Information regarding the transfer of accounts from IB LLC to IB Australia

Introduction

Following the establishment of Interactive Brokers Australia Pty Ltd (IB Australia), who holds an Australian Financial Services License, number 453554, Australian residents maintaining an account with Interactive Brokers LLC (IB LLC) will have their account transferred to IB Australia as IB LLC intends to cease business in Australia. Outlined below are the steps required to initiate the transfer and information regarding the account holder's relationship with IB Australia following the transfer.

How To Transfer Your Account To IB Australia

Moving your account to IB Australia is easy. The process is simple because we will use the information and documents we already have on file for you. The transfer process is initiated once you sign the online authorization form. This form will be presented to you immediately upon log in to Account Management.  Once the form has been signed your account will be scheduled for transfer, with the transfer typically taking effect over the following weekend (with consideration given to weekend which coincide with option expiration processing).

We encourage you to complete the application to transfer to IB Australia as soon as possible and before the 30 November 2017 close of business.

Products offered by IB Australia

As a client of IB Australia, you will continue to be able to trade all of the exchange traded products you currently have access to (including local and global stocks, bonds, options, futures, etc.) through Interactive Brokers’ award winning trading platform and software. For further information on IB Australia's products and services, please see our website.

Client Money Considerations

Transfer Of Money From IB LLC To IB Australia: IB LLC and IB Australia are separate legal companies. When you complete the application to transfer your account to IB Australia, you will be directing IB LLC to close your account, transfer your positions, and pay to IB Australia all of the cash currently in your account. Upon receiving these funds, IB Australia will pay the funds into an IB Australia Client Money Account (discussed in more detail below). The actual transfer will occur as soon as practicable following the opening of your account with IB Australia.

Money To Be Held On Trust By IB Australia: IB Australia is required to handle all money that it receives from you or on your behalf in accordance with Part 7.8 of the Corporations Act. In other words, IB Australia is required to maintain one or more trust/segregated client money accounts (Client Money Accounts) with a bank for the holding of monies it receives for or from its clients. This money is held on trust for IB Australia's clients. IB Australia will initially only hold client money in Australian dollars (AUD) and U.S. dollars (USD).

Conversion Or Withdrawal Of Non-AUD And Non-USD Balances Before Transfer: If you have cash balances in currencies other than AUD or USD, these will need to be converted into AUD or USD prior to the transfer of your account to IB Australia. If you wish to convert other currencies to AUD or USD yourself before the transfer occurs, you can do so through your current account with IB LLC. There will only be a limited window for you to perform this conversion.


You will be given a choice in the IB Australia application process as to whether you would like cash balances in currencies other than AUD or USD to be converted into AUD or USD. Any such balances that you do NOT convert to AUD or USD yourself before the transfer occurs, will be automatically converted by IB Australia into USD prior to the transfer of your account. The exchange rate that will apply to such a conversion will be the best rate that is reasonably available to IB LLC through its existing liquidity providers when it performs the conversion.

Client Assets And Positions – Transition
When you transfer your account to IB Australia, IB Australia will be your service provider, not IB LLC. When you trade through your IB Australia account, IB Australia will execute Australian market transactions for you, and will arrange for offshore brokers to execute transactions in offshore markets, including IB LLC and other Interactive Broker Group affiliates, as appropriate. In those markets, the offshore brokers will treat IB Australia as their client (and IB Australia will operate omnibus client accounts with those brokers to cover transactions for IB Australia's clients).

IB Australia will replace IB LLC as your custodian. IB Australia will hold all assets that you purchase through IB Australia on your behalf subject to IB Australia’s General Terms, which are available here.


Please refer to IB Australia’s Financial Services Guide, which provides important information about the custody services that IB Australia provides and the sub-custodians that IB Australia uses.

The following is a brief summary of the asset and position holding arrangements going forward:

Assets/Positions Past IB LLC Arrangement Future IB Australia
Arrangement
Australian securities IB LLC as custodian (and ABN Amro Clearing as sub-custodian
and clearing participant)
IB Australia as custodian and BNP Paribas Securities Services (as sub-custodian and clearing
participant)
Foreign securities Foreign sub-custodian (including IB LLC affiliates) IB Australia as custodian and IB
LLC as sub-custodian.
Australian exchange traded
derivatives
ABN Amro Clearing Sydney Pty Limited (clearing participant) IB Australia (clearing participant)
International exchange
traded derivatives
Foreign broker/clearing participant
in relevant market
Foreign broker/clearing
participant in relevant market
FX positions Contract with IB LLC Contract with IB Australia


When you agree to transfer your account to IB Australia, you will be instructing and authorising IB Australia and IB LLC to do all things reasonably required to facilitate the transfer of all assets and positions from your IB LLC account to your new IB Australia account, including to amend their books and records to reflect the transition, and to give appropriate instructions and directions to sub-custodians, clearing participants and other external providers.

What If I Choose Not To Transfer My Account To IB Australia or Don't Act?
You are not required to transfer your account to IB Australia but would need to close or transfer it prior to the 30, November 2017 close of business as IB LLC intends to cease providing financial services in Australia as of that date. This means IB LLC will cease offering financial services and products to Australian residents, including you. This will impact you as follows:

If your account remains open and you have not opened a new account with IB Australia before the end of November, then, IB LLC (U.S.) will under the terms of its Customer Agreement with you, impose trading restrictions on your account, including prohibiting you from opening new positions and transfer your account to IB Australia. 

What Happens When IB LLC (U.S.) Transfers My Account To IB Australia?

Please note the following information is only relevant if you do not apply to transfer your Account(s) to IB Australia prior to the end of November 2017. 

If you have NOT applied to transfer your account(s) to IB Australia, then, IB LLC (U.S.) will be forced to assign your account(s) to IB Australia. When this happens, IB Australia will be holding your account under the same agreement that you held the account with IB LLC (U.S.).  

You will be prohibited from opening new positions until you accept the legal terms that govern and the disclosures that relate to IB Australia’s account offering; you can, however, apply to withdraw your funds and transfer positions to 3rd party brokers.  

Please also note the following:

  • If the base currency of your IB LLC (U.S.)  is other than AUD or USD, we will default the base currency of the account prior to the transfer to IB Australia to AUD; Normal 0 false false false EN-US X-NONE X-NONE
  • Any currency balances currently held that are not denominated in either AUD or USD will be converted into your Base Currency at the prevailing exchange rate; and,
  • If you close any open positions after the transfer and the settlement proceeds (if any) are in a currency other than AUD or USD, IB Australia will convert the proceeds into the base currency of your account.
  •  If, at a later date, you still have not accepted IB Australia’s new legal terms and disclosures, then IB Australia may transfer out positions into issuer sponsored holdings (where it deems reasonable to do so) and liquidate any other open positions that you hold in the account and return the resulting funds to you. IB Australia will provide you notice should we decide to take this action.

Other

  • For a full list of the disclosure documents and legal terms which govern the services IB Australia will make available please refer to the IB website.
  • For further information on IB Australia, click on our Financial Services Guide.
  • For more information or assistance, please contact IB Client Services.
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