FAQs: IBLUX Migration to IBIE Restricted Account

Background: 

As previously explained, Interactive Brokers Luxembourg SARL ("IBLUX") will no longer provide brokerage services to investors and is ceasing regular operations. In June 2021, we invited IBLUX’s existing clients to transfer their account to another Interactive Brokers entity or to otherwise move their account to a bank or a broker outside of the Interactive Brokers family. Despite being reminded repeatedly, you did not to take the actions required to move the assets held in your IBLUX account. As such we are transferring your account to our affiliate, Interactive Brokers Ireland Limited ("IBIE") ("Transfer") where your assets will remain in safe custody until we receive transfer instructions from you. These FAQs provide important factual, legal and regulatory information regarding the Transfer.

1.      What does the Transfer mean for me? What terms and conditions will govern my relationship with IBIE following the Transfer?

 

Following the Transfer, IBIE will be responsible for ensuring the safe custody of your assets and the following terms ("Account Terms") will govern your account and assets. You will not be able to place trades or make other financial decisions on your account and IBIE will not provide any investment services to you unless you sign the IBIE Customer Agreement and complete any other open steps needed to open an IBIE account. IBIE will send you an email following the Transfer with the steps to take to secure your login credentials to access your account at IBIE.

 

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

 

If you want to continue doing business with Interactive Brokers, we require your cooperation and action in order for IBIE to provide you investment services. Specifically, we need you to open a new account with IBIE, agree to and sign the Customer Agreement and any other required documents and provide any additional documents or information requested.

 

If you do not want to continue doing business with Interactive Brokers, you may instruct IBIE to transfer your assets to another broker or bank, and IBIE will comply with your instructions subject to applicable laws and IB's standard procedures.

 

3.      How will my assets be custodied with IBIE?

 

Until you agree to and accept the Customer Agreement and open a brokerage account with IBIE, IBIE will provide custody services in limited scope:

 

·         for any cash balance transferred to IBIE, you will be entitled to the amount of the cash balance in your account base currency on the date it is transferred to IBIE and IBIE will not convert your cash balance to another currency or pay any interest on cash that it holds in custody for you. 

 

·         for any financial instruments transferred to IBIE, you will be entitled to those financial instruments and IBIE will not provide any investment services in relation to your financial instruments while they are in IBIE’s custody. For example, IBIE will not take any measures to mitigate losses resulting from market movements. However, in the event your account has insufficient margin, IBIE will take appropriate measures and liquidate positions, without issuing a margin call to you, to bring your account in compliance with margin requirements which are subject to change. More information is provided in FAQ 10.

 

If you open an IBIE account, Irish custody rules will fully apply to your relationship with IBIE. Further information is provided in the IBIE Client Assets Key Information Document. Like the Luxembourg custody rules, the Irish conduct of business rules are based on the recast Markets in Financial Instruments Directive, the Markets in Financial Regulation and various delegated directives and regulations (collectively, "MiFID").

 

4.      Am I protected against loss? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX?

 

After the Transfer, the Ireland Investor Compensation Scheme may apply to your account. Ireland’s compensation scheme is similar to the compensation scheme you have access to in Luxembourg. The purpose of the Irish Investor Compensation Scheme is to pay compensation to you (subject to certain limits) if you have invested money or investment instruments in either of the following cases:

 

·         A firm goes out of business and cannot return your investments or money; and

 

·         A Central Bank of Ireland determination or a court ruling has been made under the Investor Compensation Act 1998.

 

The Investor Compensation Company DAC (ICCL) administers the scheme. IBIE will be a member of the scheme.

 

The scheme covers investment products including:

 

- Public and private company shares

- Units in collective investment schemes

- Life insurance policies (including unit-linked funds)

- Non-life insurance policies

- 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. 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 ICCL will pay you compensation for 90% of the amount you have lost, up to a maximum of €20,000.

 

5.      How do I make a complaint to IBIE?  What if my complaint relates to something that happened while I was a customer of IBLUX?

 

The IBIE complaints handling procedures are materially similar to those that apply to your existing relationship with IBLUX, but the scope of the complaint provisions is much narrower as the services provided to you are limited to IBIE's holding your assets in safe custody until you submit transfer instructions or become a full IBIE client. All formal complaints should be made using one of the following means: (i) by WebTicket in Account Management on the IBIE website; (ii) by letter to Complaints Handling, Compliance Department, IBIE Dublin Landings, North Wall Quay, North Dock, Dublin 1, Ireland; or (iii) by email to complaints@interactivebrokers.ie.

 

If the substance of your complaint relates to something that happened prior to the Transfer, then you should address your complaint to IBLUX. 

 

6.      After the Transfer, will I still have access to the CSSF to file a complaint?

 

In case of a complaint, investors should follow the complaints procedure as referred to in the IBLUX Customer Agreement. Once the 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 Ireland has a dispute resolution scheme in the form of the Financial Services and Pensions Ombudsman ("FSPO"). The FSPO is a free and independent statutory dispute resolution scheme for financial services. You may be eligible to make a complaint to the FSPO if you are an "eligible complainant". Details of who are “eligible complainants” can be found on www.fspo.ie. The FSPO can be contacted at:

 

Postal Address

Financial Services and Pensions Ombudsman

Lincoln House,

Lincoln Place

Dublin 2

D02 VH29

 

Telephone

+353 (0)1 567 7000

 

Email

Info@fspo.ie

 

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

 

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.

 

8.      Will the range of services be the same?

 

No. This account has been created solely for the safe custody of your assets while we wait for you to instruct us on where to transfer your assets or elect to become a full IBIE client. As a result, our services are limited to holding your assets and where relevant taking action to ensure you meet applicable margin requirements.

 

9.      Did you liquidate some or all the positions in my account to facilitate the Transfer?

 

As we previously wrote to you explaining, in many cases we liquidated positions in client accounts, back to the account’s base currency, to facilitate that Transfer to IBIE. Where positions remain, FAQs 10-11 address how they will be transferred and custodied at IBIE.

 

10.  I have a margin account. Are the margin terms governing my account different following the Transfer to IBIE?

 

No. Your obligations and responsibilities in connection with your margin account and trading on margin remain following the Transfer as they were at IBLUX. However, you are not able to freely operate the account, including opening of new positions, unless you become a full IBIE client. Please review the Account Terms for more information.

 

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

 

If you have granted security or collateral to IBLUX this will transfer to IBIE upon the Transfer taking place.

 

12.  Will all account balances be transferred at the same time and what is the timing?

 

All cash balances will be transferred at the same time, and 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.

 

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

 

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

 

However, while your assets are held in safe custody at IBIE until you either transfer your assets to another financial institution or to a new account with IBIE, IBIE will apply a monthly fee to hold your account initially set at Euro 100. The monthly fee can be amended at any time in IBIE’s sole discretion notification to you, which might be by way of email or IBIE’s website.

 

In addition, IBIE will not pay interest to you but shall charge interest to you at such interest rates and on credit or debit balances as are then set forth on the IBIE website.

 

Keep in mind, when the cash balance of your account is insufficient to cover these fees, IBIE may liquidate assets in the same manner IBLUX would liquidate assets before the Transfer.

