ЧАВО: Миграция счетов в IBLUX в связи с Brexit

Overview: 

Данный документ содержит важную информацию относительно предлагаемого переноса Вашего счета из IBUK и IBLLC в IBLUX. Пожалуйста, прочтите его целиком, прежде чем принимать меры, описанные в присланном Вам по электронной почте сопроводительном письме.

Background: 

Данная статья описывает ключевые изменения в регулировании, которые произойдут вследствие предложенного перевода (как указано ниже), и дает ответы на общие вопросы. Ее следует прочесть вместе с присланным Вам по электронной почте сопроводительным письмом. Если Вам потребуется дополнительная информация, воспользуйтесь контактными данными из сопроводительного письма, чтобы связаться с нами. Текущая статья служит заменой ранее опубликованным материалам под названием “ЧАВО: Миграция счетов в связи с Brexit” (т.н. исходные ЧАВО), поскольку она отражает самые новые сведения, с которыми мы просим Вас внимательно ознакомиться. В случае любых несоответствий с исходными ЧАВО, просим опираться на информацию, предоставленную в данной статье.

Объяснение:

Данная информационная брошюра разделена на три части.

  • Часть А содержит ключевую информацию о предлагаемом переносе Вашего бизнеса.
  • Часть B излагает основные нормативно-правовые вопросы, касающиеся процедур, изложенных в части A.
  • В части C приведены ответы на другие возможные вопросы, а также практическая информация об изменениях, последующих за предлагаемым переносом.

 ЧАСТЬ A – ПРЕДЛАГАЕМЫЙ ПЕРЕНОС

1. Что происходит и почему нужен перенос?

Как Вы знаете, в настоящее время Ваше сотрудничество с Interactive Brokers осуществляет Interactive Brokers (U.K.) Limited (“IBUK”), а оказываемые услуги предоставляет IBUK и, в зависимости от продуктов, наш филиал в США — Interactive Brokers LLC (“IBLLC”). Сейчас для предоставления своей части услуг в материковой Европе IBUK использует т.н. "паспорт финансового обслуживания". Мы предполагаем, что после завершения Брексита в этом году, IBUK не сможет его использовать, и с 1 января 2021 года Interactive Brokers необходимо будет сменить юридическое лицо, которое ведет с Вами бизнес.  

2. В чем заключаются эти изменения?

Interactive Brokers создала новое юридическое лицо в Люксембурге, а именно Interactive Brokers Luxembourg SARL (“IBLUX”). Мы предлагаем перенести бизнес, который Вы в настоящее время ведете с IBUK и IBLLC, в IBLUX. Другими словами, все Ваши счета, инвестиции и услуги, оказываемые Вам IBUK и IBLLC, теперь будет хранить и оказывать  IBLUX (далее “Предлагаемый перенос”). 

3. Когда произойдет Предлагаемый перенос?

На данный момент перенос планируется осуществить после 30 октября 2020 года, в зависимости от готовности Вашего счета (т.е. выполнения необходимых действий, изложенных в сопроводительном письме). 

4. Что собой представляет IBLUX? Чем занимается эта компания?

В ноябре 2018 года IBLUX получила разрешение от  Комиссии Люксембурга по надзору за финансовым сектором (фр. Commission de Surveillance du Secteur Financier, CSSF) на осуществление деятельности инвестиционной фирмы. Правовой статус и положение IBLUX очень близки к IBUK. Это связано с тем, что и IBLUX, и IBUK уполномочены в рамках  второй Директивы "О рынках финансовых инструментов" (англ. Markets in Financial Instruments Directive). Данная директива является общеевропейским законодательным актом, который призван унифицировать регулирование инвестиционных фирм. 

Это не означает, что правила, которые применяются к Вашему счету сейчас и после переноса, не будут отличаться . Подробнее о данных отличиях рассказывается в части B ниже. 

5. Каковы юридические сведения IBLUX?

Interactive Brokers Luxembourg SARL зарегистрирована в реестре компаний Люксембурга как частная компания с ответственностью, ограниченной акциями, (société à responsabilité limitée) (регистрационный номер B229091). Она зарегистрирована по адресу 4, rue Robert Stümper, L - 2557 Luxembourg (L - 2557, Люксембург, ул. Роберт Стампер, 4). Мы завершаем согласование сведений для повседневной связи с IBLUX и сообщим их позднее .   

6. Кто регулирует IBLUX и как связаться с этим органом?

Уполномоченным надзорным органом IBLUX является Комиссия Люксембурга по надзору за финансовым сектором (CSSF) — в той же мере, в какой Управление финансового надзора Великобритании (англ. Financial Conduct Authority) регулирует IBUK. Контактные данные Комиссии Люксембурга по надзору за финансовым сектором (CSSF) приведены ниже:

Местонахождение

Commission de Surveillance du Secteur Financier

283, route dArlonL-1150

Luxembourg 

Почтовый адрес и контактный телефон

Commission de Surveillance du Secteur Financier

L-2991 Luxembourg

Телефон: (+352) 26 25 11 факс: (+352) 26 25 12601 

Справочная служба

E-mail: direction@cssf.lu

Телефон: (+352) 26 25 12 28 0 

 

7. Какое место занимает IBLUX в группе компаний Interactive Brokers?

IBLUX является стопроцентной дочерней компанией Interactive Brokers Group.

8. Что данный переход означает для меня? Ожидаются ли существенные изменения?

Мы не ожидаем значительных изменений. Тем не менее, внимательно изучите данную статью, чтобы быть в курсе предстоящих изменений.

9. Что нужно сделать, чтобы и дальше быть клиентом Interactive Brokers?

Если Вы хотите продолжать вести дела с Interactive Brokers, Вам необходимо предпринять некоторые шаги.

В частности, необходимо подтвердить свое согласие с Клиентским соглашением и другими документами в приложении к сопроводительному письму, а также с вопросами регулирования, изложенными в сопроводительном письме. Чтобы подтвердить согласие, следуйте инструкциям в сопроводительном письме.

Обращаем Ваше внимание, что Вы можете не соглашаться с Предлагаемым переносом, если считаете, что он повлияет на Вас негативно. Однако в этом случае по окончании процедуры Брексита IBUK, скорее всего, не сможет обслуживать Ваш счет. Тогда счет подвергнется ликвидации, и Вам будет необходимо перевести свои активы к другому брокеру. Чтобы отказаться от переноса, следуйте инструкциям в сопроводительном письме.

В любом случае, перед тем как подтвердить свое согласие или отказ,  внимательно и полностью изучите данную информационную брошюру и сопроводительное письмо.

10. Что дальше?

Если Вы согласны на перенос, выполните шаги, изложенные в сопроводительном письме, и мы подготовим Ваш счет к Предлагаемому переносу. После переноса Вы получите сообщение от IBLUX с дальнейшей информацией о сотрудничестве с компанией.

 

ЧАСТЬ B – НОРМАТИВНО-ПРАВОВЫЕ ИЗМЕНЕНИЯ

1. Какие положения и условия будут действовать после Предлагаемого переноса? Отличаются ли они от действующих сейчас?

