When purchasing stocks on eToro, all users do so via one of our regulated entities. The same applies for other regulated assets, including ETFs and CFDs.
All of our entities are subject to regulatory rules and conduct requirements, which are strictly monitored - especially when it comes to custody agreements (i.e. holding of users assets, including segregated pooled custody facilities and user's funds).
When a user decides to purchase a stock, this is done in line with our Terms and Conditions.
When a user purchases (BUY) non-leveraged stocks on our investment platform, it is purchased as the underlying asset. The eToro regulated entity for your particular account will purchase the stock on your behalf and will hold it in custody for you within a pooled, segregated “omnibus” account.
We are required to reconcile all assets (stocks and cash) held on our platform, and to submit all of this information to our various regulators periodically.
The user becomes the beneficial owner, and remains so until the position in question is closed. This ownership comes with all economic benefits of owning the stock, including receiving dividend payments.
The eToro investment platform forms the basis of the record of all transactions carried out by eToro's users. In addition, all relevant contract notes and historical statements (i.e. account statement) may be viewed as required, all of which show the details of positions executed.
The eToro investment platform is NOT an exchange or a marketplace, and it is therefore not possible to initiate a stock transfer between eToro and a third-party venue (and vice versa). This means that all positions that are opened with eToro must be closed with eToro.
Additionally, as eToro holds stocks on behalf of its users as beneficial owners, users do not currently have voting rights for stocks held.
Further information may be found within our Terms and Conditions – specifically, “SCHEDULE B - INVESTING IN SECURITIES”.