under the FCA Rules and under applicable laws.
8.1 We will provide services (the “Wombat Services”) to you in connection with the setup and operation of your Wombat Account(s) including the following:
8.1.1 the provision of the Mobile App or, in the unlikely event that the Mobile App is not available, such alternative means as we may specify from time to time to allow you to:
184.108.40.206 open your Wombat Account(s), purchase Investment Products and manage your selected investments;
220.127.116.11 receive your instructions to transact in investments in accordance with the investment selections you have made through your Wombat Account(s);
8.1.2 the provision of information about your Wombat Account(s), Investment Product(s) and investments held by the relevant Issuer for the benefit of your Wombat Account(s) (including the value of your portfolio);
8.1.3 the provision of the Round Up Services (as described in more detail below) and other features and services as we may specify from time to time that help you to make decisions and place instructions with or through the Mobile App in relation to your savings;
8.2 We will provide the Wombat Services to you in accordance with the Terms of the Wombat Agreement, all applicable laws and the FCA Rules.
8.3 We will do our best to ensure the Mobile App and your Wombat Account(s) is available and up and running for you to use at any time however, this is not something we can guarantee. There may be times where the Mobile App and your Wombat Account(s) may not be available and where we may not be able to facilitate your investment instructions. There may be interruptions and/or delays to our services. If this happens, we will do our best to contact you to let you know what you should do. You can also contact us by email at: support@Wombatinvest.com.
8.4 We may suspend the operation of our services where we consider it necessary, including (but not limited to) where we have to suspend operations for technical problems, emergencies, maintenance, regulatory reasons, where we decide it is sensible for your protection, in periods of exceptional trading activity or to ensure the continued availability of other services. If this happens, we will do our best to contact you to let you know what you should do.
If You open a Wombat Instant Account with Wombat Invest ltd, you not only agree to these Terms & Conditions laid out by us, but you also agree to the Terms & Conditions set out by our partners. By opening a Wombat Instant Account, you will automatically become customers of Drivewealth and Currency Cloud Links to their Terms are below:
For the DriveWealth Customer Account Agreement, click here.
For the DriveWealth Limited Purpose Margin Agreement, click here.
For the DriveWealth Limited Disclosures, click here
For the DriveWealth Limited Tax Disclosures, click here
Payment services are provided by The Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199)
9.1 Through any of your Wombat Account(s)s you are able to self-select and invest in a number of investment products (the Investment Products) that we have arranged to make available to our clients. Please see the FAQs for more information about the Investment Products. Please note, however, that we do not provide financial advice to our clients and we will never make recommendations based on your personal circumstances. If you are not sure whether the Wombat Account(s), the Wombat Services, or the Investment Products are suitable for you then we recommend that you seek advice from a qualified financial adviser.
9.2 Prior to making any decision to invest you must read the relevant documentation such as the “Key Investor Information Document” or “KIID” relating to the relevant Investment Product (if applicable). Documents such as the KIID contain important information of which you should be aware. You can access the documents such as the KIID via the Mobile App. You can also refer to the relevant Issuer’s website for relevant documentation.
9.3 We will not provide nor be responsible for providing you with any financial, legal or tax advice.
10.2 Wombat will provide you with secure access your Wombat Account(s). You must keep your details safe and confidential and notify Wombat immediately if you think that someone else may know these details and/or may have unauthorised access to your Account (otherwise in accordance with these terms).
10.3 You must not undertake any action that could compromise the security or effective working of the Wombat Services. Any such action will be considered a material breach of these Terms.
10.4 You are responsible for monitoring your Wombat Account(s), ensuring that you read all messages that have been sent to you (whether through the in-app secure notification centre, via the email address you have provided to us, or via any other means as agreed between us) and informing us if there is something wrong on your Wombat Account(s) or you suspect that it has been subject to unauthorised use.
10.5 You may download or print information and documents that we provide to you strictly for personal use provided that you keep intact all copyright and proprietary notices, but you must not otherwise reproduce or distribute any material without our consent.
11.1 You are able to link your Nominated Bank Account and fund your account directly from our mobile application using Open Banking. Your Nominated Bank Account must be in your name and be the same bank account as recorded in Wombat’s database. If you wish to change your Nominated Bank Account you will be able to do so but any outstanding payments will need to be paid off. We use a tool provided by TrueLayer Limited (www.truelayer.com) ("TrueLayer") to link your Nominated Bank Account account to your Wombat Account(s) and to initiate payments from your Nominated Bank Account. When you link an account or initiate a payment via Open Banking, you will be redirected to your bank by Truelayer in order to authenticate yourself. When you link an account or instruct a payment via our app using TrueLayer, TrueLayer's terms of service (“Terms of Service") will apply.
12.1 You may select to utilise our Round Up Services or any similar service which we may offer from time to time through the App (our “Round Up Services”) to help you make contributions to your Wombat Account(s) based on your spending. These Round Up Services involve the provision of information to you about transactions undertaken on your selected bank account(s) and/or debit/credit card account(s) you hold with third party issuers (“Connected Accounts”). In order for us to provide the Round Up Services, you will need to give to us, Truelayer and/or any other service provider we may appoint from time to time in connection with the Round Up Services (the “Round Up Service Provider”) certain authorities and other information in relation to those Connected Accounts which could include passwords and other security information (“Account Credentials”). This enables us and/or the Round Up Service Provider to access your Connected Accounts on a “view only” basis in order to collect information and data about the transactions on your account (“Account Information”). We and/or the Round Up Service Provider will collate the Account Information and make it available to you securely via the App in order to help you make investment decisions and place instructions with us.
12.2 You should check with the provider(s) of your Connected Accounts about the impact your use of the Round Up Services may have on the provision of its services to you. In particular, you should check whether your use of the Round Up Services (and, in particular, the disclosure to us and/or the Round Up Service Provider of your Account Credentials) could result in you breaching the terms and conditions of your Connected Accounts or otherwise adversely affect or invalidate any claim you may otherwise have against the provider of your Connected Accounts in the event you suffer fraud or similar losses in respect of your Connected Accounts. Subject at all times to paragraph 12.9 below and paragraph 19 (liability), neither we nor our Round Up Service Provider accept any liability for any losses you may suffer or incur as a result of your use of the Round Up Services and any adverse impact on any claims you may otherwise have against the issuer of your Connected Accounts. By selecting to use our round up functionality you:
12.3 By selecting to use our Round Up Service you are entering into a legally binding agreement under the terms of which you licence us and the Services Provider to use any information, data, passwords, materials or other content (collectively, “Content”) we obtain or collate through your use of the Round Up Services in accordance with this paragraph 12. We and the Round Up Service Provider may use, modify, display, distribute and create new material using such Content to provide the Services. We and the Round Up Service Provider may also use, sell, license, reproduce, distribute and disclose to any Wombat affiliate or third party, aggregated non-personally identifiable information that is derived through your use of the Round Up Services. By submitting Content, you automatically agree, or promise that you and/or the owner of such Content has expressly agreed that, without any particular time limit, and without the payment of any fees, we and the Round Up Service Provider may use the Content for the purposes set out above.
12.4 By selecting to use our Round Up Services you hereby authorise us and the Round Up Service Provider on a continuing basis to access third party sites designated by you, on your behalf, to retrieve information requested by you (or on your behalf), and to register for accounts requested by you. For all purposes hereof, you hereby grant to us a limited power of attorney, and you hereby appoint us and the Round Up Service Provider as your attorney and agent, with full power of substitution and resubstitution, for you and in your name, place and stead, in any and all capacities, to access third party internet sites, servers or documents, retrieve information, and use your Account Credentials, all as described above, with the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with such activities, as fully to all intents and purposes as you might or could do in person.
12.5 You acknowledge and agree that each time we or our Round Up Service Providers use your Account Credentials to access and obtain Account Information from third party sites, we and our Round Up Service Providers are acting as your agent and not the agent or on behalf of the third party. You agree that third party account providers shall be entitled to rely on the foregoing authorisation, agency and power of attorney granted by you. You understand and agree that the service is not endorsed or sponsored by any third-party account providers accessible through the service.
12.6 Subject at all times, you expressly understand and agree that your use of the Round Up Services and all information, products and other content (including that of third parties) included in or accessible from the Round Up Services is at your sole risk. The Round Up Services are provided on an “as is” and “as available” basis. Wombat and the Round Up Service Provider expressly disclaim all warranties of any kind as to the Round Up Services and all information, products and other content (including that of third parties) included in or accessible from the Round Up Services, whether express or implied, including, but not limited to the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
12.7 Subject at all times Wombat and the Round Up Service Provider make no warranty that (i) the Round Up Services will meet your requirements, (ii) the Round Up Services will be uninterrupted, timely, secure, or error-free, (iii) the results that may be obtained from the use of the Round Up Services will be accurate or reliable, (iv) the quality of any products, services, information, or other material purchased or obtained by you through the Round Up Services will meet your expectations, or (v) any errors in the technology will be corrected. Any material downloaded or otherwise obtained through the use of the Round Up Services is done at your own discretion and risk and you are solely responsible for any damage to your computer system or loss of data that results from the download of any such material. No advice or information, whether oral or written, obtained by you from either Wombat or the Round Up Service Provider through or from the Round Up Services will create any warranty not expressly stated in these terms.
12.8 Subject at all times you agree that neither Wombat nor the Round Up Service Provider nor any of their affiliates, account providers or any of their affiliates will be liable for any losses whether direct, indirect, incidental, special, consequential or exemplary damages, including, but not limited to, damages for loss of profits, goodwill, use, data or other intangible losses, even if Wombat or Round Up Service Provider has been advised of the possibility of such damages, resulting from: (i) the use or the inability to use the service; (ii) the cost of getting substitute goods and services, (iii) any products, data, information or services purchased or obtained or messages received or transactions entered into, through or from the service; (iv) unauthorized access to or alteration of your transmissions or data; (v) statements or conduct of anyone on the service; (vi) the use, inability to use, unauthorized use, performance or non-performance of any third party account provider site, even if the provider has been advised previously of the possibility of such damages; or (vii) any other matter relating to the service.
