This FAQs is split into three parts.

 

 

Interactive Brokers Luxembourg SARL was granted authorisation by the Luxembourg Financial Sector Supervisory Commission (Commission de Surveillance du Secteur Financier, CSSF) to operate as an investment firm in November 2019. At that time, the CSSF imposed a limit of 10,000 accounts on IBLUX, which we accepted with the hope that this limit would be relaxed. As time has passed, we have recognised that our initial aspiration to grow a European business via IBLUX no longer makes sense since the bulk of Interactive Brokers’ European business has moved to other Interactive Brokers entities over the past four months in recognition of Brexit. Therefore, in the coming months, we will cease IBLUX’s regulated business, and as a result, we will need to make some changes in relation to which legal entity does business with you.

We propose to transfer the business that you currently conduct with IBLUX to our affiliate, Interactive Brokers Central Europe Zrt. (“IBCE”). In other words, it is our intention that all of your accounts, investments and services currently provided to you by IBLUX will instead be provided by IBCE (for convenience we will refer to this as the “Proposed Transfer”).

The Proposed Transfer will occur soon after 30th June 2021. We will alert you just before processing the transfer of your account.

 

 

IBCE, an investment service provider, is licensed and authorized by the Central Bank of Hungary. IBCE’s regulatory status and profile is very similar to IBLUX’s. This is because both IBCE and IBLUX are authorised pursuant to the second Markets in Financial Instruments Directive (Directive 2014/65/EU). This is an EU-wide piece of legislation the purpose of which is to, as much as possible, harmonise how investment firms are regulated across the EU.

 

This does not mean there are not some differences between the legislation that applies to your relationship with IBLUX at present and that which will apply once your account is transferred to IBCE. We explain this in more detail in Part B of this FAQs.

 

Interactive Brokers Central Europe Zrt. is registered as a private company limited by shares (registration number 01-10-141029) and is listed in the Register of Companies maintained by the Metropolitan Court of Registration. Its registered address is Budapest, Madách Imre út 13-14, 1075, phone number is +36 80 088400, and email address is ibce@interactivebrokers.com. 

 

The Central Bank of Hungary will be the competent regulator for IBCE (in the same way that the Luxembourg Financial Sector Supervisory Commission (“CSSF”) is the competent regulator for IBLUX).  The Central Bank of Hungary’s contact details are set out below: 

 

Central Bank of Hungary

1054 Budapest

Szabadság tér 9.

Hungary

 

Magyar Nemzeti Bank

BKKP Pf. 777

 

Client Service, client complaints  

Address: 1013 Budapest, Krisztina krt. 39.

E-mail: ugyfelszolgalat@mnb.hu

Phone:  +36 80 203 776

 

IBCE is a wholly-owned subsidiary that sits within the broader Interactive Brokers Group.

We do not anticipate any material impacts for you as a result of the Proposed Transfer. Nonetheless, it is very important that you read this FAQs carefully and in full and make sure that you understand what the changes are for you.

If you would like to continue to do business with Interactive Brokers, we require your cooperation and action.

 

Specifically, we need you to consent and agree to the Customer Agreement and other Documents available under the Important Information section of the Proposed Transfer process and to the regulatory matters outlined in the Covering Letter, the Important Information and Consent sections of the Proposed Transfer process. You can do this by following the instructions in the Covering Letter.

 

To be clear, you do not have to consent to the Proposed Transfer if you feel that you may be adversely affected by it. However, you should be aware that if you decide to decline or do nothing, IBLUX will not be able to keep servicing your account after its license is relinquished. As part of the process, your account may be restricted, and your account may be forced closed. You have the ability to transfer the positions in your account to another broker within 30 days of receiving the communication inviting you to transfer your account. If you wish to decline, please follow the instructions in the Covering Letter.

 

In either case, we ask that you read the entirety of this FAQs and the Covering Letter before deciding to consent to or decline the Proposed Transfer.

If you consent to the transfer, please complete all actions detailed in the Covering Letter and we will prepare your account for the Proposed Transfer.  Following the Proposed Transfer, IBCE will write to you with further information about your new relationship with them.

 

Trades that you conduct after the Proposed Transfer will be governed by the new Customer Agreement between you and IBCE. A copy of the new Customer Agreement is available in the Important Information section of the Proposed Transfer process. Please see the response to Question A3 above in relation to the timing for the Proposed Transfer.

 

The Luxembourg conduct of business rules currently apply to your account with IBLUX. These rules are based heavily on the recast Markets in Financial Instruments Directive, the Markets in Financial Regulation and various delegated directives and regulations (collectively, “MiFID”).  

 

Similar to the Luxembourg conduct of business rules, the Hungarian conduct of business rules are based on MiFID.

 

Luxembourg custody rules currently apply to your accounts with IBLUX. These rules are based heavily on MiFID.  

 

Going forward, Hungarian custody rules will apply to your relationship with IBCE.  Like the Luxembourg custody rules, the Hungarian conduct of business rules are based on MiFID.  

 

After the Proposed Transfer, the Hungarian Investor Protection Fund according to Act CXX of 2001 on the Capital Market may protect your assets from loss, at an amount up to a maximum of EUR 100,000, should IBCE default and be unable to meet its obligations to you. 

 

Hungary's compensation scheme is similar to the compensation scheme you have access to in Luxembourg. The purpose of the Fund is to pay compensation to you in the event that:

IBCE is a member of the Fund (please see https://bva.hu/en/ipf/ipf-members/). 