Сделки, совершенные после Предлагаемого переноса, будут регулироваться Клиентским соглашением между Вами и IBLUX. Новое соглашение будет доступно Вам в электронной форме вместе с предложением подтвердить согласие. Информация о дате Предполагаемого переноса приведена в вопросе A3 выше.

2. Какие правила ведения бизнеса (включая лучшее исполнение) будут действовать для нового сотрудничества с IBLUX? Будут ли существенные изменения в соответствующем регламенте сотрудничества с IBLUX по сравнению с IBUK?

Перенос приведет к ряду изменений, описанных ниже.

Если Вы сотрудничаете с IBUK на основе “ведения” (другими словами, Вы торгуете индексными опционами, фьючерсами и фьючерсными опционами, и IBUK хранит Ваш счет и активы), тогда для Вас действуют правила ведения бизнеса, установленные Управлением финансового надзора Великобритании. Данные правила во многом основаны на дополненной Директиве "О рынках финансовых инструментов", Регламенте "О финансовых рынках" и различных делегированных директивах и регламентах (вместе “MiFID”). Касаемо лучшего исполнения, где оно применимо, IBUK обязана предпринять все необходимые меры, чтобы при исполнении ордера обеспечить для Вас лучший возможный результат.

Если Вы сотрудничаете с IBUK на основе “представления” (другими словами, Вы торгуете продуктами, не перечисленными в предыдущем параграфе, и явялетесь клиентом и IBUK, и филиала в США — IBLLC), то для Вас действует группа правил ведения бизнеса. Например, в отношении перевода своего бизнеса в IBLLC будут действовать правила ведения бизнеса, установленные Управлением финансового надзора Великобритании (подробнее об этом можно узнать выше). После перевода бизнеса в IBLLC для нашей компании (в т.ч. к ее обязанностям по обеспечению лучшего исполнения и хранения) будут применяться, в том числе,  правила и регуляции Комиссии по ценным бумагам и биржам США (Securities and Exchange Commission) и  Комиссии по торговле товарными фьючерсами США (Commodity Futures Trading Commission).

В целом, обращаем Ваше внимание, что Ваш бизнес может быть поделен между способами сотрудничества (другими словами, одна часть Вашего бизнеса ведется на основе "ведения", и другая — на основе "представления").

В дальнейшем мы не будем разграничивать два вида сотрудничества, и в каждом случае, описанном выше, для сотрудничества с IBLUX  будут действовать правила ведения бизнеса Люксембурга. Как и правила Управления финансового надзора Великобритании, правила Люксембурга во многом основаны на MiFID, и обязательства IBLUX по обеспечению лучшего исполнения аналогичны действующим для IBUK.

По нашему мнению, хотя правила сотрудничества изменятся, такие изменения не являются существенными и не ухудшат степень защищенности Ваших средств.

3. Как будет осуществляться хранение моих инвестиций в IBLUX с нормативной/правовой точки зрения? Будут ли существенные изменения в соответствующем регламенте сотрудничества с IBLUX по сравнению с IBUK?

Применяемые в настоящий момент правила зависят от рода Вашего сотрудничества с IBUK (см. вопрос B2 выше). Если Вы сотрудничаете с IBUK на основе "ведения", для Вас будут действовать правила о клиентских активах Управления финансового надзора Великобритании (или правила “CASS”). Эти правила во многом основаны на MiFID. Если Вы сотрудничаете с IBUK и IBLLC на основе "представления", к Вашим активам будет применяться регламент хранения США.

Как описано выше, в дальнейшем мы не будем разграничивать два вида сотрудничества, и в каждом случае, описанном выше, для сотрудничества с IBLUX  будет действовать регламент хранения Люксембурга. Как и правила Управления финансового надзора Великобритании, этот регламент во многом основан на MiFID.

4. Каковы условия защиты от убытков? Будут ли существенные изменения в соответствующем регламенте сотрудничества с IBLUX по сравнению с IBUK?

На данный момент Ваши активы застрахованы либо в Корпорации защиты фондовых инвесторов (“SIPC”), либо Программой Великобритании по компенсации в сфере финансовых услуг ("FSCS"). Применяемый режим зависит от сегмента Вашего счета IBUK, как описано в вопросе B2 выше. После перевода для Вас начнет действовать Система Люксембурга по компенсации инвесторам (Système dindemnisation des investisseurs, SIIL), которая обеспечит сохранность Ваших активов в случае банкротства IBLUX.

Люксембургская система компенсаций схожа с доступной Вам в Великобритании, но у нее более низкий лимит. Она предназначена для возмещения потерянных Вами вложений (до определенной максимальной суммы) в одной из следующих ситуаций:

  • Комиссия Люксембурга по надзору за финансовым сектором (CSSF) решила, что фирма не в состоянии рассчитаться с инвесторами/выполнить свои обязательства или
  • Постановление суда препятствует возврату Ваших инвестиций фирмой.

Данная система реализуется Комиссией Люксембурга по надзору за финансовым сектором (фр. Commission de Surveillance du Secteur Financier, CSSF) и регулируется Советом по защите вкладчиков и инвесторов (фр. Conseil de protection des déposants et des investisseurs, CPDI). Если фирма, участвующая в системе, прекращает свою деятельность и оказывается неплатежеспособна, то у Вас может быть право на компенсацию согласно правилам системы.

IBLUX также относится к числу участников.

Охватываемые продукты включают:

  • Акции частных и публичных компаний
  • Бумаги коллективных инвестиционных схем
  • Облигации слежения
  • Фьючерсы и опционы

Как правило, Вы можете претендовать на компенсацию только после того, как фирма прекратит коммерческую деятельность, а ее активы будут ликвидированы и распределены между понесшими убытки лицами. Ознакомьтесь с ограничениями соответствующих систем – не все потери будут возмещены, поскольку действуют определенные лимиты. Система Люксембурга по компенсации инвесторам покрывает убытки максимум до 20 000 €.

5. Какова процедура подачи жалоб в IBLUX? Будут ли существенные изменения в соответствующем регламенте сотрудничества с IBLUX по сравнению с IBUK? Что делать, если моя жалоба относится ко времени, когда я еще являлся(-лась) клиентом IBUK?

Процедура подачи жалобы в IBLUX устанавливается новым Клиентским соглашением. Он в существенной степени совпадает с действующим в IBUK. Если жалоба касается чего-то, что произошло до Предлагаемого переноса, то ее следует адресовать IBUK. IBUK останется уполномоченной инвестиционной фирмой и после Брексита. Ее контактные данные не изменятся.

6. Останется ли у меня доступ к Службе финансового омбудсмена (FOS) Великобритании?

В случае жалоб инвесторы должны следовать процедурам, описанным в Клиентском соглашении. Служба финансового омбудсмена Великобритании утратит юридическую силу в отношении жалоб, как только произойдет перенос.

7. Как будет происходить обработка и защита моих личных данных? Будут ли мои отношения с IBLUX существенно отличаться от моих текущих отношений с IBUK в данном контексте?

Существенных изменений не произойдет.