12.9 Subject at all times to paragraph 12.10 below and paragraph 19 (liability),You agree to indemnify and keep indemnified Wombat and its respective affiliates from any and all third party claims, liability, damages, expenses and costs (including, but not limited to, reasonable legal fees) caused by or arising from your use of the Round Up Services, your breach of these Terms (insofar as they relate to the Round Up Services) or your infringement, or infringement by any other user of your Wombat Account(s), of any intellectual property or other right of anyone. You agree in accordance with paragraph 26 (Third Party Rights) that the Round Up Service Provider is a third-party beneficiary of the above provisions, with all rights to enforce such provisions as if the Round Up Service Provider were a party to this Agreement.
12.10 The provisions contained in this paragraph 12 shall only apply to the extent such provisions may be Applied without Wombat being in breach of any applicable laws or being in breach of any rules, principles or directions of any applicable regulator including, without limitation, the FCA. All statutory rights that are or may be available to clients as against either Wombat or the Round Up Service Provider in respect of the provision of the Round Up Services are preserved and shall remain unaffected.
13.1 Before we can open your Wombat Account(s) and provide the Wombat Services to you, we are required to verify your identity in accordance with UK anti-money laundering legislation. We will use various third-party services to do this and you expressly authorise us to do this acknowledging that this will involve us transmitting your personal information to such third parties and potentially carrying out credit checks which may affect your credit score.
13.2 You warrant and represent to us on an ongoing basis that:
You are aged 18 or over; and
You are not a U.S Person.
13.3 You agree to notify us immediately if any of the above warranties cease to be correct.
13.4 Purchasing and/or contributing to Investment Products may be single or regular. These investments may be made only by Direct Debit or SEPA instruction provided to Wombat via the Wombat Account(s), or as otherwise prescribed in the specific terms relevant for each Investment Product. Investing may be subject to certain minimums. We may change the minimum investment amount from time to time and will notify you.
13.5 Payment for the Investment Products will be debited from your bank account via Direct Debit or SEPA, using an authorised payment institution (API) who provides Wombat with payment services. You will be informed (via the Wombat in-app secure notification centre or e-mail) of the details of the Direct Debit or SEPA on the day that we have advised the Bank to request payment from your bank. Once cleared, the money will be credited to your Wombat Account(s) and held in accordance with Section 2 (Platform Terms).
14.1 We may communicate with you at any time using the information you have given us, including, when appropriate, by telephone, SMS text message, by email and via the Mobile App.
14.2 It is your responsibility to ensure the contact information we have for you is up to date. In particular, you must ensure we have a current and valid email address for you so that we can notify you when important documents are delivered to you via the Mobile App. You accept that where either we are required to provide you with written notice then this will be given to you by means of electronic correspondence.
14.3 We cannot guarantee that electronic communications will be successfully delivered, or that they will be secure and virus free. Save where we have been negligent or where we have breached applicable law or the FCA Rules, we will not be liable for any loss, damage, expense, harm or inconvenience caused as a result of an email being lost, delayed, intercepted, corrupted or otherwise altered or for failing to be delivered for any reason beyond our control.
14.4 We may record and monitor telephone conversations that we have with you for training purposes and quality control, for crime prevention, and to provide a record of our discussions with you. We will store recordings for a period required by law, the FCA Rules or for as long as we consider necessary to be able to provide the Wombat Services to you. In the event of a disagreement between you and us, we can give you a copy of our records on request.
14.5 All communications in relation to the services provided under this Agreement will be in English.
15.1 When you use and interact with the Mobile App to select and/or make changes to your Wombat Account(s), and/or indicate your intention to purchase an Investment Product(s), such use and interaction will constitute your instructions to us.
15.2 You understand that, in certain circumstances, we may generally restrict or suspend your access and use of the Mobile App. In particular, you should note that we may take this action where:
we reasonably believe that the security of your Wombat Account(s) has been compromised; and/or
it is illegal or against any relevant rule or regulation for instructions to be sent to the manager of the Investment Product.
15.3 Please note that Section 2 of these Terms sets out our obligations and duties with respect to your Investment Products. You acknowledge and agree that all instructions and authorisations given by you in relation to the Investment Products and the investments made in respect of your Wombat Account(s) must be sent by you personally and by no other person.
15.4 You acknowledge and agree that all instructions are effective when they are received by us.
15.5 When receiving and transmitting instructions from you to buy and/or sell your investments, we shall apply our Order Execution Policy which is set out in Section 6 of these Terms. By entering into the Wombat Agreement, you agree and consent to our Order Execution Policy.
15.6 Where a delay occurs in transmitting an instruction due to factors outside of our reasonable control (including, without limitation, where the Mobile App is unavailable) we will ensure that your instruction is executed as soon as possible. However, we will not otherwise be responsible for any delay. In such circumstances please contact support@Wombatinvest.com.
16.1 We may use your personal information, including sensitive personal information and store it on our systems and may otherwise process it for the purposes of providing the Wombat Account(s) and the Wombat Services. By accepting these Terms, you agree that we may also provide you with marketing materials and other information regarding any of our other products and services from time to time, that we think may be of interest to you. If you do not wish to receive such materials, please contact us at support@Wombatinvest.com. We will not at any time (without your consent) share or provide your personal information to any third party for that party to market its services and products (or the services and products of any person unconnected with us).
16.2 We may pass personal information relating to you to third parties appointed by us for the purpose of administration and verifying your identity (as described in paragraph 12 above) and you confirm that you accept and consent to this. We may need to seek additional information from you in order to verify your identity, in which case we may:
delay the opening of your Wombat Account(s); or
withhold from you the ability to trade or redeem your money or otherwise use your Wombat Account(s) until we have successfully verified your identity.
16.3 We are registered with the Information Commissioner for the handling and processing of personal information and shall comply at all times with applicable data protection legislation. We will take all reasonable steps to ensure that the database containing this information is constantly updated and is securely protected against unauthorised entry and that personal information is kept strictly confidential.
16.4 We may disclose your personal information if we are required to do so by law or we are requested to do so by the FCA, or any other relevant regulatory authority in any country.
16.5 Your personal data may be transferred to third parties outside the EEA as well as within it, solely in connection with our provision of the Wombat Account(s) and the Wombat Services. You should be aware that in territories outside the EEA, laws and practices relating to the protection of personal data are likely to be different and, in some cases, may be weaker than those within the EEA. Where transfers outside of the EEA are necessary, Wombat complies with the stringent safeguards to protect your personal data required by law. By entering into the Wombat Agreement, you consent to such processing of your data.
16.6 You are entitled to see all personal data relating to you, which is held on any database controlled by us. Please contact support@Wombatinvest.com for details.
17.1 If you wish to make a Cash Withdrawal you must provide instructions via the Mobile App. Cash Withdrawals can only be made if you have a sufficient cash balance in your Wombat Account(s) to satisfy the Cash Withdrawal instruction amount. You may have to sell an Investment Product, in order to meet withdrawal requests. but you should note that the process of selling investments may take some time, depending on the settlement dates of those investments.
18.1 We are responsible for providing to you all contract notes in respect of all investment transactions carried out in the Investment Products by you via the Wombat Account(s) and all reports that are required to be provided to you in accordance with the FCA Rules - including valuation reports (the “Reports”). These Reports will include details of all transactions during the relevant period, details of the contents of your Wombat Account(s), the current market value and the basis of valuation, income and fees charged.
18.2 We will make daily valuations of your Investment Products available to you via the Mobile App.
18.3 You agree that we shall provide the Reports to you via the Wombat Services.
18.4 By entering into the Wombat Agreement you agree and consent to the electronic delivery of contract notes and Reports and all other information required to be provided to you under those Agreements.
19.1 We or anyone connected with us, may carry out certain transactions for you where we, or another client of ours, have a duty that may conflict with our duty to you. Where a potential conflict of interest arises, we will take all reasonable steps to protect your interests and ensure fair treatment in accordance with the duties we owe you as our client. We have procedures in place to handle such conflicts of interest and to ensure that we act appropriately. It is our practice to disclose the nature of all conflicts of interest to you and (if appropriate) ask for your permission to continue with the service.
19.2 Our Conflicts of Interest Policy is detailed in Section 4. This sets out the types of actual or potential conflicts of interest which may arise given the nature of our business and provides details of how these are managed. Further details and updates of this policy can be provided on request.
20.1 Subject to the FCA Rules, we shall not be liable for any losses suffered by you unless such loss arises from our negligence, breach of the Wombat Agreement, wilful default or fraud or from our failure to comply with applicable laws or the FCA Rules.
20.2 We will not be held liable for any loss incurred by you which arises, either wholly or in part, as a result of an event which is beyond our reasonable control to prevent and the effect of which is beyond our reasonable power to avoid in relation to your Wombat Account(s) and which may arise from delays or changes in market conditions, market fluctuation, currency fluctuation, computer failure, labour dispute, inability to communicate with you, or for any other reason and whereby we are either unable to take or refrain from taking or shall not be obliged to take or refrain from taking any action as a consequence thereof.
20.3 We will take reasonable care and exercise reasonable due skill, care and diligence in the assessment, selection and appointment of the agents and other third parties. We accept responsibility for any losses, damages or costs suffered or incurred by you to the extent these are caused by our negligence, wilful default or fraud in the assessment, selection or appointment of such persons. We will not be responsible in any other circumstance for the acts or omissions of any such third parties.
20.4 We do not accept responsibility for any loss, damages or costs you may incur as a result of:
20.4.1 any cause beyond our reasonable control to prevent (as described in paragraph 19.2 above);
20.4.2 our taking any action, or omitting to take any action, to the extent we are required to do so under applicable laws and regulations, the FCA Rules and/or at the direction of a competent regulator such as the FCA.
20.5 No provision of the Wombat Agreement will restrict, qualify or exclude any duty owed to you under applicable laws relating to the provision of services or under the FCA Rules. For further information about your rights under these applicable laws contact your local Citizens’ Advice Bureau.
