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How are my assets protected?

NB! The protections mentioned in this article do not cover poor investment performance. It’s important to always remember that markets may go up or down, so you should never invest more than you can afford to lose.

How does Lightyear protect my funds and instruments?

Trusting us with your investments is not something we take for granted. Lightyear Europe AS is a licensed investment firm and as such is bound by strict regulatory obligations in how we handle and protect your assets. We do this via a process known as safeguarding.
Safeguarding means that, by law:
  1. Uninvested customer funds are stored separately from our business funds with regulated EU credit institutions and highest-rated qualifying money market funds. The primary institutions where we hold uninvested customer funds are ABN AMRO Bank in the Netherlands and in BlackRock qualifying money market funds rated AAA/mmf by Moody’s, S&P and Fitch. We also hold small amounts of customers' money in LHV Bank in Estonia
  2. Lightyear never uses customers' money or investments to cover its own needs, which also means that, unlike banks, for example, we do not lend customers' money out to third parties
  3. Invested assets are held with authorised custodians, which you can read more about in our Who is the owner of the securities I buy? help article. Customers are the legal owners of all their investments on Lightyear — your assets are held in separate accounts from Lightyear assets
  4. All customers' assets are inaccessible by our creditors and they would be returned to you in the unlikely event of Lightyear's insolvency

Are Lightyear customers covered by EU-wide asset guarantee schemes?

  • Yes, all Lightyear customers have their assets covered up to the amount of 20,000 EUR by the Estonian Investor Protection Sectoral Fund. Read more about this fund here
  • This protection covers all accounts regardless of the owner’s residency country. If you have a business account with us, your personal and any business accounts you have are separately covered up to the amount of 20,000 EUR across all your multi-currency balances
  • This protection would come into action only in the most extreme cases if all safeguarding measures that are in place to protect your assets would fail. Lightyear never uses customers' money or investments to cover its own needs, which also means that, unlike banks, for example, we do not lend customers' money out to third parties. Therefore, in the event of a possible bankruptcy, your assets are intact and can be recovered in full. In other words, Lightyear's obligations to protect the client's assets are not limited to any maximum amount
  • Read more about safeguarding above

Am I covered by the Securities Investor Protection Corporation (SIPC) protection in the US?

Your US securities are held with our partner Alpaca, who is FINRA regulated and a registered member of the SIPC. This means your US securities are protected up to the value of $500,000 should Alpaca fail. You can read more about this directly on the SIPC website.

What is a money market fund?

Money Market funds (MMFs) are a type of mutual fund that invests only in highly liquid, short-term debt from the likes of governments and financial institutions. These funds offer high liquidity with a very low level of risk and EU/UK regulations allow for brokerages to hold customer money in them. MMF is considered as a qualifying MMF if it meets higher regulatory standards for quality and liquidity than regular money market funds. In addition to offering protection via diversification, MMFs provide a return which we pass on to customers in the form of interest payments on uninvested cash you hold in your Lightyear account. To opt-out from keeping your money in a MMF, you can opt-out of interest in the app.
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