 

ЧАСТЬ С – ДРУГИЕ ПРАКТИЧЕСКИЕ ВОПРОСЫ И ДАЛЬНЕЙШИЕ ШАГИ

 

1. С кем я могу связаться до и после Предлагаемого переноса, если у меня возникнут вопросы?

В целом, с любыми вопросами, возникшими до перевода Вашего счета, следует обращаться в IBUK, а после перевода — в IBLUX. Независимо от того, с кем Вы связались в Interactive Brokers, мы постараемся максимально быстро дать Вам ответ и соединим Вас с подходящим сотрудником или отделом.

2. Изменится ли предлагаемый выбор продуктов?

Мы полагаем, что большинство продуктов, доступных для торговли со счетов IBUK, также будут предлагаться в IBLUX. Однако действуют некоторые ограничения. Если Вы согласитесь на Предлагаемый перенос, то Ваш счет в IBLUX не будет поддерживать транзакции со следующими продуктами: (i) облигации; (ii) внебиржевые драгоценные металлы, и (iii) внебиржевые фьючерсы на металлы. Вдобавок в IBLUX недоступны валютные операции с кредитным плечом и "Программа повышения доходности акций", в которой Вы на данный момент можете участвовать.

Мы отдельно сообщим Вам, в какой мере Вас затрагивают эти изменения.

3. Я торгую внебиржевыми деривативами через IBUK — что случится с моими открытыми позициями?

Ваши открытые позиции будут переведены в IBLUX. Вы больше не будете связаны с IBUK правовыми отношениями по данным позициям. Мы вышлем Вам обновленный информационный документ (англ. Key Information Document, KID; воспользуйтесь ссылкой на соответствующую страницу в сопроводительном письме).

4. Что случится с залогом, предоставленным мной IBUK при маржинальном кредите?

Если Вы внесли залог или обеспечительный вклад, будучи клиентом IBUK/IBLLC, то он будет перемещен в IBLUX. Вам вряд ли придется принимать меры по смене бенефициара, но с нашей стороны могут потребоваться административные шаги, чтобы обновить регистры ценных бумаг. Это не должно повлиять на приоритет или дату вступления залога в силу.

5. Смогу ли я и дальше пользоваться текущей торговой платформой, или мне придется перейти на другое программное обеспечение после миграции?

Миграция не повлияет на ПО, которое Вы используете для торговли и контроля счета. Все системы останутся прежними.

6. Будут ли все средства переведены одновременно? Что произойдет с моим текущим счетом после миграции?

Ваш текущий счет будет закрыт после получения всех денежных начислений и их отправки на новый счет. После закрытия торговля с него станет невозможна, но у Вас останется доступ к его показателям и выпискам через меню выбора счета в "Портале клиентов".

7. Изменятся ли комиссии и сборы IBKR после миграции моего счета?

Нет. Комиссии и сборы IBKR не зависят от филиала, в котором находится Ваш счет.

8. Изменятся ли мои торговые разрешения после миграции счета?

После миграции Вы утратите возможность валютной торговли с кредитным плечом.

9. Будут ли активные ордера (например, ордер "Годен до отмены") перенесены вместе со счетом?

Активные ордера не будут перенесены на новый счет, и мы настоятельно рекомендуем Вам проверить их сразу после миграции, чтобы убедиться, что они соответствуют Вашим целям торговли.

10. Будет ли на меня распространяться правило США о системном дневном трейдинге после миграции счета?

Для счетов, находящихся в IBUK, действует правило США о системном дневном трейдинге (PDT), так как их операции перекладываются на IBLLC — брокера США. Правило PDT ограничивает счета, чей капитал составляет меньше 25 000 USD, до трех дневных сделок в течение пятидневного рабочего периода.

 

Поскольку операции счетов, переведенных в IBLUX, не будут происходить через IBLLC, правило PDT их не затронет

11. Получу ли я один общий годовой отчет по операциям в конце года?

Нет. Вы получите один отчет для Вашего текущего счета (от 1 января 2020 года до даты миграции) и второй отчет для нового счета (от даты миграции до 31 декабря 2020 года).

12. Сохранится ли базовая стоимость моих позиций после миграции счета?

Да, процесс миграции никак не повлияет на базовую стоимость позиций.

13. Останется ли конфигурация моего счета прежней?

Конфигурация счета после миграции будет сохранена в допустимой законом мере. Это касается таких характеристик, как рыночные данные, дополнительные пользователи, сигналы и право на маржу. В исключительных случаях счет будет переведен в юрисдикцию, где не разрешена торговля некоторыми продуктами. Владельцы счетов с такими продуктами смогут сохранить или закрыть эти позиции, но не увеличить их. 

14. Изменятся ли мои реквизиты для входа? 

 

Нет. Ваши имя пользователя, пароль и процесс двухфакторной аутентификации останутся прежними и после миграции. Однако Вашему счету будет присвоен новый ID-номер.

FAQS: IBLUX Brexit Account Migration

Overview: 

This is an important document regarding the proposed transfer of your account from IBUK and IBLLC to IBLUX that requires your attention. Please read the entirety of this document ahead of taking any action referred to in the Covering Letter sent to you via email.

Background: 

Please take time to read this article, which summarises some of the key changes to the regulatory framework brought about by the Proposed Transfer (as described below) and provides answers to some more general questions you may have. It should be read in conjunction with the Covering Letter sent to you via email and to which it was linked. If you require any further information, please get in touch with us using the contact details provided in that Covering Letter. This article supersedes the one previously made available to you titled “FAQs: Brexit Account Migration” (“Original FAQs”) as it reflects new information and we ask that you read it carefully. To the extent there is any inconsistency between this article and the Original FAQs, please rely on the information contained in this article.

Discussion:

This Information Leaflet is split into three parts.

  • Part A sets outs key information in relation to our proposal to transfer your business.
  • Part B covers key legal and regulatory topics that arise as a result of the arrangements covered in Part A.
  • Part C aims to answer any other questions you may have and provide some further and more practical information in relation to what will and will not be changing following the Proposed Transfer.

 PART A – THE PROPOSED TRANSFER

1. What is the situation currently and why do things have to change?

As you would be aware, at present, your relationship with Interactive Brokers is led by our entity based in the United Kingdom, specifically Interactive Brokers (U.K.) Limited (“IBUK”) and the services provided to you are provided by IBUK and, depending on the products you do business in, our US affiliate Interactive Brokers LLC (“IBLLC”). At present IBUK utilises what is known as a financial services passport to be able to perform its part of the service provision across continental Europe. Our working assumption is that following the end of the Brexit transitional period later this year, IBUK will lose the ability to do so and that from 1 January 2021 Interactive Brokers will need to make some changes in relation to which legal entity does business with you. 

2. What are the “changes” envisaged above?

We have established a new Interactive Brokers legal entity in Luxembourg, specifically, Interactive Brokers Luxembourg SARL (“IBLUX”). The proposal is to transfer the business that you currently conduct with IBUK and IBLLC to IBLUX. In other words, it is our intention that all of your accounts, investments and services currently provided by IBUK and IBLLC will instead be singularly provided by IBLUX (for convenience we will refer to this as the “Proposed Transfer”). 