21.1 We may appoint another person or entity (“Delegate”) to perform all or part of the Wombat Services Agreement, provided that we take all reasonable steps to ensure that such Delegate is suitably competent and qualified to do so. Where we appoint a Delegate:
22.1 Where Appropriate, we may offer to refer you to third parties to provide certain additional services. We will not make any such referral without your agreement.
22.2 We may pay (or receive from third parties), fees in relation to referrals of business. In making or receiving any such referral and making or receiving such payments, we will act in accordance with the FCA Rules and all applicable laws.
23.1 We may amend the Wombat Agreement:
23.1.1 if we are required to do so to comply with the FCA Rules, or any other applicable law or regulation;
23.1.2 to reflect changes in the costs and expenses that we incur (or reasonably expect to incur) in providing the services to you, including to take account of changes in the rates of inflation, taxes or interest;
23.1.3 to make these terms fairer to you or easier to understand, or to correct mistakes;
23.1.4 to reflect changes in market practice or conditions;
23.1.5 to enable us to make reasonable changes to the way we provide our services as a result of changes in the financial services sector, technology, or available products; and
23.1.6 to reflect changes to our arrangements with any of our service providers.
23.2 If we propose to make a change to these Terms that is not detrimental to you, we can make the change immediately. We will make information available to you about the change within 14 days of the change.
23.3 If we make a change to these Terms that may be detrimental to you, we will provide you with at least 14 days’ prior notice (unless we are required to make the change sooner, for example, for legal or regulatory reasons, in which case we will make information available about the change within 5 days of making the relevant change).
23.4 If we make any change that is detrimental to you, you may notify us within 14 days from the date of such change to terminate your Wombat Agreement and close your Wombat Account(s) without charge.
24.1 You may terminate your Wombat Agreement at any time and for any reason by providing us with notice, subject to the settlement of all outstanding transactions. Transactions already in progress will be completed in the normal course of business. We will close your Wombat Account(s) as soon as practicable after receiving your notice to terminate the Wombat Agreement.
24.2 Our fees (as set out in the Mobile App) shall continue to Apply until the later of the date of the termination of the Wombat Agreement or the settlement of all outstanding transactions in respect of your Wombat Account(s).
24.3 We may terminate this Agreement at any time by giving you 30 business days’ prior notice subject to the settlement of all outstanding transactions.
24.4 We may terminate this Agreement immediately and freeze your Wombat Account(s) without giving you advance notice if we reasonably believe that you:
24.4.1 have materially breached any of the terms of the Wombat Agreement or have otherwise provided us with false or misleading information;
24.4.2 are using, or allowing another person to use, your Wombat Account(s) illegally or for criminal activity;
24.4.3 have behaved in an inappropriate manner (for example, if you abuse any of our staff);
24.4.4 have failed to pay any of the amounts owed under the Wombat Agreement; or
24.4.5 have become bankrupt, insolvent or you are unable to pay your debts as they fall due.
24.4.6 we may also terminate the Wombat Agreement immediately if we reasonably believe that providing you with a service exposes us to action or censure from any law enforcement, government or regulatory body (including, without limitation, the FCA);
24.5 Where we terminate the Wombat Agreement immediately or freeze your Wombat Account(s) as set out above, we may inform you in writing immediately of our decision and our reasons for making that decision, we reserve the right not to advise you of the reason for freezing the account, if we are required not to inform you for regulatory or legal reasons.
24.6 On termination of the Wombat Agreement (for any reason), we will sell your assets and transfer your cash as you reasonably request. If you make no reasonable request, we may, at our discretion, take steps to realise your assets and to transfer your cash to you or take advice from HMRC as to the Appropriate steps in the circumstances. We reserve the right to withhold any cash that may have been rewarded to you as part of a promotional offer and you have not abided by the terms and conditions,
25.1 You do not have the right to assign or otherwise transfer to any other party your rights or obligations under the Wombat Agreement.
25.2 We may assign our rights and obligations under the Agreement at any time without your consent to:
another entity within our group; or
to a third party outside of our group where we reasonably consider that the transfer will not compromise your rights under the Wombat Agreement and the services to be provided to you.
25.3 Unless it is impracticable in the circumstances, we will give you 30 days’ prior notice of any such assignment.
25.4 If we assign our rights and obligations, you may notify us within 30 days from the date of such assignment to close your Wombat Account(s) without charge.
26.1 The Wombat Agreement and any dispute or claim arising out of or in connection with it (including non-contractual disputes or claims) will be governed by and construed in accordance with the law of England and Wales.
26.2 The parties irrevocably agree that the courts of England and Wales will have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with the Wombat Agreement (including non-contractual disputes or claims).
27.1 Save for TrueLayer Ltd, Seccl Custody Ltd, Currency Cloud Limited and DriveWealth LLC and any other relevant Service Provider who may enforce, as applicable, the provisions of paragraph 11, a person who is not a party to this agreement cannot enforce or enjoy the benefit of any term of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
Section 2 - Platform Terms
Please note that this is an important document that sets out how your Wombat Account(s) is operated. It sets out the terms and conditions for the Investment Products. It should be read as part of the overall Terms.
1.1 In accordance with your instructions and your selections, we shall provide the Investment Products and shall provide receipt and transmission services in relation to these Investment Products (together, the “Platform Services”).
1.2 We will at all times provide the Platform Services to you in accordance with the terms of the Wombat Agreement, all applicable laws and all applicable FCA Rules.
1.3 If you materially breach these Terms then we reserve the right, without further notice, to realise your Investment Products, withdraw access to the Platform Service, or any combination of these.
1.4 We do not provide advice about our products or allowable investments. The Investment Products are only available to direct investors. If for any reason you are unsure about or do not understand these Terms or any other aspect of the products or services then you should seek appropriate financial advice and/or contact Wombat to discuss before making any commitment.
1.5 There is a minimum commitment required for each Investment Product which will be detailed in the relevant Investment Product page in the Mobile App. We may change the minimum value from time to time and will notify you of any such change. Any recurring contributions to the Investment Products be maintained above the minimum value of £10.
1.6 The Investment Products are only available through the Wombat Services; accordingly, all reports and documentation will be provided to you for access via the Mobile App. By subscribing to take out an Investment Product, you agree that you do not require us to provide reports, statements, contract notes or other documentation associated with your Investment Product other than in electronic form via these means. You must also keep up to date contact details so that we can notify you when any important documents are sent via the Wombat Services.
1.7 You accept that where we are required to provide you with written notice then this will be given to you by means of electronic correspondence as set out above.
1.8 There may be circumstances that require us to review these Terms and the charges being made. In this event, we will notify you advising you of any amendments to these Terms at least 14 days prior to the change taking effect. However, we reserve the right in extreme circumstances to vary these Terms with shorter notice e.g. a change to an existing, or implementation of a new regulatory requirement which we have to action immediately.
1.9 Value added tax and all other applicable taxes will be levied on all Appropriate expenses and fees at the prevailing rate.
1.10 We have categorised you as a Retail Client for all purposes of the FCA Rules. As a Retail Client you will benefit from the greatest level of protection available under the regulatory system.
2.1 You may transmit Orders for Investment Products once we receive all necessary information from you or when our other requirements have been met if this is later.
2.2 You may not purchase an Investment Product if you are a U.S. Person (as defined by the US Internal Revenue Service). If at any point you become a U.S. Person then you must immediately inform us and we will require you to exit your Product(s).
2.3 When you choose to purchase a new Investment Product you must initially commit the minimum amount required, as detailed above. This amount must be in your Wombat Account(s).
3.1 All monies received in respect of your Investment Products will be held in a Client Money Bank account until the Order is executed.
3.2 We will be entitled to dispose of any purchase Orders if required to do so by the terms of any agreement to which we are a party. We will make all reasonable endeavours to inform you of such an event in advance, where feasible.
3.3 We will place an electronic copy of your statement detailing the investments on your Investment Product(s) in the relevant area of the Wombat Mobile App.
4.1 Provided, in doing so we act at all times in accordance with all applicable laws and the FCA Rules, we may reasonably reimburse ourselves in respect of the liability, charges or costs by way of making a charge against your Investment Product(s) and/or Wombat Account(s) as we may reasonably determine which we have incurred as a result of one of the following events occurring: 1. we become liable to pay any tax or levies imposed on your Investment Product(s) or on any contribution paid by you; or 2. we become liable to make any other payment to the UK Government or any governmental agency or any such self-regulatory organisation, to the extent directly or indirectly attributable to your Investment Product(s).
4.2 These paragraphs 4.1 and 4.2 will not Apply to the extent that the relevant event is attributable, directly or indirectly, to any fraud, negligence, wilful default or regulatory breach by us.
4.3 If we omit to deduct all or part of any charges from your Wombat Account(s) on the due date, we shall not subsequently be prevented from deducting such amounts or exercising any available remedy as a result of that omission.
4.4 We may also deduct money from your Wombat Account(s) and/or sell any of your Investment Product to realise cash if an Investment Product has been credited in error.
4.5 Charges, costs and liabilities which Wombat is entitled to charge you will be paid from your Wombat Account(s) and/or Investment Product(s). If at any time the cash balance on your Wombat Account(s) is not enough to cover all such charges, costs and liabilities in full, we may: dispose of Investment Products at our discretion and without liability in order to pay the amounts due; or require you to pay us the amounts due.
4.6 If we dispose of your Investment Products in accordance with paragraph 4.5 of this Section 2 then we will, ordinarily, sell your investments to meet the amount due starting with the largest holding by value.
4.7 We may sell slightly more of your investments than is needed due to: The fact that we cannot know the exact price at which the investments will be traded and any excess will be held as cash on your Wombat Account(s); or the requirement to maintain a minimum holding value for each investment.
4.8 If for any reason the value of your investments is insufficient to meet any such fees, charges, expenses or tax payable, you agree to pay us on demand the amount of any such shortfall.
