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Old 15.02.2017, 19:35
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DEGIRO stock broker: any thought?

Hello,

I have recently came across a Dutch broker called DEGIRO, see https://www.degiro.eu/
According to the website they are available in most EU countries, including Switzerland, and are way cheaper than Swissquote & C..

They also have things such as over 700 ETFs without transaction fee, at least in the German website
https://www.degiro.de/preise/etf-han...nulltarif.html

At the same time I have read some dodgy storied about them, e.g.
http://www.amsterdamtrader.com/2015/...s-clients.html

Does anyone have dealt with them, and if so, what was your experience?
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Old 15.02.2017, 23:20
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Re: DEGIRO stock broker: any thought?

Interactive Brokers is cheaper, but Degiro seems very competitive to me. I haven't actually tried it, but it'd probably be my second broker of choice, if IB would screw up. Both are much cheaper than any swiss broker I know. Swiss brokers charge more in stamp tax duty alone on top of already draconian commissions.

Quote:
They also have things such as over 700 ETFs without transaction fee, at least in the German website

https://www.degiro.de/preise/etf-han...nulltarif.html
Very reasonable list, I see many popular and low cost funds.

Quote:
At the same time I have read some dodgy storied about them, e.g.
http://www.amsterdamtrader.com/2015/...s-clients.html
Hardly relevant for a buy-and-hold investor. And if you're into day trading, you should probably inform yourself of the tax implications of that in Switzerland.

One thing however to keep in mind is that they have two distinct pricing models: normal and custody accounts, the former are a bit more shady. Signing up for a normal account authorizes them to borrow your shares from you (to short stocks). It's a common practice in the market, usually low risk, many funds engage in it. But with other brokers like IB usually it's a free optional choice and they share some profit with you for it. If you don't like the idea of that, you can alternatively sign up for a "custody" account, and in return degiro punishes you by: 1) disallowing margin loans, 2) adding a fee for processing dividend payments. Small, but annoying. Probably there's more, these are just two things that caught my eye when reading their pricelist.
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Old 15.02.2017, 23:31
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Re: DEGIRO stock broker: any thought?

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One thing however to keep in mind is that they have two distinct pricing models: normal and custody accounts, the former are a bit more shady.
Indeed. That is something I had noticed as well.
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Old 17.02.2017, 15:56
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Re: DEGIRO stock broker: any thought?

How much would it cost to get the share certificate?
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Old 17.02.2017, 18:12
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Re: DEGIRO stock broker: any thought?

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How much would it cost to get the share certificate?
With interactive brokers? I'm not sure it's possible. Their business model is discount electronic trading

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What means this in "IB"?:
A processing fee of CHF 15.00 per request is charged for any Tax Voucher request for dividends paid on Swiss stocks.
Never been charged that. It sounds like something non swiss residents need to get the 35% swiss withholding tax back. For swiss residents you accomplish it automatically by filing your tax declaration
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Old 18.02.2017, 14:48
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Re: DEGIRO stock broker: any thought?

I think I will open a depot with DEGIRO. They are by far cheaper than all the other Brokers in Switzerland. For my style of buy and hold investing in ETFs its for free (as far as I saw on their website), and I feel better having something which is officialy available in Switzerland to brokers like Captraders, Charles Schwab or IB (which is more suited for active investers anyways), which also convert the money to USD first etc. Don`t know if I am right about that though.
The ETF list is great too.
Now I just don`t know if I should get a normal or custody account. How does this dividend fee work when I am invested in ETFs for example? Or is this only about Stocks which get you Dividends directly?
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Old 17.02.2017, 16:11
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Re: DEGIRO stock broker: any thought?

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Interactive Brokers is cheaper
What means this in "IB"?:
A processing fee of CHF 15.00 per request is charged for any Tax Voucher request for dividends paid on Swiss stocks.
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Old 12.09.2017, 22:17
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Re: DEGIRO stock broker: any thought?

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One thing however to keep in mind is that they have two distinct pricing models: normal and custody accounts, the former are a bit more shady. Signing up for a normal account authorizes them to borrow your shares from you (to short stocks).
What are the risks associated with the normal account and the fact that DEGIO can borrow shares from customers accounts? Thanks.
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Old 13.09.2017, 22:10
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Re: DEGIRO stock broker: any thought?

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What are the risks associated with the normal account and the fact that DEGIO can borrow shares from customers accounts? Thanks.
Their hedge fund makes a horribly wrong bet, goes broke and you'll never get your shares back from them ever again. Normally the borrower has to post a collateral for such a contingency, but it all stays within degiro organizations anyway. Loaning money to myself from myself essentially, doesn't sound very serious and obviously a conflict of interests here. Both hedge fund and degiro go broke at the same time and you lose the money
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Old 13.09.2017, 22:24
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Re: DEGIRO stock broker: any thought?

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Their hedge fund makes a horribly wrong bet, goes broke and you'll never get your shares back from them ever again. Normally the borrower has to post a collateral for such a contingency, but it all stays within degiro organizations anyway. Loaning money to myself from myself essentially, doesn't sound very serious and obviously a conflict of interests here. Both hedge fund and degiro go broke at the same time and you lose the money
Thank you, ivank.

