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What is a Collateral lock?

A collateral lock is applied to the accounts that are being held as security. While you will still be able to buy & sell instruments within these accounts you will not be able to transfer or withdraw cash to the value of the lock from these accounts.

 

The term collateral refers to an asset that a lender accepts as security for a loan. The collateral acts as a form of protection for the lender. That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sell it to recoup some or all of its losses.


Securities, refer specifically to financial assets (such as stock shares) that are used as collateral.

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In respect of FSRs, EasyEquities acts as principal to a contract for difference issued to the investor, where the investor will have a contractual claim against EasyEquities to the economic benefits and risks associated with share ownership (price movements and dividends) without having ownership rights in the underlying share. Fractional share rights (FSRs) which are issued through a contract for difference, are an over the counter derivative. Unlike whole shares, FSRs do not carry any voting rights. As the investor makes further investments in FSRs and ultimately ends up with a whole share, the contract for difference is closed out and ownership whole share is delivered to the investor.

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