So this might be a boring thread. But ive seen a common theme at another platform where people donât seem to have much of any understanding of how their assets are held and how orders are executed, and ive seen it here on occasion as well.
If youâve not, you really should read the terms and conditions as well as the execution policy. Might sounds boring, but this is your money, and it gives a decent layout of exactly whatâs going on. And you might be surprised by some of the terms, or what might be missing.
I encourage you to read these for the platforms you use.
The big one seems to be mis understand of how orders are executed as people have a idea in their head of how they think it should work but simply havenât read the execution policy so are just unaware of how their order will be executed.
Important imo as it means you know where you stand and know where to push back if there ever is an issue with an order.
Thereâs little information on what happens to idle accounts or whatâs happens upon death of a person. And the terms around closing accounts are very broad. I assume theyâll be updated as as far as Iâm aware Freetrade wonât be able to close and sell off assets in a SIPP and send them to a bank account? If they did theyâd put us in hot water with HMRC I would imagine.
Youâre quite right to raise this here and in other threads too, @Eden, so thanks. And itâs testament to how much interest and debate around your efforts have produced (ie, very little) that should be a concern.
I have jumped down the rabbit hole and (just) read the Order Execution policy (properly) and noticed the following concerning clause:
Under the FCA rules, we are required to obtain your prior express consent before we arrange for an order to be executed outside of a European trading venue. By consenting to this Order Execution Policy you express your consent to us arranging for your orders to be executed outside a European Regulated Market, MTF or OTF.
(Emphasis mine)
What is âexpress consentâ? To my mind, and from the little exposure Iâve had with this in the past when dealing with insurance companies, express consent is something more than a hidden clause within a legal document⊠more like a highlighted statement on the consent page; like, for instance, âYou consent to us auto-renewing your policy every year/monthâ, which has to be upfront and in your face.
I honestly donât remember seeing that. I stand to be corrected, of course.
What is not outlined in that policy is how we stand legally - are we within or without FCA protections?
Youâve pretty much got it.
Express consent is when you have taken some action to say (express) that you consent. It might be vocal, written, or by ticking a box.
When you open an account with Freetrade you have to tick a box expressing that you consent to the order execution policy. As the term in your quote says, by consenting to the execution policy you also âexpress your consent to us arranging for your orders to be executedâŠâ, effectively creating a chain of express consent from a single tick box.
The alternative is implied consent wherein the other party just assumes that they have your consent without you taking any action. E.g. most websites imply that they have your consent to process your personal data to target advertising just because you visited the website.
The inclusion of the word âexpressâ means that you need to have taken some affirmative action to express your consent. It is an explicit consent to that clause but not exclusive to other clauses. You can give explicit express consent to multiple clauses with a single action and thatâs what happens when you tick the box agreeing to the execution policy.
Also, any action can be taken as expressing consent as long as it is reasonably understood as an expression of consent. It doesnât need to be as explicit as writing out âI consent toâŠâ
If youâre at the checkout in a shop and wave your contactless debit card over the card reader, you are expressing your consent for the shop to charge your account for the amount stated in exchange for transferring ownership of the item that you are buying.
Affirmative action is a given, by nature of consenting; no need to mention âexpressâ in this context, unless it has additional meaning, IMO.
Then why is it not mentioned in every clause, unless it has additional meaning?
It seems to me the FCA may be saying to brokers that they must expressly state to their customers that orders to buy US equities are (possibly) outside the jurisdiction of the UK regulator and this must be communicated in an accentuated manner to gain special consent for this clause.
âExpressâ can mean several things in different contexts. In this context it appears to be meaning a strengthened, particular consent to this clause; after all, the implications are serious if you lose all your rights, therefore it makes sense for the FCA to ensure brokersâ clients expressly understand this.
In this context, âexpressingâ is a verb.
(Is it any wonder peoplesâ eyes glaze-over when it comes to these things! Anyway, probably one for the courts.)
The difference between implied and express consent is the check box. You had to tick a box to express your consent to this term. If you do not tick the box then Freetrade is not allowed to execute orders outside the UK even if you otherwise agree to the terms and conditions.
There is another term which specifies that there is a minimum order size of ÂŁ2. You did express your consent to that term but it is still legally binding and you cannot place a smaller order. That term did not exist last year and we had it imposed on us about 6 months ago without any existing members having to express any consent.
@rivorson is correct in his description. Express consent is where you take an action to indicate consent to the company. As compared to implied consent where you may not have to given specific consent
To express means to manifest in some way. So for example they will ask for consent to execute orders in line with their policy and you say âyes I consentâ
Implied consent may be someone just assuming because you were in the building you were consenting to something new without your affirmative expressed consent.
More for my own documentation than anything Iâm just adding a link to my thread on how fractionals are handled as it includes a link to the answer from Freetrade