3. When will the Proposed Transfer occur?

We will write to you again ahead of the Proposed Transfer.

4. Who is IBLUX? What sort of a firm is it?

IBLUX 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. IBLUX’s regulatory status and profile is very similar to IBUK’s. This is because both IBLUX and IBUK are authorised pursuant to the second Markets in Financial Instruments Directive. This is an EU-wide piece of legislation whose purpose is to, as much as possible, harmonise how investment firms are regulated. 

This does not mean there are not some differences between the regulations that apply to your relationship at present and those that will apply once your account is transferred. We explain these in more detail in Part B of this article. 

5. What are IBLUX’s legal details?

Interactive Brokers Luxembourg SARL is registered as a private company limited by shares (société à responsabilité limitée)  (registration number B229091) in the register of companies for Luxembourg. Its registered address is 4, rue Robert Stümper, L - 2557 Luxembourg. We are still finalising IBLUX’s day-to-day contact details and will be in touch with these in due course.   

6. Who will regulate IBLUX and what are their contact details?

The Luxembourg Financial Sector Supervisory Commission (CSSF) is the competent regulator for IBLUX (in the same way that the Financial Conduct Authority is the competent regulator for IBUK). The Luxembourg Financial Sector Supervisory Commission’s (CSSF) contact details are set out below:

Location

Commission de Surveillance du Secteur Financier

283, route d’ArlonL-1150

Luxembourg 

Postal Address

Commission de Surveillance du Secteur Financier

L-2991 Luxembourg

 

7. Where does IBLUX fit with respect to the broader Interactive Brokers group?

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

8. What does the Proposed Transfer mean for me? Will there be any material impacts?

We do not anticipate any material impacts. Nonetheless, it is very important you read this article and make sure you understand what the changes are.

9. What do I have to do if I want to continue doing business with Interactive Brokers?

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 attached to the Covering Letter and to the regulatory matters outlined in the Covering Letter. 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 you may be adversely affected by it. However, you should be aware that if you decide to decline, IBUK will likely not be able to keep servicing your account at the end of the Brexit transition period. If that happens, your account will be put in liquidation and we will ask you to transfer your assets to another broker. 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 Information Leaflet and the Covering Letter before deciding to consent to or decline to the Proposed Transfer.

10. What happens next?

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, IBLUX will write to you with further information about your new relationship with them.

 

PART B – LEGAL AND REGULATORY CHANGES THAT YOU SHOULD BE AWARE OF

1. What terms and conditions will govern your relationship following the Proposed Transfer? Are these different to the ones that currently apply?

Trades that you conduct after the Proposed Transfer will be governed by the new Customer Agreement between you and IBLUX. A copy of the new Customer Agreement will be presented to you online when you are provided with an opportunity to consent. Please see question A3 above in relation to the timing for the Proposed Transfer.

2. What conduct of business rules (including best execution) will apply to my relationship with IBLUX? Are there any material differences that apply to my relationship with IBLUX when compared to my existing relationship led by IBUK in this context?

There are some changes to be aware of, which we explain below.

If you do business with IBUK on a “carried” basis (in other words, you trade index options, futures and futures options and IBUK carries your account and custodies your assets) then the Financial Conduct Authority’s conduct of business rules currently apply to you. These rules are based heavily on the recast Markets in Financial Instruments Directive, the Markets in Financial Regulation and various delegated directives and regulation (collectively “MiFID”). In relation to best execution, where it applies, IBUK must take all sufficient steps to achieve the best possible result for you when we execute your order.

If you currently do business with IBUK on an “introduced” basis (in other words, you trade products outside of those mentioned in the previous paragraph and you have a relationship with both IBUK and its US affiliate, IBLLC) a mix of conduct of business rules currently apply to you. For instance, with respect to the introduction of your business to IBLLC, the Financial Conduct Authority’s conduct of business rules apply (see above in relation to these). Once introduced to IBLLC, the relevant U.S. Securities and Exchange Commission and U.S. Commodity Futures Trading Commission rules and regulations (among others) apply to IBLLC’s role (including its obligations in relation to best execution and custody).

Note more generally that it is of course possible that your business is split across these two scenarios (in other words, some of your business is conducted on a “carried” basis while some of it is conducted on an “introduced” basis).

Going forward, the distinction between “carried” and “introduced” business will no longer apply and in each case set out above, Luxembourg conduct of business rules will exclusively apply to your relationship with IBLUX. Like the UK Financial Conduct Authority’s rules, these are based heavily on MiFID and IBLUX’s obligations in relation to best execution mirror those that currently apply to IBUK.

In our view, while the rules that apply to our relationship will change, we do not consider such changes to be material or to result in a lesser degree of protection being afforded to you.

3. How will my investments that I custody with IBLUX be held from a legal/regulatory perspective? Are there any material differences that apply to my relationship with IBLUX when compared to my existing relationship led by IBUK in this context?

The rules that currently apply depends on the sort of business you presently have with IBUK (see B2 above). Where you conduct “carried” business with IBUK the, Financial Conduct Authority’s client asset (or “CASS”) rules will apply. These are based heavily on MiFID. Where you conduct “introduced” business with IBUK and IBLLC, the US custody rules will apply to your custody assets.

Going forward, as set out above, the distinction between “carried” and “introduced” business will no longer apply and in each case set out above, Luxembourg custody rules will exclusively apply to your relationship with IBLUX. Like the UK Financial Conduct Authority’s rules, these are based heavily on MiFID.

4. How am I protected against loss? Are there any material differences that apply to my relationship with IBLUX when compared to my existing relationship led by IBUK in this context?

Currently your eligible assets are protected from loss either under the US Securities Investor Protection Corporation or the UK Financial Services Compensation Scheme (which regime applies depends on the relevant segment of your IBUK account, as explained above in B2). After the Proposed Transfer, the Luxembourg Investor Compensation Scheme (Système d’indemnisation des investisseurs, SIIL) will protect your assets from loss should IBLUX default and be unable to meet its obligations to you.

Luxembourg’s compensation scheme is similar to the compensation scheme you have access to in the UK, albeit with a lower limit. The purpose of the Luxembourg Investor Compensation Scheme (Système d’indemnisation des investisseurs, SIIL) is to pay compensation to you (subject to certain limits) if you have invested money or investment instruments in either of the following cases:

  • An authorised firm that the CSSF has decided is not in a position to repay investors/meet its obligations, or
  • A court ruling prevents the firm from returning your investment.

The scheme is operated by the Luxembourg financial markets authority (Commission de Surveillance du Secteur Financier, CSSF) and managed by the Council of protection of depositors and investors (Conseil de protection des déposants et des investisseurs, CPDI). If a member firm of the scheme goes out of business and cannot return your money or investment instruments, you may be able to claim compensation from the scheme.

IBLUX is a member of the scheme.

The scheme covers investment products including:

  • Public and private company shares
  • Units in collective investment schemes
  • Tracker bonds
  • Futures and options

Usually 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. 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 Luxembourg Investor Compensation Scheme (Système d’indemnisation des investisseurs, SIIL) will pay you compensation for the amount you have lost, up to a maximum of €20,000.