5.1 We are responsible for executing any Order we receive from you via the Wombat Services.
5.2 You may only place Orders via the Wombat Mobile App. If this is unavailable for any reason, please contact support@Wombatinvest.com.
5.3 You are responsible for the accuracy of your Orders. You will not be able to cancel or change an Order after you have submitted it.
5.4 You must have sufficient balance on your Wombat Account(s) to execute any Order that you place together with any related charges.
5.5 We reserve the right for any reason to refuse to execute an Order but we will act reasonably in so doing. There may be circumstances, including (without limitation) suspension of dealing in extreme market conditions in which we may not be able to execute an Order. We will, if possible, notify you of the reason. Provided we have acted reasonably, then we will not be liable for any loss or profit forgone between the time an Order was received and when it was executed, if ever.
5.6 We reserve the right to cancel or reverse an Order if a direct debit order fails resulting in not enough cash being available in your Wombat Account(s) to fulfil the order obligation. You will be liable for any loss that results from such a failure.
5.7 We may combine your Order with other clients’ Orders if we reasonably believe that this will not be to your disadvantage. We may have to execute your Order in tranches and provide an average price per Order.
5.8 You must notify Wombat if you receive confirmation of an Order which you did not place or which has not been completed in accordance with your instructions.
5.9 We will send to you contract notes (via the Wombat In-App message notification centre) confirming the details of your transaction by the end of the Business Day after we receive it from the relevant Issuer.
6.1 If you instruct us to disinvest any of your Investment Product(s) then we will continue to act upon other Orders that you provide to us (via the Wombat Services), including the collection of Direct Debits and SEPA.
7.1 We may use your personal information, including your sensitive personal information, and store it on our systems and may otherwise process it for the purpose of the administration of your Investment Product(s).
7.2 We may pass personal information relating to you to its associates or the bank for the purpose of administering your Investment Product and verifying your identity and by executing your Orders in the Investment Product(s) you confirm that you accept and consent to this. We may also need to seek additional information from you in order to verify your identity, in which case we may: delay the execution of your Order or withhold from you the ability to trade or disinvest any Investment Products until we have successfully verified your identity.
7.3 We are registered with the Information Commissioner for the handling and processing of personal information and shall comply at all times with the relevant data protection legislation. We will ensure that the database containing this information is constantly updated and is securely protected against unauthorised entry and that personal information is kept strictly confidential and will not be passed to any third party for marketing purposes without your written consent.
7.4 We may disclose personal information if required to do so by law or are requested to do so by the FCA, or any other relevant regulatory authority in any country.
7.5 You are entitled to see all personal data relating to you, which is held on any database controlled by us.
7.6 By investing in an Investment Product you freely consent to the processing and disclosure of your personal information in accordance with these Terms.
8.1 We cannot guarantee that access to, or trading in, your Investment Product(s) via the Wombat Services will be available at all times or without delay. You acknowledge that the service may be interrupted and the services available may be variable in certain circumstances.
8.2 We may suspend the operation of our service where we considers it necessary, including (but not limited to) where we have to suspend operations for technical problems, emergencies, maintenance, regulatory reasons, where we decide it is sensible for our client’s protection, in periods of exceptional trading activity or to ensure the continued availability of other services.
8.3 We will not be liable to you if their systems or services are unavailable to you for trading or information purposes for whatever reason.
9.1 By placing Orders you agree that you will not take part in activity which may be considered market abuse. You agree that you will not in any way engage in market abuse or require or encourage others to do so. If you are uncertain as to whether your dealings or proposed dealings are lawful, you should take legal advice. If we have reason to suspect that your use of the Wombat Service constitutes market abuse, we reserve the right to take any action deemed to be Appropriate. This action will include but is not limited to, refusing to act on your instruction and in such circumstances, we are not obliged to provide you with reasons for our actions.
10.1 We may appoint any person to advise on or perform any of our functions or responsibilities under these Terms. This contract may be assigned in whole or in part, but only if this does not offer you a poorer service and if your rights are not prejudiced by the assignment. Any group company shall be entitled to enforce provisions of these Terms which shall Apply to it as if it were a party to the contract.
11.1 An “Event Beyond Our Control” means any act or event beyond our reasonable control, including without limitation strikes, lock-outs or other industrial action by third parties, civil commotion, riot, invasion, terrorist attack or threat of terrorist attack, war (whether declared or not) or threat or preparation for war, fire, explosion, storm, flood, earthquake, subsidence, epidemic or other natural disaster, or failure of public or private telecommunications networks.
11.2 We will not be liable or responsible for any failure to perform, or delay in performance of, any of our obligations under these Terms that is caused by an Event Beyond Our Control. If an Event Beyond Our Control takes place that affects the performance of our obligations under these Terms, we will notify you as soon as reasonably practicable and our obligations under these Terms will be suspended and the time for performance of our obligations will be extended for the duration of the Event Beyond Our Control.
11.3 You may terminate the contract if an Event Beyond Our Control takes place and you no longer wish us to provide the Wombat Service.
12.1 These Terms, as amended, will continue to apply until the provision of your Investment Product(s) is terminated. All charges or fees due up to the date of termination must be paid. Termination shall be without prejudice to the completion of transactions already initiated by us on your behalf.
12.2 If we terminate or suspend the provision of your Investment Product(s) then we reserve the right to disinvest all investments and hold the proceeds in cash pending receipt of instructions from you.
Section 3 – Stocks & Shares ISA
Terms 7, 8, 9, 11, 15 also apply to your Standard and Instant General Investment Account(s)
1.1 These Specific Terms apply to the Stocks & Shares ISA. In the event of any conflict between these Specific Terms and the General Terms in Section A, these Specific Terms will apply.
1.2 In the event of any inconsistency between these Specific Terms and the provisions of the ISA Regulations, the latter will prevail.
1.3 Seccl Custody Limited is the ISA Manager and will administer the Stocks & Shares ISA in accordance with the ISA Regulations and these ISA Terms and Conditions. You will provide us with all information that we may reasonably require to enable Seccl Custody Limited to carry out their duties as an ISA Manager.
1.4 We shall be able to delegate any of our functions or responsibilities, provided that it is to a person or organisation whom we are satisfied is competent and authorised to perform those functions or responsibilities.
1.5 You must have a valid subscription for the purpose of HMRC ISA Regulations. Should any payment transaction fail, the instruction must be unwound. If you have already invested, all Account transactions will be transferred to an Investment Account, pending payment.
2.1 There are two types of subscription that we can accept:
2.2 The maximum annual subscription into an ISA is subject to the maximum as outlined in ISA Regulations. This maximum annual subscription amount may be varied in accordance with the ISA regulations as amended from time to time.
2.3 To subscribe to a Stocks and Shares ISA you have to be an individual aged 18 or over and be resident in the UK for tax purposes. Crown employees, such as diplomats or members of the armed forces, who are working overseas and paid by the Government are eligible to open an ISA and their spouses or civil partners can also open an ISA.
2.4 If you open an ISA in the UK and then go to work/live abroad, you cannot continue adding money into the ISA (unless you are a Crown employee working overseas or the spouse or civil partner of a Crown employee working overseas). Your ISA will remain and, on your return, you can start putting money in again (subject to the normal annual limits).
2.5 You will be required to make a declaration that the information contained in your application for a Stocks & Shares ISA is correct.
2.6 We reserve the right to require proof of status and eligibility for an ISA before accepting any application.
2.7 We do not provide or offer access to Cash ISAs through our Service. Cash can, however, be held tax-free in your Stocks & Shares ISA Account.
2.8 You have not subscribed and will not subscribe more than the overall annual subscription limit in total to a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA and a Lifetime ISA in the same tax year.
2.9 You have not subscribed and will not subscribe to another Stocks and Shares ISA in the same tax year that you subscribe to this Stocks & Shares ISA.
2.10 If you make regular subscriptions you agree that you will continue to make subscriptions into a subsequent tax year unless you advise us otherwise. However, if there is a gap where you have not subscribed in a complete tax year you will be required to complete a new ISA Declaration when reinstating your subscriptions.
Additional Permitted Subscriptions
2.11 If you are over 18 and the surviving spouse of a deceased ISA holder who died on or after 3rd December 2014, you can pay in additional subscriptions on top of the annual subscription limit up to the value of the deceased’s ISA at the date of their death, provided you have not transferred these rights to another ISA Manager. You can pay in additional permitted subscriptions as a single lump sum or a series of lump sums.
2.12 You can pay in additional permitted subscriptions provided:
» You were living together at the date of the deceased ISA holder’s death.
» Any cash subscription is paid within 3 years of the date of the deceased ISA holder’s death, or if later 180 days of the administration of the estate being completed.
2.13 Additional permitted subscriptions do not count towards the subscription limit and are treated as previous year ISA subscriptions for all purposes.
2.14 We will accept the transfer of additional permitted subscription rights from other ISA Managers.
3.1 Your Stocks & Shares ISA will begin once you have completed your application and we have confirmed our acceptance. These Specific Terms will come into effect on this date.
3.2 We reserve the right to decline an application for a Stocks & Shares ISA at our discretion and without giving you any reason for doing so.
3.3 You undertake to inform us of any changes to the information given in your application or transfer form in respect of the Stocks & Shares ISA or if any of the declarations contained in your application in respect of the Stocks & Shares ISA cease to be true. You agree to immediately inform us in the event of your ceasing to be eligible to subscribe to or to hold a Stocks & Shares ISA.
4.1 You are able to cancel your Stocks & Shares ISA up to 30 days after the successful completion of your online application (your “cooling off period”). However, if you have asked us to invest your cash within the cooling off period, your Assets will be sold and the proceeds returned to you at their market value less any dealing or fund manager charges.
4.2 You may choose to keep your Stocks & Shares ISA in cash for the 30 days of your cooling off period, and if you then decide to cancel your Stocks & Shares ISA, you will receive back the original amount.
4.3 If you do not cancel within the 30 days, your right to withdraw money from, or close your Stocks & Shares ISA will be as set out in these Specific Terms.
