Consumer Protection
Safe - Secure.
Both Jersey and the Isle of Man have a depositors’ compensation scheme that will partially compensate depositors if a bank in which they have deposited money fails. This means that a maximum of £50,000 compensation is payable per individual.
NedBank Private Wealth - However, we believe that primarily the security of a client’s investment lies in the choice of a sound and stable financial institution. Nedbank Private Wealth was the first independently rated bank across the British Offshore Islands, they hold an internationally recognised Baa2 credit rating from Moody’s, and according to the Moody’s Report, the rating reflects “their highly liquid, well capitalised and relatively low risk entity”.
With no exposure to derivatives or other high risk asset classes, their policy of lending only to large "corner stone" institutions has provided a much greater degree of security in the recent troubled market conditions, and they continue to adhere to a strictly low risk approach to the management of assets on our balance sheet.
Full details of the Jersey Depositors' Compensation Scheme are available from the Jersey Government website on the following address :- www.gov.je/Industry/Finance/DepositProtection/Pages/Overview.aspx
Full details of the Isle of Man Depositors' Compensation Scheme are available from the Isle of Man website on the following address :-https://www.iomfsa.im/consumer-material/isle-of-man-depositors-compensation-scheme-dcs/
It should be noted that investments other than cash deposits are treated differently, and are excluded from the Depositors' Compensation Scheme, but they offer a structure that provides absolute security in the event of bank failure as well as other more immediate practical benefits.
As discussed they offer a full range of offshore custodian services, and confidentiality and additional security is assured through the nominee registration facility. NedBank Private Wealth use a separate nominee company to act as the registered holder of investments. This is an industry wide standard approach in the UK and UK offshore islands, and provides a centralised and convenient means of a client holding investments. It also provides confidentiality for the ultimate owner, and removes the need for the ultimate owner to complete extensive documentation on subscription or redemption / sale of investments, whilst maintaining protection of the assets acquired.
I have set out below some definitions and information that should assist further:-
A “nominee company” when controlled by a financial institution falls under the licence issued by the FSC (their regulator in the Isle of Man) and as such is subject to their inspection. In common with other nominee companies, their nominee company, Nedbank Private Wealth Nominees Limited:-
a) has as its principal object to act as nominee for, or representative of, any person in the holding of any property in trust for such person or persons;
b) is precluded by its memorandum of association from incurring any liabilities other than those to the persons on whose behalf it holds assets, to the extent of their respective rights to, and interest in, such assets;
c) has entered into an irrevocable written agreement with the parent, and in terms of which the parent has undertaken to pay all the expenses of, and incidental to, its formation, operations and liquidation;
d) the parent indemnifies the company against any costs of litigation;
e) clients' assets are named in such a manner as to clearly indicate that they do not belong to parent and that they are ringfenced;
f) assets are held by the company in such a manner that the true owner is clear and precise. This has the effect that:
- in the unlikely event of default, a liquidator would be legally prevented from trying to sequestrate clients' assets and the court would move quickly to prevent this;
- the courts would quickly release the nominee company from any freezing order issued on the bank;
- any freezing order issued on a client of the bank would only affect the assets of that client;
- each client’s assets are easily identifiable at all times.
Assets controlled under an custody agreement and held with a custodian bank, including the assets of the majority of major UK institutions, charities and pension funds, are invariably held in this way.