5. How do I make a complaint to IBLUX? Are there any material differences that apply to my relationship with IBLUX when compared to my existing relationship led by IBUK in this context? What if my complaint relates to something that happened while I was a customer of IBUK?

The new Customer Agreement sets out how to lodge a complaint with IBLUX. The procedures are materially similar to those that apply to your existing relationship with IBUK. If the substance of your complaint relates to something that happened prior to the Proposed Transfer, then you should address your complain to IBUK. IBUK will remain authorised as an investment firm post-Brexit. Its current contact information will stay the same should you need to contact IBUK.

6. Will I still have access to the Financial Ombudsman?

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 UK Financial Ombudsman Service will cease to have jurisdiction over any complaints.

7. How will my personal data be processed and protected? Are there any material differences that apply to my relationship with IBLUX when compared to my existing relationship led by IBUK in this context?

There will be no material change.

 

PART C – OTHER PRACTICAL QUESTIONS AND NEXT STEPS

 

1. Who should I contact before the Proposed Transfer takes place and after the Proposed Transfer if I have any questions in the ordinary course?

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

2. Will the range of products and services offered be the same?

Our current expectation is that the majority of products that can be traded in the IBUK account will be offered by IBLUX. However, there are some limitations.  However, IBLUX will not offer the ability to transact leveraged foreign exchange or to adhere to the Stock Yield Enhancement Programme that is currently available to you. Clients that are residents of Luxembourg will also be restricted from trading Bonds.

Please note that IBLUX offers financing for securities and commodities trades but cannot support withdrawals of borrowed funds. You will be free to withdraw any free cash not needed to support your open positions. If you would like to withdraw additional funds, you can sell positions and withdraw the proceeds

To the extent you are impacted by this, we will separately get in touch with you.

3. I currently trade OTC derivatives with IBUK – what will happen to my open positions?

Your open positions will be transferred to IBLUX and your position will face IBLUX rather than IBUK. You will no longer have any legal relationship with IBUK in relation to those positions.

We will separately provide to you an updated  Key Information Document (please follow the link to the PRIIPs KID landing page in the Covering Letter).

4. What happens to any security I have granted IBUK as part of a margin loan?

If you have granted security or collateral to IBUK/IBLLC, it will transfer to IBLUX upon the Proposed Transfer. We do not anticipate you needing to take any steps to reflect the change in beneficiary, although we may need to take some administrative steps of our own to update security registers with the change in details. This should, however, not affect our priority or otherwise affect the date from which the security is valid.

5. Will I have access to the same trading platform or be subject to any software changes following migration?

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.

6. Will all account balances be transferred at the same time? What will happen to my current account following migration?

All balances, with the exception of accruals (e.g., interest, dividends) will be transferred at the same time. Once accruals have been posted to cash, they will automatically be swept to the migrated account

7. What will happen to my current account following migration?

Once all accruals have been  swept, your current account 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 archived activity and tax statements.

8. Will IBKR’s commissions and fees change when my account is migrated?

No. IBKR commissions and fees do not vary by the broker your account is maintained with.

9. Will my trading permissions change when my account is migrated?

Following migration, you will be restricted from engaging in leveraged forex transactions.

10. Will open orders (e.g., Good-til-Canceled) be carried over when my account is migrated?

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.

11. Will I be subject to the U.S. Pattern Day Trading Rule once my account is migrated?

Accounts maintained with IBUK are subject to the U.S. Pattern Day Trading (PDT) rule as the accounts are introduced to and carried by IBLLC, a U.S. broker. The PDT rule restricts accounts with equity below USD 25,000 to no more than 3 Day Trades within any 5-business day period.
 
As accounts migrated to IBLUX will not be introduced to IBLLC, they will not be subject to the PDT rule.

12. Will I receive a single, combined annual activity statement at year end?

No. You will receive an annual statement for your existing account which will cover the period starting January 1, 2020 through the date of migration and a second annual statement for your new account which will cover the period starting from the migration date through December 31, 2020.

13. Will the current cost basis of positions be carried over when my account is migrated?

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

14. Will the migrated account retain the same configuration as the current account?

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. 

15. Will my login credentials change? 
A: No. Your user name, 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.

 

Как запросить замещающее устройство защиты

Overview: 

Приведенные ниже шаги необходимы, чтобы:

  • Заменить утерянную, украденную или вышедшую из строя цифровую карту безопасности+ (ЦКБ+)
  • Запросить ЦКБ+ вместе с текущим устройством безопасности (если Вы являетесь новым или существующим клиентом с капиталом больше $500 000 или эквивалетной суммы в другой валюте)
Background: 

1. Сообщите в службу поддержки IBKR: обратитесь в службу поддержки IBKR для получения временного доступа к счету. Связаться с поддержкой можно только по телефону; во время звонка Вам будет необходимо подтвердить свою личность (подробнее см. в KB70).

2. Получите онлайн-карту кодов безопасности: активируйте онлайн-карту кодов безопасности, которая обеспечивает усиленную защиту и доступ к полной функциональности "Портала клиентов" в течение 21 дня. Подробнее о том, как получить карту, написано в статье KB1873 .

3. Запросите новое устройство защиты: активировав онлайн-карту кодов безопасности, запросите новую ЦКБ+ в том же разделе "Система безопасного входа" в "Портале клиентов".

 

Запрос цифровой карты безопасности+

1. Нажмите на кнопку Запрос физического устройства (Request Physical Device).

2. В окне сведений устройства отобразится адрес доставки. Если адрес неверен или изменился, нажмите Изменить адрес (Change Address) и следуйте инструкциям. Если адрес актуален, перейдите к шагу 3.

3. Введите четырехзначный Мягкий PIN1 (Soft PIN) для Вашей ЦКБ+. Запомните PIN-код, который Вы ввели, т.к. он понадобится для активации и использования устройства. При желании Вы можете сменить счет, на котором будут заморожены средства на сумму в 20 USD2.  Нажмите Далее.

4. Вы увидите данные своего заказа. Убедитесь, что они верны. Если Вы хотите внести изменения, нажмите на белую кнопку Назад под полем с данными (не в браузере). Если все верно, отправьте запрос, нажав Далее.

5. Вы увидите подтверждение с примерной датой доставки3. Для завершения нажмите OK .

Примечания

1. Руководство по выбору PIN-кода доступно в статье KB2269.

2. Ключ безопасности и доставка бесплатны, однако при заказе нового устройства на Вашем счете будет заморожена небольшая сумма (20 USD).  В случае потери, повреждения или кражи устройства, а также если оно не возвращено IBKR после закрытия счета, эта сумма будет использована в качестве компенсации его стоимости. В остальных случаях сумма станет доступна после того, как Вы вернете устройство IBKR. Подробнее в статье KB1861.

3. В целях безопасности замещающее устройство активируется автоматически по истечении 3-х недель с даты отправки. IBKR сообщит Вам о приближении срока и выполнении активации.