 

14.  I have other questions about what will and will not be changing following the Transfer? 

 

If you still have questions, please contact IBKR Client Services.

 

FAQs: IBLUX Migration to IBCE Restricted Account

Background: 

As previously explained, Interactive Brokers Luxembourg SARL ("IBLUX") will no longer provide brokerage services to investors and is ceasing regular operations. In June 2021, we invited IBLUX’s existing clients to transfer their account to another Interactive Brokers entity or to otherwise move their account to a bank or a broker outside of the Interactive Brokers family. Despite being reminded repeatedly, you did not take the actions required to move the assets held in your IBLUX account. As such we are transferring your account to our affiliate, Interactive Brokers Central Europe Zrt ("IBCE") ("Transfer") where your assets will remain under custody in trust until we receive instructions from you. These FAQs provide important factual, legal and regulatory information regarding the Transfer.

1.      What does the Transfer mean for me? What terms and conditions will govern my relationship with IBCE following the Transfer?

 

Following the Transfer, IBCE will be responsible for ensuring the safe custody of your assets. The IBCE General Business Terms [https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=4500] ("GBR") will govern your account and assets while they are held under custody in trust at IBCE in this limited capacity. You will not be able to place trades or make other financial decisions on your account and IBCE will not provide any investment services to you unless you expressly agree to the GBR and sign the Client Agreement and complete any other open steps needed to open an IBCE account. IBCE will send you an email following the Transfer with the steps to take to secure your login credentials to access your account at IBCE.

 

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

 

If you want to continue doing business with Interactive Brokers, we require your cooperation and action in order for IBCE to provide you investment services. Specifically, we need you to open a new account with IBCE, expressly agree to the GBR and sign the Client Agreement and any other required documents, and provide any additional documents or information requested.

 

If you do not want to continue doing business with Interactive Brokers, you may instruct IBCE to transfer your assets to another broker or bank, and IBCE will comply with your instructions subject to applicable laws and IB's standard procedures.

 

3.      How will my assets be custodied at IBCE?

 

Until you agree to and accept the GBR and the Client Agreement and open a brokerage account with IBCE, IBCE will provide custody services in limited scope:

 

·         for any cash balance transferred to IBCE, you will be entitled to the amount of the cash balance in your account base currency on the date it is transferred to IBCE and IBCE will not convert your cash balance to another currency or pay any interest on cash that it holds in custody for you. 

 

·         for any financial instruments transferred to IBCE, you will be entitled to those financial instruments and IBCE will not provide any investment services in relation to your financial instruments while they are in IBCE’s custody. For example, IBCE will not take any measures to mitigate losses resulting from market movements. However, in the event your account has insufficient margin, IBCE will take appropriate measures and liquidate positions, without issuing a margin call to you, to bring your account in compliance with margin requirements which are subject to change. More information is provided in FAQ 10.

 

If you open an IBCE account, Hungarian custody rules will fully apply to your relationship with IBCE. Like the Luxembourg custody rules, the Hungarian conduct of business rules are based on the recast Markets in Financial Instruments Directive, the Markets in Financial Regulation and various delegated directives and regulations (collectively, "MiFID").

 

4.      Am I protected against loss?

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. To be eligible for the Fund, you must have a contractual relationship with IBCE.

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.

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:

·     the Central Bank of Hungary initiates liquidation proceedings of IBCE, or

·     a court orders the liquidation of IBCE. 

 

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

If you are eligible, 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:

·     100% up to the limit of the EUR equivalent of one million forints (EUR 2,805 on 5th September 2021),

·     above one million forints: 1 million forints and 90% of the part above one million forints to a maximum of EUR 100,000.

 

5.      How do I make a complaint to IBCE? What if my complaint relates to something that happened while I was a customer of IBLUX?

 

The GBR sets out how to lodge a complaint with IBCE. The IBCE complaints handling procedures are materially similar to those that apply to your existing relationship with IBLUX, but the scope of the complaint provisions is much narrower as the services provided to you are limited to holding your assets under custody in trust until you submit transfer instructions or become a full IBCE client.

 

If the substance of your complaint relates to something that happened prior to the Transfer, then you should address your complaint to IBLUX. 

 

6.      After the Transfer, will I still have access to the CSSF to file a complaint?

In case of a complaint, investors should follow the complaints procedure as referred to in the IBLUX Customer Agreement. Once the 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: 

 

Postal Address

Financial Arbitration Board

1525 Budapest

Pf. 172

 

Email

ugyfelszolgalat@mnb.hu

 

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

 

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.

 

 

8.      Will the range of services be the same?

 

No. This account has been created solely for the safe custody of your assets while we wait for you to instruct us on where to transfer your assets or elect to become a full IBCE client. As a result, our services are limited to holding your assets and where relevant taking action to ensure you meet applicable margin requirements.

 

9.      Did you liquidate some or all the positions in my account to facilitate the Transfer?

 

As we previously wrote to you explaining, in many cases we liquidated some or all positions in client accounts back to the account’s base currency to facilitate that Transfer to IBCE. Where positions remain, FAQs 10-11 address how they will be transferred and custodied at IBCE.

 

10.  I have a margin account. Are the margin terms governing my account different following the Transfer to IBCE?

 

No. Your obligations and responsibilities in connection with your margin account and trading on margin remain following the Transfer as they were at IBLUX. However, you are not able to freely operate the account, including opening of new positions, unless you become a full IBCE client.

 

Please review the provisions relating to margin in the IBCE Client Agreement [https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=4501], as they will apply to your account and assets while they are held under custody in trust at IBCE.

 

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

 

If you have granted security or collateral to IBLUX this will transfer to IBCE upon the Transfer taking place.

 

12.  Will all account balances be transferred at the same time and what is the timing?

 

IBCE will support a limited number of deposit currencies.  The following ten cash deposit currencies, the "Allowed Deposit Currencies" are: EUR, USD, GBP, CHF, DKK, NOK, SEK, HUF, CZK and PLN

 

Where appropriate to facilitate the Transfer, we converted long cash balances in other currencies 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.  

 

All cash balances will be transferred at the same time, and 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.

 

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

 

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

 

However, while your assets are held in custody in trust at IBCE until you either transfer your assets to another financial institution or to a new account with IBCE, IBCE will apply a monthly fee to hold your account initially set at Euro 100. The monthly fee can be amended at any time in IBCE’s sole discretion notification to you, which might be by way of email or IBCE’s website.

 

In addition, IBCE will not pay interest to you but shall charge interest to you at such interest rates and on credit or debit balances as are then set forth on the IBCE website. IBCE will also charge a currency handling fee for cash balances in currencies that have negative interest rates.

 

Keep in mind, if the cash balance of your account is insufficient to cover these fees, IBCE may liquidate assets in the same manner IBLUX would liquidate assets before the Transfer.

 

14.  I have other questions about what will and will not be changing following the Transfer? 

 

If you still have questions, please contact IBKR Client Services.

