IB Knowledge Base

FAQs: Account Migration from IB LLC to IBSJ

Overview:

This is an important document regarding the proposed transfer of your account from Interactive Brokers LLC (“IB LLC”) to Interactive Brokers Securities Japan, Inc. (“IBSJ”) that requires your attention. Please read the entirety of this document before deciding whether to accept or decline the Invitation sent to you via email.

Background:

This FAQ document summarizes 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 general questions that you may have. The FAQs should be read in conjunction with the Invitation. If you require any further information, please contact us via the details provided in the Invitation.

Part A sets out key information in relation to the Proposed Transfer (as described below).
Part B covers key legal and regulatory topics related to 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 are things changing?

Interactive Brokers Securities Japan, Inc. (“IBSJ”) was granted authorization by the Kanto Local Finance Bureau to operate as a Japanese securities firm in October 2005. At that time, we attempted to leverage the strength of Interactive Brokers Group (and its ability to provide clients access to global markets) by offering an account structure that would allow clients to access markets worldwide as well as the Japanese market, all through a single domestic account. In the course of establishing this structure, we realized our goal to provide access to overseas markets from a single domestic account would entail a degree of complexity due to differences in settlement in non-JPY currencies and Japanese domestic regulations. Therefore, we implemented an account structure to offer overseas (non-Japanese domesticated) products through IBSJ’s affiliated broker-dealer based in the U.S., Interactive Brokers LLC (“IB LLC”), intermediated by IBSJ, while offering Japanese domestic products through an IBSJ account.

IBSJ is now modifying this approach and will begin providing access to Japanese and Global markets directly, through a single IBSJ account. As a result, IB LLC will no longer support intermediated client accounts by IBSJ.

2. What “changes” will Japanese clients experience?

We propose to transfer the business that you currently conduct with IB LLC to IBSJ. In other words, it is our intention that the accounts, investments and services currently provided to you by IB LLC will instead be provided by IBSJ (for convenience we will refer to this as the “Proposed Transfer”).

3. When will the Proposed Transfer occur?

The Proposed Transfer is scheduled to commence soon after February 1, 2023. We will alert you just before processing the transfer of your account.

4. Who is IBSJ? What type of firm is it?

IBSJ is a Japanese online securities broker which is regulated by Kanto Local Finance Bureau under the

Registration No.187 for its financial business and regulated by Ministry of Economy, Trade and Industry (METI) / Ministry of Agriculture, Forestry and Fisheries (MAFF) for its commodity derivative business.

5. What are IBSJ’s legal details?

IBSJ is registered as a private company limited by shares and is listed in the Register of Companies maintained by Tokyo legal affairs bureau. Its registered address is Kasumigaseki Building 25F, 2-5 Kasumigaseki 3-Chose, Chiyoda-ku, Tokyo, 100-6025 Japan.

IBSJ’s website is available at: https://www.interactivebrokers.co.jp/en/home.php

6. Who will regulate IBSJ and where are their details?

As set out above, Kanto Local Finance Bureau (KLFB) is the competent financial business regulator for IBSJ while Ministry of Economy, Trade and Industry (METI) / Ministry of Agriculture, Forestry and Fisheries (MAFF) are the regulators for IBSJ’s commodity derivative business. IBSJ is also a member of Japan Securities Dealers Association (JSDA) and the Commodity Futures Association of Japan (CFAJ).

The details for the regulator and the self-regulatory organizations above are set out in the links below:

Kanto Local Finance Bureau (KLFB)
https://lfb.mof.go.jp/kantou/

Ministry of Economy, Trade and Industry (METI)

https://www.maff.go.jp/e/index.html

Ministry of Agriculture, Forestry and Fisheries (MAFF)

https://www.maff.go.jp/e/index.html

Japan Securities Dealers Association (JSDA)

https://www.jsda.or.jp/en/index.html

The Commodity Futures Association of Japan (CFAJ)

https://www.nisshokyo.or.jp/

7. Where does IBSJ fit in the broader Interactive Brokers group?

IBSJ 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?

