Not upheld: inadequate disclosure and information provision in corporate action notice complaint against Halifax Share Dealing Limited trading as IWeb Share Dealing

Decision detail

Summary

Mr K complained that IWeb failed to inform him in its 2022 corporate action notice that converting his ADR shares to WESTPAC ordinary shares would result in shares that could not be traded on IWeb's platform and would lose ISA tax-wrapper benefits if transferred elsewhere. The ombudsman found that the notice adequately disclosed trading limitations by explaining the shares would trade on the US OTC market with limited liquidity and no guarantee of sale, and instructed Mr K to consider all relevant factors including tax implications. The ombudsman determined that as IWeb provided an execution-only service without advisory responsibilities, it was not required to specify that the Australian Stock Exchange listing would not be supported by its platform or to recommend alternative platforms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that IWeb's 2022 notice adequately informed Mr K about trading limitations by clearly stating that shares would trade on the US OTC market with limited liquidity and no guarantee of sale, and that purchases would not be accepted. The notice also instructed him to consider all relevant factors including tax implications. Since IWeb provided an execution-only service without advisory responsibilities, it was not required to specify that the Australian Stock Exchange listing would not be supported by its platform or to suggest alternative platforms. The information provided was sufficient to alert Mr K to the risks of conversion, and any need for further information to determine suitability would constitute advice beyond IWeb's service scope.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website