Central Markets, a UK-based stockbroker has introduced an insurance policy to secure retail customers' funds, if one of its platform providers become insolvent.
Underwritten by Lloyd's of London, the policy forms part of the company's Trade Assured brand, and provides insurance for unlimited retail client funds, above the 50,000 already covered by the Financial Services Compensation Scheme (FSCS).
Designed to perform after the covered firm enters an FSCS default, which agrees to pay out the guaranteed 50,000 in compensation, the product covers the difference between 50,000 and the total deposit.
Central Markets founder and director Adam Stark said the product will ensure safety of deposits for its clients.
''This type of insurance is already common in the U.S on share dealing accounts, and we think the retail trading industry in the UK deserves to have the same safety net," Stark added.
Oval Group director Rupert McLean said: "This product really is the first of its kind in the UK, and has been created as a result of demand from investors to have extra security."
Available at no direct cost to clients, the product has been designed jointly with Oval Group to provide protection against broker-dealer failure and not against fluctuations in the market, mis-selling or poor investment performance.