It is very important that you read this FAQs carefully and make sure that you understand what the changes are for you. Initially, upon transferring your account, IBSJ will have a limited product offering. However, IBSJ plans to extend its offering (as further explained in Part C) and will notify you of new products you can trade.

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

In the coming weeks, we will write to you again and ask you to respond to our invitation to transfer your account to IBSJ.

If you would like to continue to do business with Interactive Brokers, we require your signed consent to the Proposed Transfer.

To be clear, you do not have to agree to the Proposed Transfer. However, please be aware that if you decide to decline or do nothing, IB LLC will not be able to keep servicing your account after the proposed account transfer period. 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 either IBSJ or another broker by April 17, 2023.

In either case, we ask that you read the entirety of this FAQ and the Invitation 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 communication we will send you in the coming weeks and we will prepare your account for the Proposed Transfer. If you already have an IBSJ account, your assets held in the IB LLC account will be consolidated into the IBSJ account following the Proposed Transfer. Following the Proposed Transfer, IBSJ will write to you with further information about the consolidated structure.

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

1. What terms and conditions will govern my relationship with IBSJ 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 IBSJ. 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 IBSJ?

The U.S. conduct of business rules apply to IB LLC accounts. These rules are based on the regulations and rules set by the U.S. Securities and Exchange Commissions (“SEC”).

The IBSJ account will be subject to Japan conduct of business rules, which include regulations and rules set by Financial Service Agency (“FSA”), Japan Securities Dealers Association (“JSDA”) and the Commodity Futures Association of Japan (“CFAJ”).

3. How will investments that I custody with IBSJ be held from a legal/regulatory perspective? Are there any material differences that will apply to my agreement with IBSJ compared to those that apply to my existing agreement with IB LLC?

U.S. law and regulations regarding custody of securities and customer funds apply to your accounts with IB LLC. These include rules set by the U.S. Securities & Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”). The US custody rules require that any cash and fully-paid securities held by IB LLC on your behalf must be held segregated from the assets of IB LLC.

Going forward, Japan custody rules will apply to your agreement with IBSJ. Similar to the U.S. custody rules, the Japan conduct of business rules are based on the regulations on segregation of customers assets set by Financial Instruments and Exchange Act (further explain below in Question B4).

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

IBSJ’s compensation scheme is different from the compensation scheme you have access to at IB LLC.

Currently, your eligible assets are protected from loss under the U.S. Securities Investor Protection Corporation at an amount of up to USD 500,000 (subject to a cash sublimit of USD 250,000).

After the Proposed Transfer, in the unlikely event of IBSJ’s failure, a certain amount of money is protected by the Japan Investor Protection Fund. The investor protection mechanism is as follows:

(1) Segregated custody by securities firms

When investors trade financial instruments (stocks or other securities), they entrust their assets such as money and financial instruments to a securities firm. If the securities firm keeps the assets entrusted by the customer separate from the securities firm's own assets, the customer's assets will be returned to the customer even if the securities firm fails.

This practice of keeping assets entrusted by customers separate from the securities firm's own assets is called segregated custody. This concept is central to investor protection, and segregated custody is required of all securities companies under the Financial Instruments and Exchange Law.

(2) Japan Investor Protection Fund

Under this segregated custody system, even if a securities firm files for bankruptcy protection, the assets entrusted by customers will be returned to them in full. However, for instances where the securities firm is unable to smoothly return the full amount for any reason, a compensation system is in place through the Japan Investor Protection Fund, which provides compensation up to 10 million yen per customer.

However, as explained in section (1) above, the Japan Investor Protection Fund regulation serves to prevent such a situation from occurring because the assets entrusted by customers will be returned to them if they are kept in the segregated custody of securities companies.

Please note that the Japan Investor Protection Fund (similar to the US rules) does not compensate for losses incurred by clients due to a drop in the market value of securities.

5. How do I make a complaint to IBSJ? Are there any material differences that will apply to my agreement with IBSJ compared to those that apply with IB LLC? What if my complaint relates to something that dates to when I was a customer of IB LLC?

The new Customer Agreement sets out how to file a complaint with IBSJ. The complaints handling procedures are materially similar to those that apply to your existing agreement with IB LLC. If the substance of your complaint relates to something that occurred prior to the Proposed Transfer, then you should address your complaint to IB LLC.