 

The compensation provided by the Fund covers claims arising from contracts entered into within the agreement with IBCE of brokerage activity, securities custody, securities account management and client account management activities performed by IBCE.

 

You can only make a claim after a firm goes out of business and its assets have been liquidated and distributed to those who are owed money. Please check the details of the schemes for any limits that apply – not all losses will be covered as there are maximum levels of compensation. The Fund will pay you compensation for the amount you have lost up to a maximum of EUR 100,000.

 

The amount paid by the Fund is:

The General Business Rules of IBCE sets out how to lodge a complaint with IBCE.  The complaints handling procedures are materially similar to those that apply to your existing relationship with IBLUX. If the substance of your complaint relates to something that happened prior to the Proposed Transfer, then you should address your complaint to IBLUX.  

In case of a complaint, investors should follow the complaints procedure as referred to in the Customer Agreement. Once the Proposed Transfer has taken place, the CSSF will cease to have jurisdiction over any complaints that you may have in respect of IBLUX. However, please be aware that Hungary has a dispute resolution scheme operated by the Central Bank of Hungary in the form of the Financial Arbitration Board (“FAB”). The FAB is a free and independent statutory dispute resolution scheme for financial services. You may be eligible to make a complaint to the FAB if you are a retail customer.  Details of FAB can be found on https://www.mnb.hu/en/hungarian-financial-arbitration-board

 

The FAB can be contacted at: 

 

Financial Arbitration Board

1525 Budapest

Pf. 172

 

 

Your data will be processed and protected in accordance with the Interactive Brokers Group Privacy Policy which can be found at: https://www.interactivebrokers.com/en/index.php?f=305. There will be no material change.

 

 

 

Generally speaking, you should contact IBLUX with any questions that you may have prior to the Proposed Transfer, and you should contact IBCE with any questions that you may have following the Proposed Transfer taking place.  Regardless of who you contact at Interactive Brokers, we will ensure your query is promptly dealt with and we will help you to connect with the right person or department.

 

The differences in the offerings are as follows: 

 

For further information please see “IBCE Multi-Currency Account Foreign Exchange Restrictions Disclosure”.

These are the changes to the services you are currently offered: 

Your open positions will be transferred to IBCE and you will face IBCE rather than IBLUX. You will no longer have any legal relationship with IBLUX in relation to those positions. Please follow the link to the PRIIPs KID landing page in the Covering Letter.

 

If you have granted security or collateral to IBLUX this will transfer to IBCE upon the Proposed Transfer taking place. You will be presented with two new contracts for your existing margin loan:

These will operate similarly to your existing margin loan account with the only difference being you will pay service fees to IBCE for entering into the stock borrow transaction on your behalf instead of paying interest.  This may have tax consequences depending on your country of residence.

The migration will have no impact upon the software you use to trade or administer your account. The technology will remain the same as it is today.

 

IBCE will support a limited number of deposit currencies.  The following ten cash deposit currencies, the “Allowed Deposit Currencies” are:

 

You will be required to nominate a base currency from the Allowed Deposit Currencies and if you hold long cash balances in other currencies, you will be required to convert those balances to one of the Allowed Deposit Currencies before migration.

 

In accordance with the client asset protection rules in Hungary, client funds must be protected in the same form that they were received by the broker.  This contrasts with your previous broker, IBLUX, whose regulatory client asset rules allowed them to protect your funds in equivalent value in another currency.   

 

Short currency balances are unaffected.  You may borrow in any currency that the IBKR group offers.

 

All cash balances, with the exception of accruals (e.g., interest, dividends) will be transferred at the same time. Once accruals have been settled and posted to cash, they will automatically be swept to IBCE. Once all accruals have been swept, your current account at IBLUX will be closed and inaccessible for trading purposes. You will still be able to access this closed account via the Client Portal for purposes of viewing and printing historical statements.

 

All positions will be transferred to your new account at the same time except for OTC metals futures and spot metals.  You will be requested to trade out of those positions before conversion to an IBCE account.

 

Your current account will close once all accruals have been posted to cash and transferred to the migrated account.  Once closed, it will be inaccessible for trading purposes, however, it will remain accessible via an account selector from the Client Portal for purposes of viewing and printing historical statements.

 

 

IBKR commissions and fees do not vary by the broker your account is maintained with.

 

There are changes to the interest and fees on cash balances. IBCE will not pay interest on credit balances as Hungarian law that governs investment service companies prohibits the payment of interest.  IBCE will charge a currency handling fee for cash balances in currencies that have negative interest rates.

 

 

No. Your trading permissions will not change when your account is migrated for products that IBCE supports.

 

 

Open orders will not be carried over to the new account, and we recommend that clients review their orders immediately following the migration to ensure that the open orders are consistent with their trading intentions.

 

 

No.  Separate daily, monthly, and annual activity statements will be provided for each of your IBLUX and IBCE accounts covering activity during the period each was open. Activity statements will be posted to the Client Portal under the Reports/Tax Docs menu option and you will need to toggle between the two accounts to access their respective statements.

 

 

Yes, this migration will have no impact upon the cost basis of your positions.

 

 

The configuration of the account following migration will match that of the current account to the extent permissible by regulation. This includes attributes such as margin capability, market data, additional users, and alerts. In limited instances, an account will be migrated to a jurisdiction where the full scope of product eligibility cannot be offered. Client’s holding restricted products may migrate and maintain or close such positions but won’t be allowed to increase the position.

 

 

No. Your username, password, and any 2-factor authentication process in place for your existing account will remain active following migration. You will, however, be assigned a new account ID for your migrated account.