 

FAQs: IBCE Pre-Migration Action item Guide

Overview: 

As previously noted, IBKR will cease IBLUX’s regulated business, and as a result, will need to make some changes in relation to which legal entity does business with you. It is our intention that all of your accounts, investments and services currently provided to you by IBLUX will instead be provided by IBCE.

Prior to the Proposed Transfer occurring, certain action items must be completed in the Client Portal. These action items may include:

- Submission of Proof of Identity documentation

- Submission of Proof of Address documentation

- Completion of Identity Verification Selfie task

- Investment Portfolio Changes

Please carefully review this FAQ in order to complete the necessary action items and facilitate the Proposed Transfer. For more information on this transfer, please review the FAQs for IBCE.

How do I access pending items in Client Portal?

Follow the below procedure to access pending items in Client Portal:

  1. Log in to Client Portal.
  2. Click the Notifications (bell) icon in the top right corner. The number on the icon shows you how many total unread notifications you have.
  3. A drop-down menu will open showing your Pending Items, Corporate Actions and Messages.
  4. Click Pending Items.
  5. You can open and view any pending item to see the details of the item. Click the View button for the pending item you want to view.

 

What documents are acceptable for these tasks?

Acceptable documents for Proof of Identity and Proof of Address action items include the following:

Document Category Acceptable Documents (only one document per category is needed)

Proof of Identity of the Account Holder

Please provide a current and valid document (or documents) that contains the following: full name, date and place of birth, clear photograph, signature of the holder, document number, expiration date, and country of issue. If the information required is on multiple pages, please provide copies of all of those pages.

• Passport

• National Identity Card

• Driver’s License

Proof of Residential Address of the Account Holder

The document must clearly list the applicant's name and the relevant address and must be less than six months old unless otherwise specified. Please provide a scanned version of a hard copy bill.

• Utility Bill: For example, a bill for electricity, gas, water, landline telephone, home broadband, or TV. Mobile phone bills are not acceptable forms of proof of address.

• Council tax bill

• Home insurance bill

• Bank, mortgage or brokerage statement

• Signed and stamped letter from your bank on the bank’s letterhead confirming address

• Credit card statement (not older than six weeks)

• Government issued letters or statements: For example, we would accept a property tax bill, confirmation of residential address from the local authorities or a pension statement. Must be on official government letterheaded paper.

• Resident permit

• Driver’s license or national identity card: If you use your driver's license or national identification card as proof of identity, it cannot also be used as proof of address.

• For HUNGARY only: ADDRESS CARD which shows the current residential address.

 

What Investment Portfolio Changes do I need to make?

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

• EUR, USD, GBP, CHF, DKK, NOK, SEK, HUF, CZK and PLN

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.

Metals CFDs are offered by IBCE but spot and OTC metals futures are not. You will be requested to trade out of those positions before conversion to an IBCE account.

FAQs: IBIE Pre-Migration Action item Guide

Overview: 

As previously noted, IBKR will cease IBLUX’s regulated business, and as a result, will need to make some changes in relation to which legal entity does business with you. It is our intention that all of your accounts, investments and services currently provided to you by IBLUX will instead be provided by IBIE.

Prior to the Proposed Transfer occurring, certain action items must be completed in the Client Portal. These action items may include:

- Submission of Proof of Identity documentation

- Submission of Proof of Address documentation

- Completion of Identity Verification Selfie task

- Investment Portfolio Changes

Please carefully review this FAQ in order to complete the necessary action items and facilitate the Proposed Transfer. For more information on this transfer, please review the FAQs for IBIE.

How do I access pending items in Client Portal?

Follow the below procedure to access pending items in Client Portal:

  1. Log in to Client Portal.
  2. Click the Notifications (bell) icon in the top right corner. The number on the icon shows you how many total unread notifications you have.
  3. A drop-down menu will open showing your Pending Items, Corporate Actions and Messages.
  4. Click Pending Items.
  5. You can open and view any pending item to see the details of the item. Click the View button for the pending item you want to view.

 

What documents are acceptable for these tasks?

Acceptable documents for Proof of Identity and Proof of Address action items include the following:

Document Category Acceptable Documents (only one document per category is needed)

Proof of Identity of the Account Holder

Please provide a current and valid document (or documents) that contains the following: full name, date and place of birth, clear photograph, signature of the holder, document number, expiration date, and country of issue. If the information required is on multiple pages, please provide copies of all of those pages.

• Passport

• National Identity Card

• Driver’s License

Proof of Residential Address of the Account Holder

The document must clearly list the applicant's name and the relevant address and must be less than six months old unless otherwise specified. Please provide a scanned version of a hard copy bill.

• Utility Bill: For example, a bill for electricity, gas, water, landline telephone, home broadband, or TV. Mobile phone bills are not acceptable forms of proof of address.

• Council tax bill

• Home insurance bill

• Bank, mortgage or brokerage statement

• Signed and stamped letter from your bank on the bank’s letterhead confirming address

• Credit card statement (not older than six weeks)

• Government issued letters or statements: For example, we would accept a property tax bill, confirmation of residential address from the local authorities or a pension statement. Must be on official government letterheaded paper.

• Resident permit

• Driver’s license or national identity card: If you use your driver's license or national identification card as proof of identity, it cannot also be used as proof of address.

• For HUNGARY only: ADDRESS CARD which shows the current residential address.

 

What Investment Portfolio Changes do I need to make?

IBIE will offer the same range of products as IBLUX plus some additional products such as (i) Bonds; (ii) OTC Precious Metals, and (iii) OTC Metal Futures. IBIE will also offer the ability to participate in the Stock Yield Enhancement Programme. Please review the Stock Yield Enhancement Programme Agreement if you are interested in participating.

FAQs: IBCE Account Migration

Overview: 

This is an important document regarding the proposed transfer of your account from IBLUX to IBCE 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 FAQs, which summarises some of the key changes to the regulatory framework which will be brought about by the Proposed Transfer (as described below) and provides answers to some of the more general questions that you may have. The FAQs should be read in conjunction with the Covering Letter and the documents that are attached to the Covering Letter. If you require any further information, please get in touch with us using the contact details provided in the Covering Letter.

This FAQs is split into three parts.
 
  • Part A sets out key information in relation to the Proposed Transfer (as described below).
  • Part B covers key legal and regulatory topics that arise as a result of the Proposed Transfer (as described below).
  • Part C aims to answer any other questions that you may have and provides some further and more practical information in relation to what will and will not be changing following the Proposed Transfer (as described below).
 
PART A – THE PROPOSED TRANSFER
 
1.     What is the situation currently and why do things have to change?
 
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.
 
2.     What are the “changes” envisaged above?
 
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”).
 
3.     When will the Proposed Transfer occur?
 
The Proposed Transfer will occur soon after 30th June 2021. We will alert you just before processing the transfer of your account.
 
4.     Who is IBCE? What sort of a firm is it?
 
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.
 
5.     What are IBCE’s legal details?
 
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. 
 
6.     Who will regulate IBCE and what are their contact details?
 
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: 
 
Location
Central Bank of Hungary
1054 Budapest
Szabadság tér 9.
Hungary
 
Postal Address 
Magyar Nemzeti Bank
BKKP Pf. 777
 
Client Service, client complaints  
Address: 1013 Budapest, Krisztina krt. 39.
Phone:  +36 80 203 776
 
7.     Where does IBCE fit with respect to the broader Interactive Brokers group?
 
IBCE 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 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.
 