 

Справка
  • Обзор "Системы безопасного входа" доступен в статье KB1131
  • Информация и инструкции по устройствам безопасности доступны в статье KB2636
  • Инструкции об использовании устройства безопасного входа двумя или более пользователей доступны в статье KB2481 
  • О том, как снова присоединиться к "Системе безопасного входа", читайте в статье KB2545
  • Инструкции по возврату устройства безопасности IBKR доступны в статье KB975
  • Инструкции по активации аутентификации IB Key через IBKR Mobile доступны в статье KB2260
  • Информация о двухфакторной системе на нескольких устройствах (M2FS) доступна в статье KB2895
  • Информация о сборах и издержках, связанных с устройствами безопасности, доступна в статье KB1861
  • Информация о сроке действия временного пароля доступна в статье KB69

 

Information Regarding SIPC Coverage

1. Interactive Brokers LLC is a member of SIPC.    

2. SIPC protects cash and securities held with Interactive Brokers.   

3. SIPC does not generally cover commodity futures or options on futures.

4. SIPC protects cash, including US dollars and foreign currency, to the extent that the cash was "deposited with Interactive Brokers for the purpose of purchasing securities."

5. SIPC does not generally cover cash or foreign currency that is not "deposited with Interactive Brokers for the purpose of purchasing securities."  For example, SIPC does not generally cover cash in commodity futures trading accounts.

6. Interactive Brokers is not able to make any statements or representations about how cash deposited into a securities account in connection with forex trading or swept from a commodities account would be treated by SIPC. SIPC protection would depend in part on whether the cash was considered to be "deposited with Interactive Brokers for the purpose of purchasing securities." Interactive Brokers expects that at least one factor in deciding this would be whether and the extent to which the customer engages in securities trading in addition to or in conjunction with forex or commodities trading.  

Account holders seeking further information should refer such inquiries to their own legal counsel or SIPC.

Excess Margin Securities

The term "excess margin securities" refers to margin securities carried for the account of a customer having a market value in excess of 140 percent of the total debit balance in the customer's account. These securities are in excess of the securities held in a customer's margin account that are pledged by the customer as collateral for the margin loan and can be used to support the purchase of additional securities on margin

Example:

A customer whose account equity consists solely of a cash balance of USD 10,000 on Day 1 purchases 400 shares of stock ABC at USD 50 per share on Day 2.

Account Balance Day 1 Day 2
Cash $10,000 ($10,000)
Stock $0 $20,000 
Total $10,000 $10,000 

On Day 2, the customer's excess margin securities total USD 6,000. This is calculated by subtracting 140% of the margin debit or loan balance from the market value of the stock position ($6,000 = $20,000 - {1.4 * $10,000}).

The term is relevant from a regulatory perspective as the SEC requires that U.S. broker dealers segregate and maintain in a good control location (e.g., DTC or bank) all customer securities which are deemed excess margin securities. Such securities cannot be pledged or loaned to finance the activities of the firm or other customers without specific written permission from the customer. The portion of the securities classified as margin securities ($20,000 - $6,000 or $14,000 in this example) are subject to a lien and may be pledged or loaned by the broker to others to assist in financing the loan made to the customer.

Note that securities which were excess margin at the date of acquisition may later be reclassified as margin securities based upon the customer's subsequent trade and/or margin borrowing activity. For example, if the loan value of excess margin securities is subsequently used to acquire additional securities on margin, a portion of securities will then be reclassified as margin securities and subject to a lien. If the customer subsequently deposits cash or sells securities to reduce or eliminate the margin loan, the securities will be reclassified as excess margin or fully paid and are required to be segregated.
See also "fully paid securities".

Fully Paid Securities

The term "fully paid securities" refers to securities held in a customer's margin or cash account that have been completely paid for and are not being pledged as collateral to support the purchase of other securities on margin. The term is relevant from a regulatory perspective as the SEC requires that U.S. broker dealers segregate and maintain in a good control location (e.g., DTC or bank) all customer securities which are fully paid.  Such securities cannot be pledged or loaned to finance the activities of the firm or other customers.

Note that securities which were fully paid at the date of acquisition may later be reclassified as margin or excess margin securities based upon the customer's subsequent trade and/or borrowing activity. For example, if the loan value of fully paid securities is subsequently used to acquire additional securities on credit, a portion of securities will then be classified as margin securities and subject to a lien and potential pledge or hypothecation by the broker.

See also "excess margin securities".

Comparison of U.S. Segregation Models

INTRODUCTION
The regulation of securities and commodities products and brokers1 in the U.S. is administered by two distinct federal agencies, the Securities and Exchange Commission (SEC) for securities including stocks, ETFs, bonds, options and mutual funds and the Commodities Futures Trading Commission (CFTC) for commodities including futures and options on futures.2 While both agencies seek to safeguard customer assets by restricting their use and “segregating” them from assets of the broker, the regulations and manner in which they accomplish this differs. The following article provides a basic overview of two segregation models and additional considerations relating to IB accounts.


OVERVIEW
Differences between the CFTC and SEC segregation models originate largely from the products themselves, whose characteristics are fundamentally unique. Commodity products, by nature, do not involve an extension of credit by the broker to the customer as a futures contract is not an asset but rather a contingent liability which is marked-to-market and a long futures option, while an asset, must be paid for in-full. Consequently, non-option assets in a commodities account are generally comprised of funds deposited as margin to secure performance on the contracts therein. Since the broker may not use the funds of one customer to margin or guarantee the transactions of another, the commodities segregation requirement (CFTC Rules 1.20 – 1.30) is equal to the gross assets of all customers and the broker needs to add its own funds to segregation to cover customers whose net equity is in deficit.

A securities margin account, in contrast, can facilitate the extension of credit for the purpose of long securities (e.g., stocks, bonds) purchases or short securities sales on a secured basis. The segregation or reserve requirement rules recognize this through special provisions for the protection of each of the cash and securities components, further distinguishing fully-paid securities from those whose purchase the broker has financed and maintains a lien upon. Here, the broker must deposit into a separate bank account the net amount of customer cash balances3, in accordance with a formula set forth in SEC Rule 15c3-3. In addition, the broker must identify and segregate in a good control location (e.g., depository, bank) customer securities which meet the definition of “fully paid” or “excess margin”.

The table below provides a comparison of the main principals of each model.

COMPARISON OF CFTC & SEC SEGREGATION MODELS
PRINCIPAL CFTC SEC

Separation of Customer Balances

 

 

 

 

 

 

 

Commodity customer balances must be maintained separate from firm assets and cannot be used to finance proprietary business activities or to satisfy firm debts.

Funds used for trading on non-US commodity exchanges must be kept separate from those used for trading on U.S. exchanges (even for the same customer).

Commodity customer balances must also be maintained separate from securities customer balances (even for the same customer).

Securities customer balances must be maintained separate from firm assets and cannot be used to finance proprietary business activities or to satisfy firm debts.

Securities customer balances must also be maintained separate from commodity customer balances (even for the same customer).

 

 

Priority in the Event of Broker Default

 

 

 

 

 

 

Commodity customers maintain priority and equal claim over assets in each of their respective U.S. segregated and non-U.S. secured pools.

No claim on assets in a commodity pool in which one is not a participant and no claim on securities customer assets.

