EasyEquities updated terms?

[Bewlen]

EE updating their t&c's. Anyone able to translate the following clause in ELI5 language?

" A new clause 36 (Automatic Securities Lending) has been inserted to include the terms and conditions in terms of which EasyEquities may automatically borrow the Whole Securities in your Account against payment to you of a Securities Lending Fee. For further information, please read this clause 36 in the Contract and the summary guide as published on the Platform "

 

[Bees ZA]

Securities Lending on EasyEquities

EasyEquities allows you to earn additional income on your holdings on our platform through Securities Lending. What is Securities Lending? Securities lending is the term used to describe the process where investors make short-term loans of the ...

support.easyequities.co.za

They did a very weak job of explaining what is going on. Just dumped it on us. They are doing a webinar on Thursday to explain everything and answer any questions that anyone has.

 

[mr_norris]

" A new clause 36 (Automatic Securities Lending) has been inserted to include the terms and conditions in terms of which EasyEquities may automatically borrow the Whole Securities in your Account against payment to you of a Securities Lending Fee. For further information, please read this clause 36 in the Contract and the summary guide as published on the Platform "

I must admit that I didn't quite understand that line.

But judging by this:

Securities Lending on EasyEquities

EasyEquities allows you to earn additional income on your holdings on our platform through Securities Lending. What is Securities Lending? Securities lending is the term used to describe the process where investors make short-term loans of the ...

support.easyequities.co.za

It means we can opt out if we don't want it?

Also - isn't this much like how a bank pays you interest? Or is this a different thing?

 

[uwais_s]

https://twitter.com/x/status/1285864821485961222

 

[Bewlen]

https://twitter.com/x/status/1285864821485961222

Yeah that's not great at all. Finding out how to opt out of this immediately!

 

[3WA]

Does this mean we're going to be able to go short on EasyEquities? Or do they borrow the shares for some other part of First World Trader?

I just sent the opt-out email.

 

[pkid]

I feel this is a betrayal of my trust. I never read those updated T&C emails. I bet they are hoping most people are like me. IMO it should be a notice that is displayed when you log in, explaining everything and letting you turn it on or off. Any other ideas of low cost brokers I can use now?

 

[netcruiser]

Does this mean we're going to be able to go short on EasyEquities? Or do they borrow the shares for some other part of First World Trader?

I just sent the opt-out email.

They borrow it to brokers that have short positions. Most stock brokers do it (borrow out their long positions).

 

[wcm]

I feel this is a betrayal of my trust. I never read those updated T&C emails. I bet they are hoping most people are like me. IMO it should be a notice that is displayed when you log in, explaining everything and letting you turn it on or off. Any other ideas of low cost brokers I can use now?

Same feeling, Very dodgy clause to add with Opt-out only available via email request. What BS

 

[mr_norris]

I feel this is a betrayal of my trust. I never read those updated T&C emails. I bet they are hoping most people are like me. IMO it should be a notice that is displayed when you log in, explaining everything and letting you turn it on or off. Any other ideas of low cost brokers I can use now?

I'm sorry, but I have to disagree here. How can you send your hard earned money somewhere and not read the T&C's that comes with it? That's your own fault.

EE are not the only ones to do this sort of thing, lots of big brokers do this already, and you still have the right to opt out.

People are really making something out of nothing here. What do you guys expect them to do? Send someone to each of their clients to give them a hug and ask them what they'd like nicely? They are being upfront, and they are giving you a clear choice. What more do you want?

 

[pkid]

I'm sorry, but I have to disagree here. How can you send your hard earned money somewhere and not read the T&C's that comes with it? That's your own fault.

EE are not the only ones to do this sort of thing, lots of big brokers do this already, and you still have the right to opt out.

People are really making something out of nothing here. What do you guys expect them to do? Send someone to each of their clients to give them a hug and ask them what they'd like nicely? They are being upfront, and they are giving you a clear choice. What more do you want?

I read the T&Cs when signing up over a year ago. They were agreeable to me and so I signed up and deposited money with them. This is a change to the T&Cs which happens from time to time. Most of the time I am not phased as it doesn't materially impact the service I am using. This is one of the few times when I think it changes things enough, at least for me, that it warrants different handling.

I mentioned my expectation in my post. For something like this I think there should be explicit opt in for existing members. How does this impact my investments, what is the risk to me explained clearly etc. A simple pop up the first time I log in after the change with a yes and no button. Surely this is also less work in the long run than processing potentially hundreds of emails and should be achievable with the minimum of development effort? In the current pandemic I don't think hugging everyone is a great idea...

Easy Equities positions itself as something that is simple to use and they try to attract people who are new to investing - I don't think that their explanation on this is sufficient. The fact that the other big brokers also do this, in my view doesn't apply here, as Easy Equities position themselves as simple and for the person who has very limited understanding of how the stock market works. I have no problem with them lending out securities - my problem is with how the change was handled.

New members going forward there is no need for popups as they should read the T&Cs before signing up.

 

[mr_norris]

I read the T&Cs when signing up over a year ago. They were agreeable to me and so I signed up and deposited money with them. This is a change to the T&Cs which happens from time to time. Most of the time I am not phased as it doesn't materially impact the service I am using. This is one of the few times when I think it changes things enough, at least for me, that it warrants different handling.

I mentioned my expectation in my post. For something like this I think there should be explicit opt in for existing members. How does this impact my investments, what is the risk to me explained clearly etc. A simple pop up the first time I log in after the change with a yes and no button. Surely this is also less work in the long run than processing potentially hundreds of emails and should be achievable with the minimum of development effort? In the current pandemic I don't think hugging everyone is a great idea...