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 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.
 
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, IBCE 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 my relationship with IBCE 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 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.
 
2.     What conduct of business rules (including best execution) will apply to my relationship with IBCE? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBLUX?
 
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.
 
3.     How will my investments that I custody with IBCE be held from a legal/regulatory perspective? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBLUX?
 
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.  
 
4.     How am I protected against loss? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBLUX?
 
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:
  • The Central Bank of Hungary initiates liquidation proceedings of IBCE, or
  • A court orders the liquidation of IBCE. 
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:
  • 100% up to the limit of the EUR equivalent of one million forints (EUR 2,800 on 12th May 2021),
  • Above one million forints: 1 million forints and 90% of the part above one million forints to a maximum of EUR 100,000.
 
5.     How do I make a complaint to IBCE? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBLUX? What if my complaint relates to something that happened while I was a customer of IBLUX?
 
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.  
 
6.     After the Proposed Transfer, will I still have access to the CSSF to file a complaint?
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: 
 
Postal Address
Financial Arbitration Board
1525 Budapest
Pf. 172
 
Email
 
7.     How will my personal data be processed and protected? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBLUX in this context?
 
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.
 
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 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.
 
2.     Will the range of products offered be the same?
 
The differences in the offerings are as follows: 
 
  • Metals CFDs are offered by IBCE but spot and OTC metals futures are not.
  • Trading securities and derivatives in all the same markets you can now but if you trade outside of the Allowed Deposit Currencies (see #7) and the transaction results in a long cash balance we will auto-convert to your base currency.  If the transaction results in a short cash balance there will be no further action by IBCE as you can borrow in all available IBKR global currencies.
For further information please see “IBCE Multi-Currency Account Foreign Exchange Restrictions Disclosure”.
 
3.     Will the range of services be the same?
 
These are the changes to the services you are currently offered: 
  • GFIS investment research will not be available to clients of IBCE, but we plan to offer the service in the future. However, GFIS market data and news service offerings are unaffected.
 
4.     I currently trade OTC derivatives with IBLUX – what will happen to my open positions?
 
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.
 
5.     What happens to any security I have granted to IBLUX as part of a margin loan?
 
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:
  • Investment Loan Framework contract
  • Securities Lending Framework contract
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.
 
6.     Will I have access to the same trading platform or be subject to any software changes following migrations?
 
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.
 
7.     Will all account balances be transferred at the same time and what is the timing?
 
IBCE will support a limited number of deposit currencies.  The following ten cash deposit currencies, the “Allowed Deposit Currencies” are:
 
  • EUR, USD, GBP, CHF, DKK, NOK, SEK, HUF, CZK and PLN
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.
 
8.     Will all security, derivative, and commodity positions be transferred at the same time?
 
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.
 
9.     What will happen to my current account following migration? 
 
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.
 
10.    Will IBKR’s commissions and fees change when my account is migrated? 
 
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.
 
11.    Will my trading permissions change when my account is migrated? 
 
No. Your trading permissions will not change when your account is migrated for products that IBCE supports.
 
12.    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.
 
13.    Will I receive a single, combined annual activity statement at year end? 
 
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.
 
14.    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.
 
15.    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.
 
16. Will my login credentials change?
 
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.
 
 

 

FAQs: IBIE Account Migration

Overview: 

This is an important document regarding the proposed transfer of your account from IBLUX to IBIE 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 FAQs, which summarises some of the key changes to the regulatory framework which will be brought about by the Proposed Transfer (as described below) and provides answers to some of the more general questions that you may have. The FAQs should be read in conjunction with the Covering Letter and the documents that are attached to the Covering Letter. If you require any further information, please get in touch with us using the contact details provided in the Covering Letter.

This FAQ is split into three parts.
 
  • Part A sets out key information in relation to the Proposed Transfer (as described below).
  • Part B covers key legal and regulatory topics that arise as a result of the Proposed Transfer (as described below).
  • Part C aims to answer any other questions that you may have and provides some further and more practical information in relation to what will and will not be changing following the Proposed Transfer (as described below).
 
PART A – THE PROPOSED TRANSFER
 
1.     What is the situation currently and why do things have to change?
 
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.
 
2.     What are the “changes” envisaged above?
 
We propose to transfer the business that you currently conduct with IBLUX to our Irish affiliate, Interactive Brokers Ireland Limited (“IBIE”).  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 IBIE (for convenience we will refer to this as the “Proposed Transfer”).
 
3.     When will the Proposed Transfer occur?
 
The Proposed Transfer will occur soon after 30th June 2021. We will alert you just before processing the transfer of your account.
 
4.     Who is IBIE? What sort of a firm is it?
 
IBIE was granted authorisation by the Central Bank of Ireland to operate as an investment firm in December 2020. IBIE’s regulatory status and profile will be very similar to IBLUX’s. This is because both IBIE 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 IBIE.  We explain this in more detail in Part B of this FAQs.
 
5.     What are IBIE’s legal details?
 
Interactive Brokers Ireland Limited is registered as a private company limited by shares (registration number 657406) and is listed in the Register of Companies maintained by the Irish Companies Registration Office. Its registered address is 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland.  We are still finalising IBIE’s day-to-day contact details, and we will be in touch with these details in due course. 
 
6.     Who will regulate IBIE and what are their contact details?
 
As set out above the Central Bank of Ireland is the competent regulator for IBIE (in the same way that the Luxembourg Financial Sector Supervisory Commission (“CSSF”) is the competent regulator for IBLUX).  The Central Bank of Ireland’s contact details are set out below:
 
Location
The Central Bank of Ireland
New Wapping Street
North Wall Quay
Dublin 1
D01 F7X3
 
Contact Numbers
Phone: +353 (0)1 224 6000
Fax: +353 (0)1 224 5550
 
Postal Address
Central Bank of Ireland
P.O. Box 559
Dublin 1
 
Public Helpline
E-mail: enquiries@centralbank.ie
Lo-Call: 1890 777 777
Phone: +353 (0)1 224 5800
 
7.     Where does IBIE fit with respect to the broader Interactive Brokers group?
 
IBIE 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 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.
 
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 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.
 
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, IBIE 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 my relationship with IBIE 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 IBIE.  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.
 
2.     What conduct of business rules (including best execution) will apply to my relationship with IBIE? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX?
 
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 Irish conduct of business rules are based on MiFID.
 
3.     How will my investments that I custody with IBIE be held from a legal/regulatory perspective? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX?
 
Luxembourg custody rules currently apply to your accounts with IBLUX. These rules are based heavily on MiFID.  
 
Going forward, Irish custody rules will apply to your relationship with IBIE.  Like the Luxembourg custody rules, the Irish conduct of business rules are based on MiFID.  Please consult the Client Assets Key Information Document attached in the Important Information section in relation to the Irish custody regime.
 