If commodity segregated assets are insufficient to meet claims and broker is insolvent, customers share equally in shortfall and become general creditors for residual claims.

Securities customers maintain priority and equal claim over assets.4

No claim on commodity segregated assets.

If securities segregated assets are insufficient to meet claims, broker is insolvent and claims exceed SPIC coverage, customers share equally in shortfall and become general creditors for residual claims.

 

Segregation Style

Gross – the broker may not use the funds of one customer to margin or guarantee the transactions of another and must segregate assets in an amount at least equal to the sum of all customer credit balances.

Net – broker may use customer cash credit balances to finance, on a secured basis, margin loans to other customers and may lend or pledge a portion of customer securities purchased on margin to other customers selling short.

 

Investment of Cash Balances  

Broker is allowed to reinvest commodity customer’s cash balances and retain an interest in the income generated.

Permissible investments include: U.S. government securities, municipal securities, government sponsored enterprise securities, bank CDs, corporate obligations (commercial paper, notes and bonds) fully guaranteed as to principal and interest by the U.S. under the Temporary Liquidity Guarantee Program and money market mutual funds.

Securities which are the subject of reinvestment must be maintained in a segregated account.
 

Broker is allowed to reinvest securities customer’s cash balances and retain an interest in the income generated.

Permissible investments limited to “qualified securities” defined as securities which are guaranteed as to both interest and principal by the U.S. government.

Securities which are the subject of reinvestment must be held in Special Reserve Bank Account (i.e., segregated).
Computation Frequency Daily Weekly
Insurance None Securities Investor Protection Corporation (SIPC) provides insurance of up to USD 500,000 with a cash sublimit of USD 250,000.

 

ADDITIONAL CONSIDERATIONS
In addition to the safeguards afforded through segregation, IB employs a number of policies and practices which serve to enhance the safety and security of accounts beyond that outlined above. These include the following:

- IB computes its securities segregation or reserve requirement on a daily rather than weekly basis as allowed by regulation, thereby ensuring timely determination as to the amount required to be reserved and the deposit of funds necessary to satisfy the requirement.

- IB’s does not avail itself of the generally more permissive rules with respect to the investment of commodity customer cash balances. These balances are instead invested in a manner similar to that of securities cash balances (i.e., U.S. government securities) with the exception of an occasional investment in money market funds.

- All customer securities positions are held in the securities segment of the Universal Account as opposed to the commodities (commodities margin met with cash and/or futures options), thereby limiting their hypothecation to the more restrictive rules of the SEC.

- In addition to SIPC coverage, IB maintains an excess SIPC policy with Lloyd's of London which, in aggregate with SIPC, offers insurance totaling $30 million (with a cash sublimit of $900,000), subject to an aggregate firm limit of $150 million.

- IB offers account holders the ability to sweep cash balances in excess of that required for margin purposes in either the securities or commodities segment to the other segment. Details as to this feature may be found in KB1851.

- For additional information regarding IB strength and security, please review the following website page.

 

Other Relevant Knowledge Base Articles:

Cash Sweeps

Information Regarding SIPC Coverage

 

Footnotes:

1The term broker as used in this article is intended to refer to an organization registered with both the SEC as a Broker-Dealer and the CFTC as a Futures Commission Merchant for the purpose of conducting customer transactions

2Single stock futures are a hybrid product jointly regulated by the SEC and CFTC and allowed to be carried in either account type.

3Including cash obtained through the use of customer securities such bank pledges or stock loans less cash required to finance customer transactions (e.g., stock borrows, customer fails to deliver of securities, or margin deposited for short option positions with OCC).

4Assets, or customer property, which securities customers share in proportion to their net equity claim, include cash, margin securities and fully-paid securities held in “street name”. IB does not hold securities in the customer’s name which are not considered bulk customer property.

How to request a Digital Security Card+ (DSC+) replacement

Overview: 

The below steps are required in order to:

  • Replace a Digital Security Card+ which has been lost, stolen or has become inoperable
  • Request a Digital Security Card+ alongside your current security device (if you are a new or existing Client with equity above $500,000, or equivalent)
Background: 

1. Notify IBKR Client Services- Contact IBKR Client Services to obtain a temporary account access. This service can only be provided via telephone and requires the identity of the account holder to be verified, as detailed in KB70.

2. Obtain an Online Security Code Card - Activate an Online Security Code Card, which offers enhanced protection and full Client Portal functionality for an extended period of 21 days. Please consult KB1873 should you need guidance for this specific step.

3. Request the DSC+ replacement - Once you have completed the Online Security Code Card activation, please remain in the Secure Login System section of the Client Portal and order your replacement DSC.

 

Request a DSC+

1. Click on the button Request Physical Device.

2. The shipping address will be shown in the device information screen. If your address is outdated or invalid, you can amend it by clicking on Change Address and following the on-screen instructions. If you do not need to update your address, please proceed to step 3.

3. Enter a four-digit Soft PIN1 for your DSC+. Please make sure to remember the PIN you are typing since it will be necessary to activate and to operate your device. When applicable and desired, you may change the account on which the 20 USD deposit will be kept on hold2.  Complete this step by clicking on Continue.

4. The system will show you a summary of your selection. Please make sure the information displayed is correct. Should you need to perform changes, click on the white Back button under the information field (not your browser back button), otherwise submit the request by clicking on Continue.

5. You will receive a final confirmation containing the estimated shipment date3. Click on Ok to finalize the procedure.

Notes

1. For PIN guidelines, please consult KB2269.

2. The Security token and the shipment are both free of charge. Nevertheless, when you order your device, we will freeze a small amount of your funds (20 USD).  If your device is lost, intentionally damaged, stolen or if you close your account without returning it to IBKR, we will use that amount as a compensation for the loss of the hardware. In any other case, the hold will be released once your device has been returned to IBKR. More details on KB1861.

3. For security reasons, the replacement device is set to auto-activate within three weeks from the shipment date. IBKR will notify you when the auto-activation is approaching and when it is imminent.

 

References
  • See KB1131 for an overview of the Secure Login System
  • See KB2636 for information and procedures related to Security Devices
  • See KB2481 for instructions about sharing the Security Login Device between two or more users
  • See KB2545 for instructions on how to opt back in to the Secure Login System
  • See KB975 for instructions on how to return your security device to IBKR
  • See KB2260 for instructions on activating the IB Key authentication via IBKR Mobile
  • See KB2895 for information about Multiple 2Factor System (M2FS)
  • See KB1861 for information about charges or expenses associated with the security devices
  • See KB69 for information about Temporary passcode validity

 

Cash Sweeps

Background
Underlying the IB Universal account are two separate sub-accounts or segments, one for the securities positions and balances which are subject to the customer protection rules of the SEC and another for the commodities positions and balances which are subject to the customer protection rules of the CFTC. This Universal account structure is designed to minimize the administrative overhead that customers would otherwise be exposed to were they to maintain two distinct accounts (e.g., transferring of cash between accounts, login and order submission through separate accounts, multiple statements, etc.) while preserving the separation required by regulation.