Here is what they sent me in response to the question:
Quote:
For example, if one client wishes to take a short position, shares can be loaned from other client(s) that hold a long position.

Please note that shares are pooled so that as few as possible would ever be lent from one single client.

More information can be found in our investment services information here:

https://www.degiro.co.uk/data/pdf/uk...t_Services.pdf
The document contains this explanation regarding lending:
Quote:
Securities Lending
Under the Investment Services Agreement, DEGIRO has contracted the right to use Securities that SPV holds for the clients of DEGIRO. This may be, for example, in order to be able to settle (i.e. to deliver Securities for receipt of payment) an Uncovered Sell Transaction (a transaction in which a client sells Securities that this client does not hold). DEGIRO then uses Securities that
SPV holds for Client A in order to be able to settle the Uncovered Sell Transaction of Client B. In this way, DEGIRO is able to provide the service Debit Securities.
When DEGIRO Lends Securities, SPV will not have enough Securities of the relevant type from that time on. However, the risk that this shortfall will lead to damage for the client is very small.
- Firstly, DEGIRO (and not the borrowing party) is always SPV’s ‘counter party’ and therefore guarantees the timely return of the Lent Securities with its own equity.
- Furthermore, DEGIRO requires security from the borrowing party. If the borrowing party is a client of DEGIRO, the borrowing party provides security with the right of pledge that DEGIRO has on the Balance of that client and the borrowed Securities are included in the continual risk monitoring of DEGIRO. In other cases, the borrowing party must provide security by transferring money or Securities to SPV, which SPV may use in the event of the failure of the borrowing party to buy back the Lent Securities in the market.

Damage for a client whose Securities are Lent therefore arises only at the moment when both the borrowing party and DEGIRO are no longer able to meet their obligations (i.e. are bankrupt) and the value of the security has fallen or the value of the Lent Securities has risen. The amount of the
damage is limited to the difference in value between the Lent Securities and the security provided by the borrower.

Securities that are held under Profile Custody will not be Lent by DEGIRO.
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Old 18.09.2017, 11:08
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Re: DEGIRO stock broker: any thought?

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Thank you, ivank.

Here is what they sent me in response to the question:


The document contains this explanation regarding lending:
So if you are planning to hold ETF on the long term, you could choose the custody account (vs. the 'normal' account where they can borrow your stocks) and you will pay the same fees, right? The main difference between the 2 accounts is the fee for dividends (thanks @ivank for pointing it out), which you wouldn't have to pay for an ETF.

For those using Degiro, which account did you open, the custody or the one where they can borrow your stocks?
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Old 20.09.2017, 20:31
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Re: DEGIRO stock broker: any thought?

Having looked at DeGiro, they offer very limited range of non-European (i.e. US) options trading.

Can anyone suggest a broker with a wider selection of US options and easy funding and withdrawal facility? TD Ameritrade offers good service, but to transfer money to a non-US bank is a real hassle with completing paper forms + paying $25 per transfer.

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Old 21.09.2017, 08:33
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Re: DEGIRO stock broker: any thought?

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Having looked at DeGiro, they offer very limited range of non-European (i.e. US) options trading.

Can anyone suggest a broker with a wider selection of US options and easy funding and withdrawal facility? TD Ameritrade offers good service, but to transfer money to a non-US bank is a real hassle with completing paper forms + paying $25 per transfer.

Sent from my SM-N920C using Tapatalk
Interactive Brokers?
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Old 21.09.2017, 08:38
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Re: DEGIRO stock broker: any thought?

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Interactive Brokers?
How funding and withdrawal works with them? Do you have to do it through a US bank?

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Old 21.09.2017, 08:44
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Re: DEGIRO stock broker: any thought?

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How funding and withdrawal works with them? Do you have to do it through a US bank?

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Wires from any bank account with your name on it. IB doesn't charge you anything to move money in or out. Only your bank may charge you for the wires.

If you have a US or Canadian bank account there is a direct link between IB account and bank account therefore it is easier to transfer money.
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Old 21.09.2017, 15:27
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Re: DEGIRO stock broker: any thought?

I have a custody account, I prefer that "my stocks" remain in "my hands", but because of this dividend processing fee, I am hesitating to switch to normal account
Please remember that some (most?) ETFs will actually pay out the dividend (only the accumulating ones will not), so with custody account you will pay this "dividend payment fee".


One thing to note about De Giro - they have a small fee for connecting you to non-domestic Stock Exchanges (the ones on which you buy your stocks) - 2.5 EUR per Stock Exchange, per year.
For me it means that I have SIX for free, but I need to pay 5 EUR for 2 foreign Stock Exchanges.


As per info on their site - they are operating under Dutch law, which provides a guarantee up to 20.000 EUR to their customers. If you invest more, you start having higher exposure.
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Old 15.08.2018, 15:16
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Re: DEGIRO stock broker: any thought?

I heard bad things about them e.g. this: http://www.amsterdamtrader.com/2015/...s-clients.html

and also some noise about how client shareholdings are actually held
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