4.     How am I protected against loss? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX?
 
Ireland’s compensation scheme is similar to the compensation scheme you have access to in Luxembourg. The purpose of the Irish Investor Compensation Scheme is to pay compensation to you (subject to certain limits) if you have invested money or investment instruments in either of the following cases:
 
  • A firm goes out of business and cannot return your investments or money; and
  • A Central Bank of Ireland determination or a court ruling has been made under the Investor Compensation Act 1998;
 
The Investor Compensation Company DAC (ICCL) administers the scheme. IBIE will be a member of the scheme.
 
The scheme covers investment products including:
 
  • Public and private company shares
  • Units in collective investment schemes
  • Life insurance policies (including unit-linked funds)
  • Non-life insurance policies
  • 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. 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 ICCL will pay you compensation for 90% of the amount you have lost, up to a maximum of €20,000.
 
5.     How do I make a complaint to IBIE? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX? What if my complaint relates to something that happened while I was a customer of IBLUX?
 
The new Customer Agreement sets out how to lodge a complaint with IBIE.  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.  
 
6.     After the Proposed Transfer, will I still have access to the CSSF to file a complaint?
 
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 Ireland has a dispute resolution scheme in the form of the Financial Services and Pensions Ombudsman (“FSPO”). The FSPO is a free and independent statutory dispute resolution scheme for financial services.  You may be eligible to make a complaint to the FSPO if you are an “eligible complainant”.  Details of who are “eligible complainants” can be found on www.fspo.ie. The FSPO can be contacted at:
 
Postal Address
Financial Services and Pensions Ombudsman
Lincoln House,
Lincoln Place
Dublin 2
D02 VH29
 
Telephone
+353 (0)1 567 7000
 
Email
 
7.     How will my personal data be processed and protected? Are there any material differences that will apply to my relationship with IBIE compared to those that apply to my existing relationship with IBLUX in this context?
 
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.
 
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 IBLUX with any questions that you may have prior to the Proposed Transfer, and you should contact IBIE 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.
 
2.     Will the range of products offered be the same?
 
IBIE will offer the same range of products as IBLUX plus some additional products such as (i) Bonds; (ii) OTC Precious Metals, and (iii) OTC Metal Futures. IBIE will also offer the ability to participate in the Stock Yield Enhancement Programme. Please review the Stock Yield Enhancement Programme Agreement if you are interested in participating.
 
 
3.     I currently trade OTC derivatives with IBLUX – what will happen to my open positions?
 
Your open positions will be transferred to IBIE and you will face IBIE 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 to consult the applicable Key Investor Information Document.
 
4.     What happens to any security I have granted to IBLUX as part of a margin loan?
 
If you have granted security or collateral to IBLUX this will transfer to IBIE upon the Proposed Transfer taking place.
 
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 migrations?
 
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?
 
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? 
 
No. Your trading permissions will not change when your account is migrated.
 
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 receive a single, combined annual activity statement at year end? 
 
No. You will receive an annual statement of your existing account which will cover the period starting 1 January 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 the end of the year.
 
12. 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.
 
13. 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.
 
14. Will my login credentials change?
 
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.
 
 

 

FAQS: IBCE Brexit Account Migration

Overview: 

This is an important document regarding the proposed transfer of your account from IBUK and IBLLC to IBCE 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 FAQs, which summarises some of the key changes to the regulatory framework which will be brought about by the Proposed Transfer (as described below) and provides answers to some of the more general questions that you may have. The FAQs should be read in conjunction with the Covering Letter and the documents that are attached to the Covering Letter. If you require any further information, please get in touch with us using the contact details provided in the Covering Letter. This FAQs 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 FAQs and the Original FAQs, please rely on the information contained in this FAQs.

 

Discussion: 

This FAQs is split into three parts. 

  • Part A sets outs key information in relation to the Proposed Transfer (as described below).
  • Part B covers key legal and regulatory topics that arise as a result of the Proposed Transfer (as described below).
  • Part C aims to answer any other questions that you may have and provides some further and more practical information in relation to what will and will not be changing following the Proposed Transfer (as described below). 

 

PART A – THE PROPOSED TRANSFER

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

As you will 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 its financial services passport 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 Hungary, namely, Interactive Brokers Central Europe Zrt.  (“IBCE”).  We propose to transfer the business that you currently conduct with IBUK and IBLLC to IBCE.  In other words, it is our intention that all of your accounts, investments and services currently provided to you by IBUK and IBLLC will instead be singularly provided by IBCE (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 IBCE? What sort of a firm is it?

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 IBUK’s.  This is because both IBCE and IBUK 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 IBUK and IBLLC 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. 

 

5. What are IBCE’s legal details? 

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.

 

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

The Central Bank of Hungary will be the competent regulator for IBCE (in the same way that the Financial Conduct Authority is the competent regulator for IBUK).  The  Central Bank of Hungary’s contact details are set out below: 

Location

Central Bank of Hungary

1054 Budapest

Szabadság tér 9.

Hungary

 

Postal Address

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

 

 7. Where does IBCE fit with respect to the broader Interactive Brokers Group? 

IBCE 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? 

The Proposed Transfer may have a material impact if you currently trade products that you will be restricted from trading following the transfer.  It is very important that you read these FAQs carefully, and in full, and make sure that you understand what the changes are for you.

 

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 Proposed Transfer and 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, IBUK may not be able to keep servicing your account at the end of the Brexit transition period.  If that happens, your account will be restricted from opening new transactions or transferring new assets.  You always have the ability to transfer your account 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 FAQs and the Covering Letter before deciding to consent to or decline 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, IBCE 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 my relationship with IBCE 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 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.

 

2. What conduct of business rules (including best execution) will apply to my relationship with IBCE? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBUK? 

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 regulations (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 will 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 will 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) will apply to IBLLC’s role (including its obligations in relation to best execution and custody). 

Please note 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, Hungarian conduct of business rules will exclusively apply to your relationship with IBCE.  Similar to the UK Financial Conduct Authority’s rules, the Hungarian conduct of business rules are based on MiFID and IBCE’s obligations in relation to best execution will largely 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 IBCE be held from a legal/regulatory perspective? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBUK? 

The rules that currently apply depends on the sort of business that you presently have with IBUK (please see the response to Question B2 above).  Where you conduct “carried” business with IBUK, the Financial Conduct Authority’s client asset (or “CASS”) rules will apply.  These rules 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, Hungarian custody rules will exclusively apply to your relationship with IBCE.  Like the UK Financial Conduct Authority’s rules, the Hungarian conduct of business rules are based on MiFID. 

 

4. How am I protected against loss? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBUK? 

Currently, your eligible assets are protected from loss either under the US Securities Investor Protection Corporation at an amount of up to USD 500,000 (subject to a cash sublimit of USD 250,000) or the UK Financial Services Compensation Scheme at an amount up to £50,000 (which regime applies depends on the relevant segment of your IBUK account, as explained in the response to Question B2 above).  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 the UK,   The purpose of the Fund is to pay compensation to you in the event that:

  • the Central Bank of Hungary initiates liquidation proceedings of IBCE , or
  • a court orders the liquidation of IBCE. 

 IBCE is a member of the Fund. 

