Securities

You have a custody account with your bank. You see your shares in online banking. You believe you own those shares. That is one of the most dangerous illusions in the modern financial system.

David Webb, a former hedge fund manager, documented meticulously in his book "The Great Taking" (2023) how the global financial system has been rebuilt step by step since the 1970s, with the aim of transferring ownership of private investors' securities to financial institutions should the system collapse. Not a conspiracy theory. Written into law.

The Great Taking: what you need to know

The custody problem

When you buy shares through a bank or a broker, they are not registered in your name. They are registered in the name of a custodian, in Germany for instance Clearstream, in the US the DTCC. All you hold is a claim against your broker, who holds a claim against the custodian.

In a system collapse, when banks and brokers go bust, you as the "beneficial owner" are not a secured creditor. You stand in the queue behind secured creditors such as hedge funds and central banks. Your shares could be used to satisfy their claims.

The legal basis

Webb shows how changes to the US Uniform Commercial Code (UCC) and to European securities laws since the 1990s have systematically weakened the property rights of private investors. What used to count as your property is today, in legal terms, a "security entitlement": a claim, not ownership.

Direct registration: the only real solution

What is direct registration?

Direct registration means that your shares are registered directly in your name with the company or its transfer agent, with no intermediary. You are the registered owner, not a custodian.

In the US, direct registration through the DRS (Direct Registration System) is possible for all listed shares. You can have your broker transfer your shares to Computershare (the largest transfer agent). Your shares are then registered in your name, and cannot be used to satisfy other creditors if your broker goes bust.

Limits and alternatives

Direct registration is not available for every security, in particular not for European shares, ETFs and funds. For these asset classes there are other protective measures: choosing a broker in a safe jurisdiction, using segregated accounts, or moving into physical assets such as gold.

Diversification outside the financial system

The best protection against system risk is diversification: part of your wealth in physical gold outside the EU, part in crypto in self-custody, part in property in several jurisdictions. Anyone who holds everything inside the financial system is fully exposed to system risk.