5.1 You must make payments into the Stocks & Shares ISA with your own money. Your payments must not go over the limits laid down in the ISA Regulations. You commit to making a continuing subscription for contributions across tax years so that you can continue with your Account in accordance with the ISA Regulations.
5.2 The minimum Stocks & Shares ISA subscription is £10 lump sum or £10 per month. You can make lump sum payments or regular contributions. You can make a lump sum payment by bank transfer or regular contributions by direct debit.
5.3 If you do not pay into your Stocks & Shares ISA during a tax year and want to pay in during a following tax year, you will need to make a fresh ISA Declaration before we can accept your further payment. Transfers into your Stocks & Shares ISA
5.4 We will accept the transfer of Cash into your Stocks & Shares ISA from an ISA held by another ISA Manager.
5.5 You may transfer in either a Stocks and Shares or a Cash ISA into our Stocks and Shares ISA. You may transfer some or all of any previous tax year subscriptions, however any current tax year subscriptions must be transferred in full.
5.6 Transfers will be free of charges. However, there may be a charge levied by the existing ISA Manager, please contact them directly for more information.
5.7 We reserve the right to refuse to accept any asset which we believe is not a Qualifying Investment under the ISA Regulations or which is not available for you to buy within the APP
6.1 The categories of Assets permitted as Stocks & Shares ISA Assets are described as ‘Qualifying Investments’ by the ISA Regulations and HMRC. The specific Assets available within the Stocks & Shares ISA can be viewed via the Mobile App.
6.2 All Stocks & Shares ISA Assets must be Qualifying Investments.
7.1.1 Standard Accounts; The title to your Stocks & Shares ISA investment will be registered in the name of SECCL’s nominee, Digital Custody Nominees Limited. If applicable, any share certificates will be held by the relevant custodian appointed by our nominee.
7.1.2 Instant Account - DriveWealth custodies Securities and Other Assets held in your Instant Account at approved Depository Trust Company Custodians (“DTC Custodians”). DriveWealth holds all positions in nominee name with the DTC Custodians; DriveWealth maintains all records related to the holdings in your Account.
7.2 ISA Assets will be, and must remain in, the beneficial ownership of you as the investor, and must not be used as a security for a loan.
8.1 We will not normally forward you copies of annual reports and accounts, key investor information documents or meeting and voting information issued by companies, or managers, unless otherwise agreed with you, including the rate of charges to apply for such a service.
8.2 We will not exercise any voting rights attached to your Stocks & Shares ISA Assets, unless we have agreed this with you including the rate of charges that may apply for such a service.
9.1 Any distributions, dividends, interest, tax credits, Discounts or other proceeds received in respect of the Stocks & Shares ISA will be credited to the cash balance in your Stocks & Shares ISA.
10 Tax treatment of Stocks & Shares ISA
10.1 No tax is payable on any income received and any gain arising on investments held in your Stocks & Shares ISA.
10.2 Where income tax has been deducted from any UK income, we will reclaim tax from HMRC on your behalf where appropriate. The tax reclaims will be paid back to your Stocks & Shares ISA Account.
10.3 The tax treatment of your Stocks & Shares ISA will change if the Stocks & Shares ISA becomes void or is in need of repair e.g. if you move overseas and continue to contribute or you have subscribed to another ISA in the same tax year in breach of the ISA Regulations.
10.4 We will, in accordance with the ISA Regulations, make reclaims, conduct appeals and agree on your behalf, liabilities for and relief from tax in respect of the Stocks & Shares ISA. You authorise us, as ISA Manager, to provide HMRC with all applicable details of your ISA.
11.1 The charges for all transactions that take place on your Stocks & Shares ISA are set out in the Charges Schedule.
11.2 We will give you at least 14 days’ written notice of any change in our charges. If we change our charges you can transfer your Stocks & Shares ISA free of charge to another ISA Manager registered by HMRC under the ISA Regulations and suitably authorised under FSMA.
12.1 You have the right to transfer your Stocks & Shares ISA at any time to another Stocks and Shares or Cash ISA Manager. On receipt of a written request from you and within the time stipulated by you, but not less than within 30 days, all of your ISA shall be transferred to another ISA Manager in accordance with ISA regulations relating to transfers.
12.2 We do not offer partial transfers out.
12.3 The amount to be transferred may be affected by any money we keep under Clause 14 of this Section 3.
13.1 You have the right to close your Stocks & Shares ISA at any time. On receipt of instructions from you and within the time stipulated by you, all or part of the Assets held in the ISA and proceeds arising from those Assets shall be transferred or paid out to you.
13.2 We will transfer your Assets to you via an In Specie Transfer where requested to do so.
13.3 You will no longer be exempt from tax on the Stocks & Shares ISA Assets once we have transferred these to you via In Specie Transfer.
14.1 We are entitled to use any cash in your Stocks & Shares ISA or sell any of your Stocks & Shares ISA investments:
14.1.1 to pay charges; and
14.1.2 to pay any tax, liabilities or other amount necessary to HMRC or other government agency in relation to your Stocks & Shares ISA.
14.2 If you are transferring your current tax year’s Stocks & Shares ISA, or part or all of a previous tax year’s Stocks & Shares ISA to another ISA Manager and we do not know how much the tax or other amount will be, we may keep an amount of cash that we feel is reasonable and appropriate.
15.1 If you die, we will deal with your Stocks & Shares ISA as instructed by your personal representatives. They must first prove they have authority to give us this instruction.
15.2 They can ask us to sell the Stocks & Shares ISA investments and pay the proceeds to them in cash, or to transfer the Stocks & Shares ISA Assets to them.
15.3 Any ISA tax benefits will cease on your death and we will manage any tax due to HMRC from the date of your death.
16.1 Subject to the Applicable Law, Seccl Custody Ltd may terminate their role as the ISA Manager at any time by giving you written notice. At least 30 days written notice will be given and shall be without prejudice to the completion of orders already initiated.
16.2 During the notice period you can transfer your Stocks & Shares ISA to another ISA Manager under Clause 7.1 of this Section 3. If you do not transfer your Stocks & Shares ISA during the notice period, we may then close it and return the value to you. We may make an In Specie Transfer of any non-cash Assets to your new ISA Manager (subject to them agreeing such a transfer) or we may sell any such Assets and return the proceeds to you together with any cash balance and net of any amount which we keep under Clause 8 of this Section 3.
16.3 We will notify you if by reason of any failure to satisfy the provisions of the Applicable Law, the ISA has or will become void. As soon as practicable thereafter, we will provide your options available i.e. to transfer the Assets to your name, retain your Assets within an Investment Account or redeem your Assets and issue the sale proceeds accordingly.
16.4 We will not be liable for any loss, liability or damage that you suffer as a result of our closing your Stocks & Shares ISA. We will give you all relevant information and certificates that you need relating to tax under the ISA Regulations.
17.1 We will notify you as soon as reasonably practicable if, by reason of any failure to satisfy the provisions of the ISA Regulations, your Stocks & Shares ISA has, or will become void.
17.2 If an ISA becomes void, we will transfer any applicable Assets into an Investment Account. We will deduct and return to HMRC sufficient Cash to cover any tax liability incurred in voiding the Stocks & Shares ISA Account.
17.3 In some instances HMRC may inform us to repair a Stocks & Shares ISA in whole, or in part. We will deduct and return to HMRC sufficient cash to cover any tax liability incurred in repairing your Stocks & Shares ISA. We may also be required to transfer applicable Assets into an Investment Account.
17.4 Where insufficient Cash is available, we will sell sufficient Assets, from the largest available daily traded holding downwards without notice, in order to pay HMRC any tax liability incurred. Where insufficient daily traded holdings are held, we will sell from the largest remaining available holding downwards.
17.5 We will write to HMRC where you have insufficient cash or Assets to cover any tax liability due to them. We will also write to you to in all instances to tell you what action we have taken to repair or void your Stocks & Shares ISA.
Section 4 - Summary of Conflicts Management at Wombat
1.1 Wombat is committed to maintaining the highest professional standards and, therefore, we endeavour to identify, consider and manage potential conflicts of interest to ensure that we treat all of our customers fairly and in accordance with FCA Rules and principles.
2.1 In essence, a conflict of interest is a situation in which Wombat (or any of its personnel) finds itself in a position where its own interests’ conflict with the duties and obligations owed to its clients or, a situation in which Wombat’s duty to one client conflicts with its duty to another. Identifying conflicts of interest for the purposes of identifying the types of conflict and potential conflicts that arise which may entail a material risk of damage to the interests of a client, we must consider whether Wombat or its directors, employees or contractors (“Wombat Personnel”) or any other person linked by control to Wombat:
3.1 We have identified a number of situations which may give rise to a potential conflict of interest. These situations include, but are not limited to, the following:
we receive gifts, entertainment or other monetary and non-monetary benefits from our service providers or business partners (for example, the Issuers of the Investment Products we make available to clients through the Mobile App), which could give rise to a conflict with respect to the duties that we owe to our clients;
Wombat Personnel who have outside commitments (e.g. directorships or other outside business interests) may be influenced to act in a manner that conflicts with the interests of Wombat or its clients; and where Wombat Personnel invest for their own account in certain investments which are retained as investments for client accounts.
4.1 We seek to organise our business in such a way as to avoid conflicts of interest arising.
5.1 For conflicts of interest which are unavoidable, we have put in place procedures which are designed to ensure that the management of any conflict takes place in such a way that Wombat (and its personnel) are not advantaged and that no client is disadvantaged. All of our employees are provided with training in these procedures and the standards of conduct expected of them. Wombat’s Board of Directors remains responsible for ensuring that such procedures are Appropriate and that employees act accordingly. Specifically, we have put in place the following procedures to assist in our identification and management of conflicts of interest:
6.1 If we are not reasonably confident that we are able to manage a particular conflict to adequately protect the interest of a client, the general nature and/or source of conflicts of interest will be clearly disclosed before we undertake any business. The following conflicts are managed through disclosure:
We may aggregate your personal data (including, if you sign up to the Round Up Service, your transactions) with that of other clients and license or sell it to third parties in anonymised form.