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:

  • 100% up to the limit of the EUR equivalent of one million forints (EUR 2,800 on 12th December 2020),
  • above one million forints: 1 million forints and 90% of the part above one million forints to a maximum of EUR 100,000.

 

5. How do I make a complaint to IBCE? Are there any material differences that will apply to my relationship with IBCE compared to those that apply to my existing relationship with IBUK? What if my complaint relates to something that happened while I was a customer of IBUK? 

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 IBUK.  If the substance of your complaint relates to something that happened prior to the Proposed Transfer, then you should address your complaint 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. After the Proposed Transfer, will I still have access to the Financial Ombudsman Service? 

In case of complaint, investors should follow the complaints procedure as referred to in the Customer Agreement.  As explained in the Original FAQs, once the Proposed Transfer has taken place, the UK Financial Ombudsman Service will cease to have jurisdiction over any complaints that you may have in respect of IBUK.  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: 

Postal Address

Financial Arbitration Board

1525 Budapest

Pf. 172

 

Email

ugyfelszolgalat@mnb.hu

 

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

Please see the Original FAQs for further information. In summary 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 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.

 

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

IBCE and IBUK offer the same range of products for all categories except metals and forex. The differences in the offerings are as follows: 

  • Metals CFDs are offered by IBCE but spot and OTC metals futures are not.
  • Trading securities and derivatives in all the same markets you can now but if you trade outside of the Allowed Deposit Currencies (see #7) and the transaction results in a long cash balance we will auto-convert to your base currency.  If the transaction results in a short cash balance there will be no further action by IBCE as you can borrow in all available IBKR global currencies.
  • Foreign exchange spot trades at IBCE must be connected to an investment service transaction and its resulting cash flows.  To comply with this regulation, you will no longer be able to trade currencies on a speculative basis. 

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

 

 

3. Will the range of services be the same? 

There are two changes to the services you are currently offered: 

  • IBCE 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.
  • GFIS investment research will not be available to clients of IBCE; however GFIS market data and news service offerings are unaffected.

 

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

Your open positions will be transferred to IBCE and you will face IBCE rather than IBUK.  You will no longer have any legal relationship with IBUK in relation to those positions.  We will separately provide you with an updated Key Investor Information Document (please follow the link to the PRIIPs KID landing page in the Covering Letter).

 

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

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

  • Investment Loan contract
  • Securities Lending Framework contract

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.

 

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

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.

 

7. Will all account balances be transferred at the same time and what is the timing? 

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

  • EUR, USD, GBP, CHF, DKK, NOK, SEK, HUF, CZK and PLN

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, IBUK and/or IBL, 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 IBUK or IBLLC 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.

 

8. Will all security, derivative and commodity positions be transferred at the same time? 

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.

 

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

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.

 

10. Will IBKR’s commissions, interest and fees change when my account is migrated? 

IBKR commissions and fees on trading products 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.

 

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

No. Your trading permissions will not change when your account is migrated for products that IBCE supports. As discussed in (2) above, spot metals and OTC metal futures will not be available.

 

12. 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.

 

13. Will I be subject to the U.S. Pattern Day Trading ("PDT") Rule once my account is migrated? 

No. You will no longer be subject to the PDT rule.

 

14. Will I receive a single, combined annual activity statement reflecting the activity in both my IBUK and IBCE accounts? 

No.  Separate daily, monthly and annual activity statements will be provided for each of your IBUK 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.

 

15. 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.

 

16. 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.  Client’s holding restricted products (with the exception of OTC metals futures and spot metals), may migrate such positions but won’t be allowed to increase the position.

OTC metals futures and spot metals must be closed in your current IBUK account.

 

17. Will my login credential change? 

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.

Interactive Brokers Luxembourg SARL – MiFID Categorisation

Introduction
 
The European Union legislative act known as the Markets in Financial Instruments Directive, or MiFID, as amended by MiFID II, requires Interactive Brokers Luxembourg SARL (IBLUX) to classify each Client according to their knowledge, experience and expertise: "Retail", "Professional" or "Eligible Counterparty".
 
In accordance with MiFID II rules, IBLUX categorises most clients as Retail clients, providing them with a higher degree of protection.
 
Only those clients that are either regulated entities or funds managed by regulated fund managers, are categorised as Per Se Professional Clients.
 
The main differences in regulatory protections afforded to Professional Clients as compared with Retails Clients are:
 
1. Description of the nature and risks of packaged investments: A firm that offers an investment service with another service or product or as a condition of the same agreement with a retail client must: (i) inform retail clients if the risks resulting from the agreement are likely to be different from the risks associated with the components when taken separately; and (ii) provide retail clients with an adequate description of the different components of the agreement and the way in which its interaction modifies the risks. The above requirements do not apply in respect of professional clients. However, IBLUX will not make such differentiation apart from the case specified under point 3 below.
 
2. Investor protection measures on the provision of Contracts for Differences (“CFDs”): The European Securities and Markets Authority (“ESMA”) introduced product intervention measures on the provision of CFDs to retail investors. The measures include: (i) New leverage limits on the opening of a position, which may vary according to the volatility of the underlying asset; (ii) A margin close out rule on an account basis that standardises the percentage of margin at which providers are required to close out one or more open CFDs; (iii) Negative balance protection on a per account basis; (iv) A restriction on the incentives offered to trade CFDs; and (v) A standardised risk warning, including the percentage of losses on a CFD provider’s retail investor accounts. The above requirements do not apply in respect of professional clients.
 
3. Communication with clients: A firm must ensure that its communications with all clients are fair, clear and not misleading. However, the way in which a firm may communicate with professional clients (about itself, its services and products, and its remuneration) may be different from the way in which the firm communicates with retail clients. A firm’s obligations in respect of the level of details, medium and timing of the provision of information are different depending on whether the client is a retail or professional client. The requirements to deliver certain product-specific documents, such as Key Information Documents (“KID”) for Packaged Retail and Insurance-based Investment Products (“PRIIPs”), are not applied to professional clients.
 
4. Depreciation in value reporting: A firm that holds a retail client account that includes positions in leveraged financial instruments or contingent liability transactions must inform the retail client, where the initial value of each instrument depreciates by 10 per cent and thereafter at multiples of 10 per cent. The above requirements do not apply in respect of professional clients.
 
5. Appropriateness: When assessing appropriateness for non-advised services, a firm may be required to determine whether the client has the necessary experience and knowledge in order to understand the risks involved in relation to the product or service offered or demanded. Where such an appropriateness assessment requirement applies in respect of a client, the firm may assume that a professional client has the necessary experience and knowledge in order to understand the risks involved in relation to those particular investment services or transactions, or types of transaction or product, for which the client is classified as a professional client. A firm may not make such an assumption for a retail client and must determine that a retail client does have the necessary level of experience and knowledge.
 
IBLUX provides non-advised services and is not required to request information or adhere to the assessment procedures for a professional client when assessing the appropriateness of a given service or product as with a retail client, and IBLUX may not be required to give warnings to the professional client if it cannot determine appropriateness with respect to a given service or product.
 
