Stocks and shares

We can’t look at every type of complaint about stocks and shares. For example, we can only look at complaints about a company registrar if they offer share-dealing services.

We can’t look at complaints about companies involved in the purchase of shares – such as market makers – unless they have a relationship with the customer. This applies even if they’re regulated.

If you’re dealing with a complaint about stock market activities, you should refer it either to the relevant stock exchange or the Financial Conduct Authority (FCA).

If the customer complains that you took too long to set up an account or transfer it elsewhere, we’ll investigate whether the time taken was reasonable.

If the shares were held in an ISA, we’ll also take into account the HMRC guidance that transfers shouldn’t take more than 30 working days. Find out more about approach to stocks and shares ISAs

If we decide that you took too long, we’ll decide whether the delay caused the customer financial loss or inconvenience.

Sometimes the customer says they wanted a share dealing account set up sooner so they could buy a particular share. And because the account wasn’t set up sooner, they couldn’t buy the shares they wanted or they missed the price they wanted.

In this case, we’ll usually ask for evidence.

If a customer couldn’t place an order to buy or sell because the dealing system encountered a problem, we’ll look at why it didn’t work. We’ll also look at what you say about providing trading systems in your terms and conditions. 

If we decide you were at fault, we’ll look at how the customer was affected. Businesses can’t usually guarantee that customers can trade online. So, we’ll consider whether it would have been reasonable for the customer to try something else, like phone dealing.

Often, we’ll need to consider the type of order in question. 

At-best orders

Customers sometimes complain that they didn’t get the best price available on the day. You must go to the market within a reasonable time of the customer's order being placed. But ‘at best’ means the best price quoted at the time of going to the market, not the best price quoted on that day.

In these cases, we’ll look at whether you did enough to get the best possible result for the customer, according to your ‘best execution’ policy.

Limit orders

Sometimes complaints arise from misunderstandings. We’ll investigate whether you should have been clearer about the terms of the limit set, on the phone or in writing.

In some cases, a customer complains that the market price went through the price set in the limit order but you failed to carry out the sale or purchase.

We’ll look at market data to see whether the limit price was breached and consider the particular circumstances of the case.

You might have introduced new charges or fees on share-dealing accounts, for example commission or fixed fees. In these cases, we start by looking at the contract between you and the customer at the time of the change to see:

• what it said about varying the contract
• whether the change was in line with the contract

We’ll also want to know how the change was communicated to check it was “fair, clear and not misleading” in line with FCA rules on communications.

If you’re acting as nominee, the shares are recorded on the share register in your name. It’s also your responsibility to ensure the customer is informed about anything that could affect their interests as a shareholder, including:

• takeovers
• share issues
• general meetings
• rights issues and other share reorganisations

For example, a customer might complain that you didn't notify them about a rights issue in time for them to buy new shares.

When a customer feels they haven’t been kept informed, we’ll look at what the terms and conditions say about your involvement and what you told the customer. We’ll also consider what’s fair and reasonable in the case of the individual corporate action in question. We might also need to look at the timescales and deadlines involved.

Shares held on paper, in the form of a certificate, may get lost or destroyed. If a certificate is lost, a registrar won’t issue a duplicate until the owner of the share certificate signs a letter of indemnity. This letter frees the registrar of any costs if the claim turns out to be fraudulent. The owner of the shares pays for the indemnity.

Sometimes we find the share-dealing company was responsible for the loss. For example, the customer might have notified the business of a change of address but the business sent the certificate to their old address. When this happens we’re likely to tell the business to pay for the indemnity.