What happens to shares when a custody bank goes bankrupt?

What would happen to the stocks I keep at my custody bank if the bank were to go bankrupt?

Hi there,

Securities like shares and bonds are not counted as deposits. As such, they are not covered by bank deposit guarantees.

However, securities are generally safe because you continue to own them even after placing them in the custody of a bank. Money deposited in a bank, on the other hand, is "invested" in the bank - not placed in the bank for safekeeping (as is the case with securities).

Exception: Securities issued by a bank may become worthless if that bank goes bankrupt. Many banks include some of their own securities in investment products. Structured products issued by a bank may also be affected by bankruptcy.

ETFs and investment funds with shares are segregated assets and are not affected by liquidation of bank assets. Exception: Funds and ETFs with swaps are vulnerable.

Best regards from Moneyguru:
Bank failures: What happens to your money?
Segregated assets explained