6. The Ombudsman: The services of the Ombudsman may not be available to professional clients, unless they are, for example, consumers, small businesses or individuals acting outside of their trade, business, craft or profession.
 
7. Compensation: IBLUX is a member of the Luxembourg investor compensation scheme (Système d’indemnisation des investisseurs, SIIL). The SIIL provides cover for claims resulting from IBLUX inability to meet its obligations to clients in accordance with applicable legal and contractual conditions. The SIIL covers, under the legal conditions place investments up to an amount of 20,000 EURO or equivalent regardless of the number of accounts held by a client.
 
Re-categorisation as Professional Client
 
IBLUX allows its Retail Clients to request to be re-categorised as Professional Clients. Clients are notified of their Client Category and can check it at any time from Account Management, under Settings> Account Settings> MiFID Client Category. From this same screen, Clients can also request to change their MiFID Category.
 
IBLUX will consider re-categorising Retail Clients to Professional Clients in two instances:
 
1. Per Se Professional Clients can notify IBLUX that they consider that they should have been categorised as Per Se Professionals under the MiFID II rules, because at least one of the following conditions applies:

(i) authorised or regulated to operate in the financial markets; or

(ii) a large undertaking meeting two of the following size requirements on a company basis:

(a) balance sheet total of EUR 20,000,000;
(b) net turnover of EUR 40,000,000;
(c) own funds of EUR 2,000,000;

(iii) an institutional investor whose main activity is to invest in financial instruments. This includes entities dedicated to the securitisation of assets or other financing transactions.
 
2. IBLUX may treat Clients as Elective Professional Clients if, based on an assessment of the Client’s expertise, experience, and knowledge, IBLUX is reasonably assured that, in light of the nature of the transactions or services envisaged, the Client is capable of making its own investment decisions and understand the risks involved. Clients who do not meet the requirements to be categorised as Per Se Professional Clients can still request to be categorised as Elective Professional Clients.
 
To obtain such re-categorisation, Retail Clients must provide evidence that they satisfy at least two (2) of the following criteria:
 
1. Over the last four (4) quarters, the Client conducted trades in financial instruments in significant size at an average frequency of ten (10) per quarter.
 
To determine the significant size IBLUX considers the following:
 
a. During the last four quarters, there were at least forty (40) trades; and
b. During each of the last four (4) quarters, there was at least one (1) trade; and
c. The total notional value of the top forty (40) trades of the last four (4) quarters is greater than EUR 200,000; and
d. The account has a net asset value greater than EUR 50,000.
 
Trades in Spot FX are not considered for the purpose of this calculation.
 
2. The Client holds a portfolio of financial instruments (including cash) that exceeds EUR 500,000 (or equivalent);
 
3. The Client is an individual accountholder or a trader of an organisation account who works or has worked in the financial sector for at least one year in a professional position which requires knowledge of products it trades in.
 
Upon review and verification of the information and supporting evidence provided, IBLUX will re-categorise clients if all relevant conditions are met to satisfaction.

Retail Clients requesting to be re-categorised as Professional Accounts must read and understand the warning provided by IBLUX before the relevant request is submitted.
 
Re-categorisation as Retail Client 
 
Professional Clients can request IBLUX to be re-categorised as Retail Clients, from the same Account Management page described above (under Settings> Account Settings> MiFID Client Category).
 
With the sole exception of regulated entities or funds managed by regulated fund managers, which are categorised as Per Se Professional Clients, IBLUX accepts all such requests.
 
THIS INFORMATION IS GUIDANCE FOR INTERACTIVE BROKERS FULLY DISCLOSED CLEARED CUSTOMERS ONLY.
 
NOTE: THE INFORMATION ABOVE IS NOT INTENDED TO BE A COMPREHENSIVE, EXHAUSTIVE NOR A DEFINITIVE INTERPRETATION OF THE REGULATION, BUT A SUMMARY OF IBLUX’S APPROACH TO CLIENT CATEGORISATION AND RE-CATEGORISATION POLICY.

IBKR Luxembourg Account Types and Products Offerings

Interactive Brokers Luxembourg SARL (“IBKR Luxembourg”), which is a member of The Luxembourg investor compensation scheme (Système d’indemnisation des investisseurs, SIIL) and is regulated by the Commission de Surveillance du Secteur Financier (CSSF) has been established. IBKR Luxembourg clients, products and services have some unique characteristics when compared to the Interactive Brokers (“IBKR”) global account and product suite. The purpose of this document is to outline these characteristics of the IBKR Luxembourg offering.
 
Account Types
 
IBKR Luxembourg offers both cash accounts and margin accounts to all types of clients, including Individual / Joint account holders as well as trust account holders and corporate clients.
 
All eligible margin accounts employ a risk-based model to calculate margin requirements. Please click here for more details.
 
It should be noted that there are no separate Securities and Commodities segment in IBKR Luxembourg accounts. Therefore, the Excess Funds Sweep feature does not apply to the accounts.
 
IBKR Lite pricing is currently not available under IBKR Luxembourg.
 
Account Funding
 
Your account at IBKR Luxembourg can be funded via Wire transfer or SEPA transfer. You can withdraw funds out of your account at IBKR Luxembourg via Wire transfer.
 
CFD Product Offering
 
As a client of IBKR Luxembourg, provided that you have the requisite trading experience and expertise, which is outlined here, you will be able to trade all of exchange traded products available (including local and global stocks, options, futures, ETFs etc.) through IBKR’s award winning trading platform and software. In addition, you may also trade our Stock, Index and FX CFDs over the counter all within the one IBKR Luxembourg account.
 
Click here for information on IBKR Luxembourg’s CFDs.
 
FX Offering
 
As a client of IBKR Luxembourg you are allowed to hold on your account all the currencies supported at IBKR and you can convert between these currencies.
 
However, trading Forex with leverage is not supported at IBKR Luxembourg at the moment.
 
Spot Metals, Bonds
 
At the moment, Spot Metals are not supported at IBKR Luxembourg. Clients that are residents of Luxembourg are currently also restricted from trading Bonds.
 

 

IBKR Australia Account Types and Products Offerings

Interactive Brokers Australia Pty Ltd (“IBKR Australia”), which holds an Australian Financial Services License (“AFSL” No. 453554), has been established. IBKR Australia is headquartered in Sydney and has been set up to provide services to our Australian clients. IBKR Australia clients, products and services have some unique characteristics when compared to the Interactive Brokers (“IBKR”) global account and product suite. The purpose of this document is to outline these characteristics of the IBKR Australia offering.

Account Types

IBKR Australia offers both cash accounts and margin accounts to all types of clients, including Individual / Joint account holders as well as trust account holders and corporate clients.

For Self-Managed Superannuation Fund (“SMSF”) account holders, IBKR Australia only offers cash accounts.

Natural Person v Non-Natural Person

Under IBKR Australia clients will be categorised as either natural persons or non-natural persons.

A natural person client would include individuals / joint account holders, as well as trusts with at least one natural person trustee. A non-natural person client would include corporate entities as well as trusts with only non-natural person trustees.

Australian Regulatory Status

Under IBKR Australia clients will be classified as either a retail, wholesale or professional investor. All new clients of IBKR Australia default to being classified as a retail investor unless they produce the required documentary evidence to enable IBKR Australia to treat them as a wholesale or professional investor.

