Online Stock Broker legal question

I'm thinking about switching to a cheaper online broker for ASX shares however are wary about the potential of collapses like BBY, Halifax, Sonray Capital, Opes Prime, etc.

Broker - CHESS sponsored holdings linked to your HIN, so I'm not worried about losing shares if they go under. The potential risk I'm seeing is the cash sitting in the trading account & if funds are pooled together.

Their site says (I changed their name to Broker):

Are there any risks people see to the cash sitting in the trading account in the above scenario?

 

bare trust means its your money but in their name. Still a risk if the trustee breaches their duties and has no assets.

 

Commsec by default has a fee free CBA CDIA linked account. eg Commonwealth Bank holds cash and Commsec is just trading and the default settlement can be the CDIA so it draws proceeds. If you bank with CBA there is no transfer limit between CDIA and that account. This limits this concern. Transfers generally occur in real time using OSKO subject to transfer limits. Putting cash back after sales may require a manual transfer daily. At worst the transfer may take a few hours but is generally in real time. While CBA arent obliged to guaanatee Commsec there would be some problems for a bank if it didnt support its own subsidiary broker.

Trust accounts are not Govt guaranteed and there are numbers of cases where trust accounts were not correctly maintained. Claiming APRA is somehow involved seems a dubious claim to give legitimacy. APRA regulate financial institutions, not bank accounts individually. I would always want to own the account for cash and not be held by an institution for my money.