These regulations further require that all securities transactions be effected and margined in the securities segment of the Universal account and commodities transactions in the commodities segment.1  While the regulations allow for the custody of fully-paid securities positions in the commodities segment as margin collateral, IB does not do so, thereby limiting their hypothecation to the more restrictive rules of the SEC. Given the regulations and policies which direct the decision to hold positions in one segment vs. the other, cash remains the only asset eligible to be transferred between the two and for which customer discretion is provided.

Outlined below is a discussion as to the cash sweep options offered, the process for selecting an option as well as selection considerations.

 
Cash Sweep Options
Customers are provided with 3 sweep options, descriptions for which are provided below:
 
 1. Do not sweep excess funds – under this election, excess cash does not move from one segment to another unless necessary to:
a. Eliminate/reduce a margin deficiency in the other segment;
 
b. Minimize a cash debit balance and therefore interest charges in a given segment.  Note that this is the default option and sole option for account holders having only one of securities or commodities trading permissions.
 
2. Sweep excess funds into my IB securities account – here, cash balances are only held in the commodities segment to the extent necessary to satisfy the current commodities margin requirement. Any cash in excess of the margin requirement, generated as a result of either an increase in cash (e.g., favorable variation and/or transaction related) or decrease in the margin requirement (e.g., changes in the SPAN risk arrays and/or transaction related) will be automatically transferred from the commodities segment to the securities segment. Note that the account holder must have permissions to trade securities in order to select this option.
 
3. Sweep excess funds into my IB commodities account – here, cash balances are only held in the securities segment to the extent that they, along with any other securities positions having loan value, are needed to satisfy the current securities margin requirement. Note that the account holder must have permissions to trade commodities in order to select this option. 
 
Other items of note:
-  As the Universal account allows for cash balances to be held in a variety of denominations, a hierarchy exists for the purpose of determining which particular currency to transfer first when long balances in multiple currencies exist. In these situations the procedure is to first transfer balances denominated in the Base Currency, then USD and then the remaining long currency balances in order of highest to lowest.
 
- To minimize the likelihood of one segment incurring a margin deficiency following the sweep of excess cash to the other, the full excess will not be transferred and a buffer equal to 5% of the maintenance margin requirement will be retained. Similarly, to minimize the operational overhead of transferring nominal balances, balances will only be transferred if, after giving effect to the 5% margin cushion, the excess, if any, is not less than 1% of account equity or $200.
 
- When performing the pre-trade credit check to determine whether an account maintains sufficient equity to support a new order, excess cash maintained in one segment will be considered for trades conducted in the other (although a sweep will not occur until the trade has executed and only if it then remains necessary for margin compliance).  Accounts which are designated as a Pattern Day Trader and which are subject pre-trade credit check that takes into account the prior as well as current day's equity should pay particular attention to the Selection Considerations section below.
 
 
Selecting a Sweep Option
If your Account Management version contains a series of menu options on the left-hand side, select the Account Administration and then Excess Funds Sweep menu options. If your version has menu options across the top, select the Manage Account/Settings and then the Configure Account/Excess Funds Sweep menu options. Regardless of your version, you will be presented with a screen which appears as follows:
 

You may then select the radio button alongside the option of your choice and select the Continue button. Your choice will take effect as of the next business day and will remain in effect until a different option has been selected. Note that subject to the trading permission settings noted above, there is no restriction upon when or how often you may change your sweep method. 

 

Selection Considerations
While the decision to elect one segment vs. the other for the purposes of maintaining excess cash may involve subjective decisions and preferences unique to each customer (e.g. customer maintains assets which are significant and concentrated in one segment vs. the other), outlined below are several factors warranting consideration:
 
1. Pattern Day Trading Equity - The securities buying power of accounts designated by regulation as Pattern Day Traders (i.e., 4 or more day trades within a 5 business day period) is limited by the lesser of the current or prior day’s closing equity in the securities segment. As such, an election to sweep excess funds to the commodities segment will prevent the inclusion of such funds in this calculation, thereby potentially limiting the capacity to enter new orders. To maximize the use of equity for purposes of entering securities orders, one would need to elect to sweep excess fund to the securities segment.  Note that an election to the securities segment will not impair the ability to enter commodities orders as the pattern day trading rules do not apply to such accounts.
 
2. Insurance – SIPC protection is afforded to assets in the securities segment and there is no commensurate insurance scheme in place for the commodities segment. That being said, balances in excess of the SIPC $250,000 cash sub-limit ($900,000 Lloyd’s cash sub-limit, where applicable) are not afforded coverage. Customers of IB Canada and IB UK are also subject coverage rules as specified by CIPF and the FSCS, respectively.
 
3. Interest Income – all other things being equal, customers are likely to receive the most optimal interest income on long cash balances that have not been partitioned between the securities and commodities segments as they are not aggregated for interest credit purposes (since they are subject to distinct segregation pools and reinvestment rules). This, along with the fact that credits require maintenance of a minimum cash balance and that higher balances are afforded preferential rates are factors to be considered when making a sweep election.2
 
Other Relevant Knowledge Base Articles:
A Comparison of U.S. Segregation Models
 
 
Footnotes:
1As OneChicago single stock futures are a hybrid product jointly regulated by the SEC and CFTC, they can be purchased and sold in either account type. IB, however, conducts such transactions in the securities segment of the Universal account as this is necessary to provide margin relief between the single stock future and any qualifying stock or option position.
 
2Consider, for example, an account which maintains a long USD balance of $9,000 in each of the securities and commodities segments. Depending upon the benchmark Fed Funds Effective rate, the account would be eligible to earn interest on $8,000 ($18,000 - $10,000) if the two balances were held in a single segment, but since balances below $10,000 in either of the two segments are not eligible for interest, could not earn anything without electing a sweep option. Similarly, one would be eligible to earn interest at a higher tier if as a result of a sweep election the account holder was then able to achieve a long USD cash balance above $100,000 in a given segment. For additional information regarding interest calculations including a link to current benchmark interest rates, refer to KB39.

 

Securities Account Protection for Interactive Brokers India Customers

Customer accounts domiciled under Interactive Brokers India Pvt. Limited,(IBI) are awarded different account protection services than our IB-LLC and IB-UK clients. There are two major exchanges, the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), each one has established their own guidelines for investor grievances against exchange members and/or sub –brokers.

National Stock Exchange of India (NSE)

The NSE has established an Investor Protection Fund with the objective of compensating investors in the event of defaulters' assets not being sufficient to meet the admitted claims of investors, promoting investor education, awareness and research. The Investor Protection Fund is administered by way of registered Trust created for the purpose. The Investor Protection Fund Trust is managed by Trustees comprising of Public representative, investor association representative, Board Members and Senior officials of the Exchange.

The Investor Protection Fund Trust, based on the recommendations of the Defaulters' Committee, compensates the investors to the extent of funds found insufficient in Defaulters' account to meet the admitted value of claim, subject to a maximum limit of Rs. 11 lakhs (1.1 million USD) per investor per defaulter/expelled member.

Bombay Stock Exchange (BSE)

Currently trading is not offered on the BSE by Interactive Brokers.

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