Refer to this link for information regarding Australian regulatory status under IBKR Australia.

Please click [Here] to download the wholesale investor booklet, and click [Here] to download the professional investor booklet.

Cash Accounts

IBKR Australia offer three different types of cash accounts:

  • Investment account
  • Trading account
  • SMSF account (only available to Self-Managed Superannuation Fund)

Investment Account: Similar to the IBLLC Cash account model, the IBKR Australia Investment account does not allow you to short securities or to borrow funds, i.e. your account cannot have a debit balance. Moreover, only a limited number of options strategies will be available. This account is not eligible for reduced intraday Futures margin.

This account is available for all clients except SMSF clients.

Trading Account: While this is also a cash account that does not permit you to have a debit balance, you will be permitted to short stock and trade any of the available option strategies in the Trading Account, provided that you have the requisite trading experience and expertise, which is outlined [Here]. Further, Trading Accounts enable you to trade with unsettled funds.

If you currently have an Investment Account, you can submit a change of account type to change to a Trading Account by logging into the Client Portal and clicking the User menu (head and shoulders icon in the top right corner) followed by Manage Account. Under Configuration, click the Configure tool next to Account Type. This may take 2-3 business days to review.

This account is available for all clients except SMSF clients.

SMSF: This is only available to SMSF clients. This is a cash account that does not permit you to short securities or to borrow funds, i.e. your account cannot have a debit balance. Moreover, only a limited number of options strategies will be available. This account is not eligible for reduced intraday Futures margin.

The options strategies that are available in the Investment Account and the SMSF account are as follows:

  • Long Call or Put
  • Covered Calls
  • Short Put
  • Call Spread; exdate(long) >= exdate(short)
  • Put Spread; exdate(long) >= exdate(short)
  • Long / Short Butterfly
  • Iron Condor

Margin Accounts

IBKR Australia offers two types of margin accounts that will provide all clients excluding SMSF clients with the ability to create portfolios to the maximum degree of risk taking/leverage allowed by IBKR Australia. The two account types are:

  • Leveraged Trading account
    • Available for both natural persons and non-natural persons, regardless of their regulatory status. However, there are some important differences between the margin accounts available for retail clients and wholesale clients, as outlined below.
  • Professional account
    • Available primarily for non-natural persons that are confirmed as a professional investor.

Important characteristics of IBKR Australia margin accounts are as follows:

  • All eligible margin accounts employ a risk-based model to calculate margin requirements. Please click [here] for more details.
  • Interest rates on financing may vary depending on the type of client obtaining margin. Please click [here] for more details.
  • For all natural person clients (e.g. individuals), only cash or marketable securities may serve as collateral for the margin lending facility, and the collateral deposited must be unborrowed & otherwise free of any mortgage or lien or other encumbrance. 
  • For all natural person clients, you may only withdraw funds from the margin facility for the limited purpose of repaying another margin lending facility which was used to acquire financial products.
    • However, if you are classified as retail you will be not permitted to withdraw from the margin facility if you are already borrowing funds via that facility, i.e. if you are already negative cash, or otherwise if the withdrawal would place your account into cash deficit. 
  • All retail natural person clients must meet specific financial thresholds in order to be granted a margin account, specifically income must be greater than AUD $40,000 or Liquid net worth must be greater than AUD $100,000. In addition, IBKR Australia is obliged to verify that the information concerning the client’s financial situation that was collected during the application is accurate and complete. If the verified information concerning the client’s financial situation does not meet the thresholds stated above and/or are not comparable to the financials declared by the client during the application, the client will not be granted margin. However, if the client has a valid and recent Statement of Advice (“SOA”) from their registered financial advisor or financial planner that recommends that the client can be issued a margin lending facility and that SOA is made available to IBKR Australia, this additional verification of the client’s personal financial position will not be required.
  • In addition retail natural person clients will not be granted a margin account if their occupation is either retired or unemployed or student.
  • For all retail clients (both natural person and non-natural person clients), margin loans will be capped at a specific amount (subject to change in IBKR Australia’s sole discretion). Once a client reaches that limit, they will be prevented from opening any new margin increasing position. Closing or margin-reducing trades will be allowed. Please click [here] for more details. 
  • For the non-natural person clients that are NOT categorized as retail clients, IBKR Australia is permitted to utilize for financing purposes a portion of the loan value of the stock these customers hold with IBKR Australia. In simple terms, IBKR Australia borrows money from a third party (such as a bank or broker-dealer), using the customer's margin stock as collateral, and it lends those funds to the customer to finance the customer's margin purchases.
  • Please take particular note of how we determine natural person v non-natural person for IBKR Australia trust accounts, as detailed above. It is imperative that if you hold a trust account with IBKR Australia and there exists individuals (natural persons) that are labelled as trustees in your account, then even if you have a corporate trustee, that trust would be considered a natural person trust. The difference between a natural person and non-natural person margin account can be significant as shown above. As a result, please contact customer service if you need to modify trustees.

CFD Product Offering

As a client of IBKR Australia, provided that you have the requisite trading experience and expertise, which is outlined [Here], you will be able to trade all of exchange traded products available (including local and global stocks, options, futures, bonds, ETFs etc.) through IBKR’s award winning trading platform and software. In addition, you may also trade our Stock, Index and FX CFDs and Spot FX over the counter all within the one IBKR Australia account.

In addition, IBKR Australia issue Contracts for Difference (“CFDs”) over global shares, indices and FX. These are only available to IBKR Australia clients. For further information on IBKR Australia's products and services, please see our website.

Refer to this link for information on IBAU’s share CFDs.
Refer to this link for information on IBAU’s index CFDs.
Refer to this link for information on IBAU’s FX CFDs.

FX Offering

IBKR Australia can only support currencies in AUD, USD, EUR and GBP and you can convert between these currencies. If you have cash balances in currencies other than IBA supported currencies (AUD, USD, GBP or EUR) these will to be converted into your nominated base currency.

IBAU clients, when permissioned, can trade in any market available across the IBKR network, even those outside the 4 supported currencies above. However, upon your instruction for any market outside the 4 supported currencies, IBKR Australia will automatically execute Forex conversions to ensure non-supported cash balances be cleared.

For example, if an IBKR Australia client using a Cash account wishes to buy HKD denominated securities, as long
as the client has sufficient available funds, the trade is permitted. To settle the trade, IBKR Australia will convert the existing cash balances into HKD. Similarly at a later date, if the same client wishes to sell their HKD denominated securities, IBKR Australia would automatically convert the HKD proceeds to the base currency by day end, once again leaving no residual HKD cash balances.

If an IBKR Australia client using a margin account has any positive or negative cash balances outside of the 4 supported currencies, it will be automatically converted to base currency by day end.

ASX24

In order to ensure continued compliance with our regulatory obligations, IBKR Australia will NOT accept any other form of collateral except cash for the purposes of determining whether you can trade or hold ASX24 products. If the margin requirements of ASX24 products cannot be met using cash, your account will be subject to automated liquidation.

 

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