Section 5 - Custody Terms
1.1 Standard Account Custodian
Seccl Custody Limited are the Custodian appointed by Wombat Invest for assets held as part of your Standard Account(s).
Seccl Custody Limited (“SCL”) is authorised and regulated by the Financial Conduct Authority (FCA) registration number 793200 to provide financial products and custody services for the purpose of arranging, safeguarding and administering custody of cash and Assets. SCL is a wholly owned subsidiary of Seccl Technology Limited who are the provider of trading and settlement software for the services detailed. Both companies are registered in England, registration number and can be contacted at the following address: 5-7 Pulteney Mews, Bath, BA2 4DS
SCL have been appointed to provide the services detailed below. By agreeing to these terms, you are appointing SCL to act as your Custodian for the following:
1.1.1 Provision of ISA, and General Investment Accounts (GIAs)
1.1.2 Provision of cash payment services, asset price and information data.
1.1.3 Client money and asset reconciliation in accordance with the Client Asset Sourcebook of the FCA rules.
1.2 Instant Account Custodian
DriveWealth LLC are the Custodian appointed by Wombat Invest for assets held in your Instant Account(s).
DriveWealth, LLC is a New Jersey Limited Liability Company, who owns and operates the DriveWealth web site, the DriveWealth investing applications, partners.drivewealth.com, and other properties. DriveWealth, LLC is a registered broker dealer, member of FINRA and SIPC
DriveWealth have been appointed to provide the services detailed below. By agreeing to these terms, you are appointing DriveWealth to act as your Custodian for the following:
1.1 Provision of General Investment Accounts (GIAs)
1.2 Provision of cash payment services, asset price and information data.
2.1 Where the Wombat Invest provide a service to invest in cash and Assets that includes providing information and access to make informed investment decisions, the Custodian is authorised to ensure the custody of your cash and Assets are managed compliantly in accordance with the applicable regulations.
2,2 Any deposits or withdrawals of cash or instructions to buy, sell or transfer investments that you perform through the Wombat Invest, will be recorded and managed in accordance with the FCA's rules. These are detailed in the Client Assets Sourcebook (CASS). SCL and or DriveWealth will ensure any investment instructions are placed in accordance with our Order Execution Policy.
2.3 All client cash will be held with an approved Bank or CRD Credit Institution in a designated Client Money statutory trust account which is held separately from any monies held by either SCL (Standard Accounts) or Currency Cloud(Instant Accounts).
2.4 Standard Account Client Assets will be registered to Digital Custody Nominees Limited which is a wholly owned subsidiary company of SCL and which exists for the purpose of safeguarding and segregating your Assets from those of SCL.
Instant Account Client Assets will be held by DriveWealth, DriveWealth custodies Securities and Other Assets held in your Account at approved Depository Trust Company Custodians. DriveWealth holds all positions in nominee name with the DTC Custodians; DriveWealth maintains all records related to the holdings in your Account.
2.5 Your cash and Assets will be held in a pooled arrangement. This means that SCL, Currency Cloud (cash only) and DriveWealth will have records that identify your individual ownership and entitlement to Assets. For operational and servicing purposes it is more efficient for our third party providers to administer your investments on a pooled basis.
2.6 SCL and DriveWealth may have instances where they need to appoint third-party nominees or sub-custodians to maintain the custody services offered. By agreeing to these Terms, you authorise SCL and DriveWealth to do so.
2.7 In performing the custodian duties SCL and DriveWealth will use reasonable care and due diligence. Should SCL or DriveWealth go out of business your Assets would be held separately from those of SCL and DriveWealth. Should any shortfall of Assets arise as a result of SCL's, DriveWealth’s or a third-party nominee’s or sub-custodian's insolvency, these would be shared on a pro rata basis with affected clients.
2.8 Where SCL and DriveWealth receive income from your investments through dividend payments, fund distributions and corporate actions we will reconcile and credit these to your accounts.
2.9 As corporate action events arise, SCL and DriveWealth will inform you or the Wombat Invest where actions are applicable to your Assets.
2.10 SCL and DriveWealth will facilitate the transfer of cash and Assets on behalf of clients as directed and in accordance with Section A of the Wombat Invest's Terms.
3.1 Any client deposits or income will be credited to your respective account once it has been identified and reconciled with the date SCL and Currency Cloud were in receipt of monies.
3.2 SCL, Currency Cloud will not pay any interest on cash held in Client Money accounts. You will be notified by Wombat Invest of any changes should our policy on client interest change.
4.1 Settlement of Client Assets will accord with market best practice, where Assets are traded in ETIs, SCL and DriveWealth will normally operate on a delivery-versus-payment "DVP" settlement process. You permit SCL and to apply DVP transaction exemption as detailed in the FCA rules up until any delivery of asset (purchases) or cash (sales) passes the third working day, whereby SCL will follow Client Money and asset reconciliations in accordance with the FCA's Client Asset Sourcebook.
5.1 As stated in Paragraph 3, SCL, DriveWealth and Currency Cloud (Client Money only), will reconcile Client Money and asset reconciliations in accordance with the FCA's Client Asset Sourcebook.
5.2 For the avoidance of doubt, Client Money will be matched reconciled on a Business Day basis, Assets will be reconciled externally according to their type and registration.
6.1 We reserve the right to enforce the right of liens.
7.1 All communication with you will be in English through the in app message portal provided by . Wombat will provide quarterly valuation statements, annual consolidated tax vouchers for Investment Accounts and contract notes which will detail the buys or sells instructed on your account. It is your responsibility to sign-in and read this information and it is important you notify promptly of any errors or omissions in respect of the accuracy of these documents.
8.1 SCL have their own complaints policy. Should you have need to complain this should be raised with Wombat in the first instance. Should you not consider it appropriate to do this or the Wombat Invest is unable to meet their obligations, SCL can be contacted by email to email@example.com or by post to The Compliance Officer, 5-7 Pulteney Mews, Bath, BA2 4DS. firstname.lastname@example.org or by post to The Compliance Officer, 5-7 Pulteney Mews, Bath, BA2 4DS.
8.2 Should SCL fail to resolve a complaint to your satisfaction or they fail to do so within eight weeks of receiving your complaint, you can also direct your complaint to the Financial Ombudsman Service at Exchange Tower, London E14 9SR. Telephone: 0800 023 4567 or 0300 123 9 123; email: email@example.com; and website: www.financial-ombudsman.org.uk.
9.1 Custody fees for providing custody services are included in the service charges as detailed in Wombat’s charging schedule.
10.1 SCL, Currency Cloud and DriveWealth maintain a Conflicts of Interest policy which is independent of Wombat Invest. It is available by contacting the Wombat Invest @ firstname.lastname@example.org.
11.1 To the extent permissible under applicable law, neither you nor SCL, Currency Cloud and DriveWealth shall be responsible for any loss or damage suffered by the other party by reason of any Force Majeure Event. If such loss, damage or failure shall be caused by or be directly or indirectly due to a Force Majeure Event provided that each party shall, where the context permits, use reasonable endeavours to minimise the effects of the same and shall notify the other party of a Force Majeure Event or potential Force Majeure Event as soon as possible.
11.2 If a party is prevented from performing all or substantially all of its obligations under the Agreement by a Force Majeure Event for a continuous period of 30 days or more either party shall be entitled to terminate this Agreement immediately by giving written notice to that effect to the other Party.
1.2 Data Protection
12.1 In acting as your Custodian SCL and DriveWealth, will have access to the data you provide on application to the Wombat Invest service. In the Service Agreement between the Wombat Invest and SCL and Wombat Invest and DriveWealth, Wombat Invest and Currency Cloud all parties are joint Data Controllers and have independent Privacy Policies which summarise how we will use your personal information and with whom we share it.
12.2 SCL, DriveWealth and Currency Cloud will use your details for regulatory reporting purposes and will not use or share your information for marketing purposes.
13.1 SCL and Currency Cloud are covered by the Financial Services Compensation Scheme (FSCS). If SCL cease trading and cannot meet our obligations you may be entitled to compensation from the scheme up to a maximum of £85,000 (or such other value covered from time to time by the FSCS) for investment claims.
13.2 Further information about the compensation arrangements is available from the FSCS directly.
14.1 To provide custody and cash services SCL, Currency Cloud and DriveWealth may use the services of third-party services providers.
14.2 Examples include: Data and price feeds of Assets, the execution of trading instructions, clearing and settlement services, banking services, client verification, regulatory reporting, card payment services and the facilitation of automated transfer instructions.
14.3 Where services are provided by a third-party, SCL, Currency Cloud and DriveWealth will use reasonable care and due diligence in selecting them and monitoring their performance. Except for clause 2.4, SCL does not guarantee proper performance by the third-party and will not itself be responsible if a third-party provider fails to meet its obligations. This means that should the third-party default or becomes insolvent, you may lose some or all of their Assets and will not necessarily be entitled to compensation from SCL, Currency Cloud and DriveWealth. Including, in circumstances where it is not possible under the relevant national law and the registration under clause 2.6 to identify the Client Assets from the proprietary Assets of the third-party firm.
15.1 SCL, Currency Cloud and DriveWealth may terminate these Terms at any time by giving you 30 days’ written notice (subject to applicable law and regulatory requirements). There is no minimum duration of these Terms.
15.2 SCL, Currency Cloud and DriveWealth may also terminate these Terms with immediate effect by written notice if required to do so for legal or regulatory reasons or on instructions from the Wombat Invest.
15.3 In this event, the Wombat Invest will instruct SCL, Currency Cloud and DriveWealth where to transfer the Client Assets and Client Money. If the Wombat Invest does not do so promptly, or if the Wombat Invest no longer represents you, then you will on request give the relevant instruction. The Custodian will transfer Client Assets and Client Money in accordance with the relevant instruction or, if it is unable to obtain instructions, it will transfer them directly to you. These Terms will continue to apply until such transfer of the Client Assets and the Client Money is complete.