Easy Equities positions itself as something that is simple to use and they try to attract people who are new to investing - I don't think that their explanation on this is sufficient. The fact that the other big brokers also do this, in my view doesn't apply here, as Easy Equities position themselves as simple and for the person who has very limited understanding of how the stock market works. I have no problem with them lending out securities - my problem is with how the change was handled.

New members going forward there is no need for popups as they should read the T&Cs before signing up.

Fair enough, I understand your point. I have to learn that what works for me doesn't work for everyone else. Perhaps make a suggestion to Charles Savage on twitter? He might think it's worth doing. It seems that even he agrees that some things could have been improved:

https://twitter.com/x/status/1285925014764752897

 

[pkid]

Fair enough, I understand your point. I have to learn that what works for me doesn't work for everyone else. Perhaps make a suggestion to Charles Savage on twitter? He might think it's worth doing. It seems that even he agrees that some things could have been improved:

https://twitter.com/x/status/1285925014764752897

I think the webinar is a great idea and it is very encouraging they are listening to clients. I'll be signing up. I think that to be honest I am also more risk averse after watching my net worth dive drastically in March. If EE had introduced this in 2019 I might not have been so affected but I want as much "stability" as possible right now, even if perhaps the stability is an illusion.

 

[mr_norris]

I think that to be honest I am also more risk averse after watching my net worth dive drastically in March.

Yeah I get you. My ZAR account is perma red with the only things in green being Satrix Top 40 and my Purple Group shares. Everything else is in the red, and things have tanked so bad that my ZAR account is pretty much down 11-15%. My US and AUS accounts make up for it, but it's depressing.

I'm not sure what we'd get out of it if we didn't opt out, but I welcome anything that'll lift the ZAR side up a bit.

 

[pkid]

Looks like they have cancelled the launch until they can tweak a few things. I think they forgot they have a lot of inexperienced (I include myself in that category) clients. On the one hand that is awesome because they have given us the opportunity to invest, but on the other hand we need more hand holding than the more experienced investor.

https://twitter.com/x/status/1285934769612697600

 

[TeMoeg]

I feel this is a betrayal of my trust. I never read those updated T&C emails. I bet they are hoping most people are like me. IMO it should be a notice that is displayed when you log in, explaining everything and letting you turn it on or off. Any other ideas of low cost brokers I can use now?

I can recommend Sharenet. For every transaction:

- The Brokerage Fee is 0.3% of the value of the transaction, subject to a minimum of R100.
- Securities Tax of 0.25% of the transaction is payable.

Their monthly Custody Fee is R84.

They require a minimum of R50 000 in value when opening an account. This may be a cash deposit, or made up partly or in whole by transfer of equities from another broker.

In return you will get a decent brokerage service, where you may nominate the price and number of equities to be bought/sold. You will receive an SMS the very minute that a transaction has taken place (order filled), and be registered as the legal owner of the equities you bought.

 

[3WA]

I can recommend Sharenet. For every transaction:

- The Brokerage Fee is 0.3% of the value of the transaction, subject to a minimum of R100.
- Securities Tax of 0.25% of the transaction is payable.

Their monthly Custody Fee is R84.

They require a minimum of R50 000 in value when opening an account. This may be a cash deposit, or made up partly or in whole by transfer of equities from another broker.

Those fees look worth it if you're trading or regularly making >R33.3k transactions.

Not worth it if you’re a middle class pleb investing <R5k a month - R184 fees will erase your monthly growth.

 

[TeMoeg]

Those fees look worth it if you're trading or regularly making >R33.3k transactions.

Not worth it if you’re a middle class pleb investing <R5k a month - R184 fees will erase your monthly growth.

I would have agreed with you, except that with EasyEquities, what you see is NOT what you get.

Let's say you have about R7000 a month, which you want to invest in Sasol shares.

With Sharenet, you issue a buying order of 50 Sasol shares @ R138 each. This will cost you R(6900 + 100), as well as the monthly fee of R84.

With EasyEquities, you nominate an amount of R6900 to be invested in Sasol. You receive a confirmation email that 47.26 Sasol shares were bought on your behalf for R146 per share (Let's for the moment assume that you will be able to force the fractional share out of EE when you sell one day). You have now immediately lost R (2.74 x 138) = R378.12 in value, when compared to Sharenet. This loss of +5% in value overshadows the differences in admin fees between the two brokers.

I have seen this demonstrated when using their "Demo" account. I assume that the same loss in value of +5% will occur when you sell one day.

 

[zerocool2009]

I would have agreed with you, except that with EasyEquities, what you see is NOT what you get.

Let's say you have about R7000 a month, which you want to invest in Sasol shares.

With Sharenet, you issue a buying order of 50 Sasol shares @ R138 each. This will cost you R(6900 + 100), as well as the monthly fee of R84.

With EasyEquities, you nominate an amount of R6900 to be invested in Sasol. You receive a confirmation email that 47.26 Sasol shares were bought on your behalf for R146 per share (Let's for the moment assume that you will be able to force the fractional share out of EE when you sell one day). You have now immediately lost R (2.74 x 138) = R378.12 in value, when compared to Sharenet. This loss of +5% in value overshadows the differences in admin fees between the two brokers.

I have seen this demonstrated when using their "Demo" account. I assume that the same loss in value of +5% will occur when you sell one day.

One thing not visible to the end user is fund costs. It comes from dividends (else when you sell)

 

[Hamster]

One thing not visible to the end user is fund costs. It comes from dividends (else when you sell)

These costs?