Hatch is a Kiwi Wealth brand (www.kiwiwealth.co.nz) and does not hold your shares. We work with world-class partners to protect your money and investments. Your money and shares are available at all times.
You own your shares and have voting rights
Hatch provides access to the US share markets via our partner DriveWealth, a US regulated broker-dealer.
Your shares are held in street name as 'Drive Wealth for the benefit of customers'. This is standard practice in the US. There are brokers who will establish a brokerage account in your name, but it will most likely cost a lot of money and is considered a full-service brokerage account.
Holding securities in street name does not diminish your rights. It has facilitated speedy trading and trade settlement and reduced the risk of loss and theft that the physical transfer of stock certificates would entail. By lowering transaction costs, the street name convention has helped to lower fees.
Your uninvested money is held in a low-risk Money Market Fund
Any uninvested money in your Hatch account will be automatically swept into a Money Market Fund with Dreyfus BNY Mellon (a common practice in the US). You can find their prospectus in our terms and conditions. The purpose of the fund is to provide a low-risk method of maintaining your Hatch account balance, you may even see some dividends.
Any dividends will appear in your account at the beginning of the month. the transaction will show up as 'MONEY MARKET FUND [DATE] DIVIDEND'.
The Dreyfus BNY Mellon money market fund is seen as safe by three reputable ratings agencies.
What happens to my shares if DriveWealth or Hatch goes under?
In the case of US broker insolvency (DriveWealth, Citi), there are protections in place in the US such as Securities Investor Protection Corporation which insures each customer account for up to $500,000 (with a maximum of $250,000 in cash). More details on the insurance you get are here: www.sipc.org
If Hatch ceases to exist, you will still own your shares, they will still be held by DriveWealth and we can’t touch them.
We'll help you with whatever you decide to do next, whether it’s moving to another broker, or selling up and withdrawing your money.