15.4 Accounts can be closed at any time by either the withdrawal of cash, or transfer of Assets.
16.1 If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.
17.1 If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.
18.1 This agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
18.2 You irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this agreement or its subject matter or formation.
19.1 SCL, Currency Cloud and DriveWealth will act with all reasonable skill, care and diligence in acting as your Custodian. SCL will be liable to you for any direct loss that is the result of negligence or failure by SCL to account for Assets in Accounts or through a breach of FCA rules, unless any such failure is the result of the acts or omissions of Customer or the Wombat Invest.
19.2 Nothing in these Terms and Conditions shall be read as excluding or restricting any liability we may have for death or personal injury
19.3 SCL, Currency Cloud and DriveWealth will not be liable for the following:
19.4 You accept and acknowledge that the internet and the telecommunication systems may be subject to interruption or failure through no fault of ours.
20.1 The section headings contained in this agreement are for reference purposes only and shall not affect the meaning or interpretation of this agreement.
Section 6 – Order Execution Policies
Order execution policy (Standard Accounts)
1.1 This document outlines our Order Execution Policy which details our obligation to You to obtain the best possible result (‘Best Execution’) when placing orders.
1.2 The following information is aimed at providing You with a general understanding of our typical dealing arrangements. These arrangements may vary for different categories of investment types and are described below.
1.3 In addition to the terms and conditions of the service we seek your consent for this policy and it will apply each time you place an order instruction.
2.1 Standard Accounts - We place all exchange traded orders (equities, investment trusts and exchange traded funds (ETFs) through Winterflood Business Services (WBS), they charge our Custodian for providing this service and they select the execution venues (from the factors detailed below) for where your orders are placed. The current venues for execution are detailed in Section 6.
2.1.1 For Unit Trusts and OEICs, they will generally be routed to the appropriate fund manager for execution at the next available valuation point for that particular fund. Clients’ orders may be aggregated as described in section 6.
2.2 Orders are only placed with WBS or fund managers on Business Days shortly after 15.00
2.3 Orders must be placed on the APP no later than 13.00 to ensure same day execution, trades placed after 13.00 we will use our best endeavours to place the trade the same day however there are no guarantees that it will be placed. Any orders not received before 13.00 will be placed with WBS or the fund manager on the next Business Day.
3.1 When executing orders, unless otherwise specifically instructed, WBS will use price as the primary measure for achieving Best Execution. The following execution factors will be considered, and how these may be considered as part of the decision-making process in the context of the details below (listed in order or priority for a typical trade). Their importance will vary depending on the characteristics of the order received from the client.
Price - Price will be determined with reference to the execution venues to which WBS connects and on which the security is traded. WBS use automatic execution technology which will source the best price from a range of retail service providers and market makers (see Section 6). Where an electronic price is not available the order will be dealt manually by WBS's dealing team.
Cost – for orders where brokerage or exchange fees are applicable, WBS will not seek to pass these on to you.
Likelihood of Execution and Settlement - Likelihood of execution is very high due to the relationships WBS has forged with its market maker and broker counterparties. Likelihood of settlement is difficult to assess pre-trade, but WBS monitors the settlement performance of each counterparty so there is a historical track record to base this decision on.
Size - The size of the trade in relation to the liquidity of the stock may have significant influence on the Best Execution process and is directly correlated to the market impact (implicit costs).
Nature - Consideration will be given to the liquidity of the stock on the order book at the relevant time. Execution may be heavily influenced by the level of on or off order book trading patterns in the stock. These factors plus the size of the order will determine the appropriate execution method. This may include the working of an order into the market place using an appropriate benchmark or immediate execution on an outright bid/offer price, for example.
Speed - The importance of speed of transactions will vary. For example, to reduce the implicit costs associated with market impact, an order might be worked over a day or more. Different order types and specific instructions may also have a bearing on the speed of execution.
Other Relevant Considerations – Careful consideration shall be given not just to each element in isolation, but also to the trade-off and interplay between these factors. For example, size against market impact or speed against price, any of which might also be influenced by a client’s specific instruction.
Non-UK individual shares are denominated in a currency different from that of your Wombat cash account which is GBP.
All valuations for Non-UK Individual shares will be shown in the App as GBP using a Foreign Exchange Rate provided by SECCL.
All buy and sell orders are placed in GBP on the App The GBP price is affected by the Foreign Exchange Rate which can fluctuate throughout the day. The GBP value of your shares will be affected by the Foreign Exchange Rate both negatively and positively.
When your order is placed with WBS they will execute a foreign exchange trade to enable the trade to be traded in the market in the underlying currency of the Non-UK share. Wombat reserves the right to charge a foreign exchange conversion fee of up to 1% of the GBP value of each order.
Where any additional information is required in relation to any order related to Non UK individual shares, such as tax information, you agree to provide that information to us promptly when we request it, and undertake to provide accurate, complete and not misleading information. Where this information is required to be provided before an order can be placed or executed, you agree to provide that information to us as a condition to us accepting the order for execution.
You should be aware that transactions in relation to Non-UK individual shares will be executed at such times as the relevant market dictates. These times may be different from the usual times at which transactions in relation to shares or funds will be processed and may be at times that differ from the usual cut-off time. As a result, there may be a difference in the price for the Non-UK individual shares at the time that your Instruction has been executed and the time that you have placed your Instruction.
You agree to complete any relevant tax documentation, including but not limited to a W-8BEN form for investment in United States-listed securities, when it is made available to you through our mobile application or our website and before giving any Instruction to trade in Non UK individual shares. The act of opening a Wombat Account(s) on the App you are also confirming that the information you have provided is sufficient for the fulfilment and completion of a W-8BEN. If You become a US person after your account has been opened, you must inform us immediately. This may result in your account being closed with any investments transferred out or liquidated and cash returned to you.
5.1 The following exchange traded order types are available:
6.1 Where you give us a specific instruction as to the execution of an order, we will execute the order in accordance with those specific instructions and you should be aware that doing so may prevent us from applying this policy to achieve the best results.
6.2 Where your specific instructions relate to only part of the order, we will continue to apply our order execution policy to those aspects of the order not covered by those instructions.
6.3 It may not always be possible to execute specific orders on your behalf
7.1 For Unit Trusts and OEICs client orders may be aggregated with other client orders and bulked prior to executing with the fund manager.
7.2 For exchange traded orders, WBS may combine client orders with orders for the account of other clients, or for its own account (including in relation to fractional orders). The aggregation of orders may operate on some occasions to a client’s (or its customers’) advantage and on some occasions to a client’s (or its customers’) disadvantage in relation to a particular order. The decision to aggregate will be taken in WBS’s sole discretion and where orders have been aggregated, they will be allocated to clients on a pro-rata basis in accordance with WBS’ order allocation policy.
7.3 Depending on price and the consideration received, the disaggregation of bulked proceeds may result in penny rounding differences which cannot be allocated at individual client level.
8.1 For Unit Trust or OEIC orders fund managers may levy an initial charge on purchase orders and there is a risk that fund managers apply a "dilution levy" to the order. This normally results where there are sizeable buy or sell orders in the market. This is an extra charge placed on the transaction and will be applied proportionately to an order placed.
8.2 Should this occur it will be clearly detailed as a percentage of your order on your contract note.
8.3 Please note such levies are outside of the control of the Wombat Invest or the Custodian.
9.1 For exchange traded orders, WBS may use one or more of the execution venues listed in Section 6 to enable it to obtain the best possible outcome on a consistent basis when executing an order on your behalf. WBS will regularly assess the execution venues available to ensure it is able to consistently obtain the best outcome for you.
10.1 We will monitor the effectiveness of our Order Execution Policy. We will notify you of any material changes where they are relevant to you. Any such changes will come into effect the next time that you trade using the service. If you wish to discuss the above or have any further questions, please contact us.
11.1 Our current execution venues are as follows:
11.2 WBS use the following Retail Service Providers (Market Makers/Brokers):
DriveWealth, LLC (“DW” or “DriveWealth”) provides execution by utilising the services of registered executing brokers. DW also operates a principal facilitation account, for the sole purpose of executing fractional share orders received on a share base and notional base. The procedures below discuss the process by which the firm oversees and evaluates the quality of execution provided by its executing brokers, as well as executions filled in a principal capacity.
In any transaction for or with a customer or a customer of another broker-dealer, a member and persons
associated with a member shall use reasonable diligence to ascertain the best market for the subject
security and buy or sell in such market so that the resultant price to the customer is as favorable as
possible under prevailing market conditions. Among the factors that will be considered in determining
whether a member has used "reasonable diligence" are:
(A) the characteristics of the market for the security (e.g., price, volatility, relative liquidity, and
pressure on available communications);
(B) the size and type of transaction;
(C) the number of markets checked;
(D) accessibility of the quotation; and
(E) the terms and conditions of the order which result in the transaction, as communicated to the
member and persons associated with the member.
Except as provided herein, a member that accepts and holds an order in an equity security from its own
customer or a customer of another broker-dealer without immediately executing the order is prohibited
from trading that security on the same side of the market for its own account at a price that would satisfy
the customer order, unless it immediately thereafter executes the customer order up to the size and at the
same or better price at which it traded for its own account.
The firm is responsible for conducting reasonable diligence on the order flow it receives and routes to
agents or executes in its principal facilitation account. The review is completed monthly, via the Best
Execution Committee, and includes all orders, for all correspondents that are routed and executed
internally. While there is no definition of Best Execution, the factors included in the Regulatory section
are commonly used factors to measure against. The objective of the review is to assess the execution
quality provided by its agents, and downstream execution venues in addition to execution provided by
Rule 5310 requires firms to use reasonable due diligence when determining the best execution of
customer orders. Various factors that impact this decision are considered during the best execution
committee meetings, including the characteristics of the market for the securities traded, the size of
orders, the fill rate of execution destinations, the cost of the execution, the percentage of orders filled at
or better than the NBBO and the accessibility of the quotation.
Pursuant to Rule 5310.09(c), DriveWealth routes its order flow to executing brokers that have agreed to
handle the order flow as agent on behalf of DriveWealth and its customers, and generally relies on its
executing broker’s regular and rigorous review. As part of DriveWealth’s best execution committee
meetings, statistical review is completed to ensure its executing brokers are providing best execution.
The review also contemplates the reasonableness and rigor of review completed by the executing
broker, and the results of the review are used to determine and/or change its instructions as to how the
execution broker should be routing DW’s order flow.
DriveWealth reviews its executing broker’s practices in this regard and ensures that adequate oversight
functions are in place to ensure compliance with the provisions of the Rule and to ensure order handling
for DW customer orders are in line with DW’s expectations. To accomplish this review, the firm
receives detailed monthly reports from its executing brokers, for all order flow, which demonstrates the
execution quality across the aforementioned criteria. The Best Ex Committee reviews the information to
identify whether downstream venues are providing quality executions, and if issues are identified,
DriveWealth will instruct its agents to route its orders to more desirable destinations.
For agency routed order flow, DriveWealth exercises reasonable due diligence on its executing brokers
by evaluating the criteria considered in making routing decisions to outbound destinations and relies on
its executing broker’s regular and rigorous review of its routing methodology to remain in compliance
with the Rule. While DriveWealth does not exercise discretion over its routed venues, DriveWealth does
oversee its agent’s regular and rigorous review, by periodically assessing its routing methodology logic
to ensure that DriveWealth’s agent’s methodology is inclusive and utilizes the industry standard factors
that reasonably demonstrate best execution and does not include logic that presents conflicts between
DW, the agent, and the customer (e.g. routing logic does not consider how much a venue is paying in
PFOF). Additionally, on a monthly basis, or as needed, DriveWealth receives Transaction Cost Analysis
(“TCA”) reports from its agents for all order flow.
For its principally facilitated orders, DriveWealth monitors executions by assessing the execution prices
compared to the NBBO at the time of execution.
Payment for Order flow may be received from its executing brokers, which may present an inherent
conflict between the firm and its customers. To address this perceived conflict, the firm uses the
execution quality reports, price improvement metrics and compliance with Reg NMS to determine if the
perceived conflict has materialized. In the event a realized conflict is observed (where payments are
received, but order execution quality is not as expected), DriveWealth will instruct its executing broker
to handle its customer and counterparty orders differently. Through its supervisory efforts over customer
order and execution, the firm is reasonable able to identify and modify its approach relating to its order
flow instructions. Finally, as part of the wholistic review of its executing broker’s handling of DW
orders, DW has reviewed its executing broker’s order handling practices to ensure they are properly
described and it is understood how they operate (as it relates to nature and types of orders sent to its
executing brokers), which includes obtaining confirmation that payment for order flow is not included
as parameter within its agent’s order routing logic.
Specific Reviews Completed by Committee
The Execution Committee utilizes the monthly and quarterly reports received from its agents, and
fractional share execution quality for all of DriveWealth’s executions. The review focuses on the overall
performance of DriveWealth’s agents, and uses the information provided to evaluate downstream
Fractional Share Trading Reviews – Best Execution
A. Rule Requirement Exemptions:
Rule 610 and Rule 611 do not apply to odd-lot orders or to the odd-lot portions of mixed-lot orders.
Rule 600(b)(8) defines “bid” or “offer” as the bid price or offer price for one or more round lots of an
NMS security. This definition is embedded in the definition of “quotation” in Rule 600(b)(62), as well
as the definition of “protected bid” or “protected offer” in Rule 600(b)(57). Consequently, trading
centers are permitted to establish their own rules for handling odd-lot orders and the odd-lot portions of
mixed-lot orders. For example, although trading centers are not required to handle odd-lot orders or the
odd-lot portions of mixed lot orders in accordance with the requirements for automated quotations set
forth in Rule 600(b)(3), they are free to incorporate such requirements in their rules if they wish to do
This concept extends to fractional share trading, as sub-odd-lot transactions are not marketable and
conforming to Reg NMS. Irrespective of the applicability of Reg NMS, the firm monitors for execution
quality pursuant to FINRA Rule 5310 and consumes the consolidated market data directly into its
internal OMS to provide fractional executions at the NBBO.
B. Dual-Capacity Trading (Whole Share with Fractional Share) Review
Due to the nature of notional based orders, the firm has implemented a reasonable process for evaluating
execution quality, as it relates to the different execution scenarios that it fulfills. Dual-capacity
transactions, which are defined as trades that amount to at least one whole share, with a fractional fill,
are reviewed as part of the agency TCA best execution review. When DW receives an order that
requires 1 or more shares to be routed to the street for execution, the street will return the street
execution price. Upon receipt, DW then applies the street side fill price to the fractional share, to
complete the order. Dual-capacity trades are reviewed as part of the routed order flow TCA review,
since the fractional component is filled at the street side price, which includes, among other things price
improvement (PI is applied to the factional share if obtained on the street side fill), and the NBBO, EQ
and midpoint analysis conducted on the street side fills (agency routes) would similarly cover the
fractional fill on dual capacity trades.
It should be noted that dws practice of filling orders at the street price for the whole share that is executed (in lieu of filling the fractional price at the market price when the whole share order is received back from the street), reduces possible negative outcomes for best execution (e. G. Latency considerations for the round trip dual-capacity) since the whole + fractional share fills are given the street price(nbbo or better).
C. Fractional only Execution Review:
DriveWealth has an oversight function to ensure that executions in fractional shares are at or within the NBBO price at the time of execution. DriveWealth’s fractional share facilitation account consumes the consolidated market data feed, in order to facilitate executions. The review of fractional share trades for execution quality is a comparison of the execution price to the bid/ask at the time the trade is tradeable (e.g. when the order is released from queue in the sequential order in which it is received). Fractional only transactions are not marketable and therefore, there is no opportunity to scan the market for price improvement opportunities.
Due to the nature of fractional share trading, as non-marketable orders, the firm has a tolerance in place which aligns with the “flicker” or “1 second window” exemption, which allows for some level of deviation from the NBBO in highly liquid and/or securities with fast moving quotes, which is considered as part of the execution quality review. The quality review will yield transactions that are deemed to be best execution follow-up items subject to potential remediation. To determine whether specific orders yielded require adjustment, the firm investigates the population from the quality review, and assess the securities, market condition, nature of the security and the pricing comparison from the NBBO to make a final determination as to whether any orders received execution not aligned with its Best Execution policy. The populations are discussed at the Best Ex committee meeting and where disposition is determined.
For agency and dual-capacity transactions the firm uses a TCA along with other metrics to evaluate the
quality of executions, as detailed below:
a) Transaction Cost Analysis
The firm’s primary oversight for agency routed orders is the utilization of TCA reports. The TCA
reports break the firm’s order flow down into security characteristics, fill rates, odd lots outside of the
daily reported range, price improvement, and fills at or better than the NBBO.
b) Fractional Only Shares
As mentioned in the fractional only section above, the firm primarily evaluates execution quality for
fractional only fills by comparing the price at the time of execution to the bid/ask (NBBO).
Additionally, the firm has two methods for reviewing latency, the first is a real-time transactional
blotter, which tracks all orders and includes latency metrics and has summary statistics for all order flow
to measure the latency of fractional only orders throughout the trading session.
APPENDIX to DW Execution Policy
Rule 606(a)1 U.S. Securities and Exchange Commission (SEC) Rule 606(a) requires all brokerage firms to make publicly available quarterly reports, broken down by calendar month, containing certain required statistical information regarding the routing of held, non-directed customer orders in Regulation NMS stocks and listed options. Rule 606(b)(3)1 Broker-dealers handle not held customer orders using various order handling and routing arrangements, including by using the services of another broker-dealer. In determining how to comply with the disclosure obligations of Rule 606(b)(3), a broker-dealer using another broker-dealer’s services must determine whether it has exercised “discretion” over the routing of not held customer orders. In the Adopting Release, the Commission stated that, “[i]f the broker-dealer exercises discretion with regard to how an order is routed and ultimately executed, such as (but not limited to) by determining particular venue destinations for an order, choosing among different trading algorithms, adjusting or customising algorithm parameters, or performing other similar tasks involving its own judgment as to how and where to route and execute orders, the broker-dealer must provide its customer the information required by Rule 606(b)(3.
With respect to the use of another broker-dealer’s algorithms, a broker-dealer exercises discretion when, upon routing an order, it chooses among different algorithmic trading strategies (e.g., volume-weighted average price, percentage of volume, implementation shortfall, etc.) or different levels of urgency (e.g., passive vs. aggressive). A broker-dealer also exercises discretion when, at any time prior to the routing of an order, it participates in adjusting or customising other algorithm parameters that could be material as to how, when and/or where to route and execute orders. As with the case of smart order routers, a broker-dealer also exercises discretion where there is an economic arrangement between two broker-dealers that affects the order routing or execution strategies utilised in the handling of not held customer orders.
The scope of Rule 11Ac1-6 is broader than the scope of proposed Rule 11Ac1-5. First, Rule 11Ac1-6 covers a wider range of securities. The definition of "covered security" in paragraph (a)(1) includes not only national market system securities (i.e., exchange-listed equities and Nasdaq National Market equities), but also Nasdaq
SmallCap equities and listed options.61 Second, the Rule applies to all broker-dealers that route orders on behalf of their customers. The term "customer order" is defined as any order to buy or sell a covered security that is not for the account of a broker-dealer. It excludes, however, any order for a quantity of a security having a market value of at least $50,000 for a covered security that is an option contract and a market value of at least $200,000 for any other covered security. Large orders are excluded in recognition of the fact that a general overview of order routing practices is more useful for smaller orders that tend to be homogenous.62
Sources1: SEC.gov, Responses to Frequently Asked Questions Concerning Rule 606 of Regulation NMS
The investments held for the benefit of your Wombat Account(s) will be made in shares, ETFs and Funds. There are a number of general risks associated with such investments - these are highlighted below.