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

In case of a complaint, clients should follow the complaints procedure as referred to in the Customer Agreement. Once your account is transferred to IBSJ, the US regulators will cease to have jurisdiction over any complaints you may have in respect to IB LLC. However, please be aware that Japan has a dispute resolution process in the form of the Financial Instruments Mediation Assistance Center (FINMAC), a non-profit organization, to resolve complaints and disputes between customers and IBSJ regarding covered issues. Please refer to the following link for the details of FINMAC. https://www.finmac.or.jp/english/

7. How will my personal data be processed and protected? Are there any material differences that will apply to my agreement with IBSJ compared to those that apply to my existing agreement with IB LLC in this context?

Your data will be processed and protected in accordance with the IBSJ Privacy Policy. which can be found at: https://ndcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=4102&lang=ja. There will be no material change to how your data is protected now.

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 general questions?

Generally speaking, you should contact IB LLC with any questions that you may have prior to the Proposed Transfer, and you should contact IBSJ with any questions that you may have after the Proposed Transfer takes place. Regardless of who you contact at Interactive Brokers, we will ensure your query is promptly dealt with and we will make best efforts to expediate any issues related to the account migration.

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

The range of products offered by IBSJ will not be the same as what is currently offered at IB LLC. Initially, IBSJ will offer:

Fully-paid trading in overseas (non-Japanese domesticated) stocks, ETFs and exchange listed bonds that can be offered in Japan; and
The Japanese domestic listed stocks and derivatives, Japanese stock CFDs, and some Japanese yen-denominated overseas derivatives that IBSJ has historically offered.

All unsupported holdings in your IB LLC account need to be closed out before your account can transfer to IBSJ. If you hold any product other than those stated above, please take the time to close out such positions before the Proposed Transfer to allow for a smooth transfer of your account and to avoid any account restrictions.

IBSJ plans to expand the types of other overseas products that it offers in the coming months. We will update these FAQs with additional details as we do.

3. What currencies are supported at IBSJ?

Initially, IBSJ will only support Japanese yen (JPY). If you hold long or short positions in any currency other than JPY in your IB LLC account, you may convert those balances to JPY before the Proposed Transfer or IBSJ will automatically convert the balances to JPY once your account transfers.

At a later stage, IBSJ may support additional currencies, and you will be notified with additional details at that time.

4. What happens if I already have an account at IBSJ?

If you have an existing account with IBSJ, the assets in your IB LLC account will be transferred to your IBSJ upon the Proposed Transfer taking place. If you do not have an IBSJ account, we will create a new one for you.

5. Will I have access to the same trading platform or be subject to any software changes following the transfer of my account?

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.

5. 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 transferred account.

6. What will happen to my current account following the transfer of my account to IBSJ?

Once all accruals have been swept, your current IB LLC 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.

7. Will IBSJ’s commissions and fees change when my account is transferred?

No. IBSJ commissions and fees do not vary from the ones charged by IB LLC for your current account. However, since IBSJ is a Japanese securities broker, Japanese consumption tax will be added to all fees.

8. Will my trading permissions change when my account is transferred?

Your trading permissions will not change when your account is transferred for products that are supported by IBSJ. Unsupported trading permissions by IBSJ will not migrate to the IBSJ account.

9. 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. You must resubmit any orders when your account is migrated.

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

You will receive an annual statement for your existing IB LLC account which will cover the period starting 1 January 2023 through the date of transfer and a second annual statement for your new account at IBSJ which will cover the period starting from the migration date through the end of the year ending December 2023.

11. 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.

12. 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 market data, additional users, and alerts.

13. 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. If you have an existing IBSJ account, your account number will not change. If you do not have an IBSJ account and we create a new one for you, you will receive a a new account ID.

Account Structures

日本語

About Escrow Accounts for Sanctioned Securities

Overview:

An escrow account was opened in your name if you own securities that are subject to comprehensive sanctions imposed by the US Treasury Department's Office of Foreign Asset Control ("OFAC").

Why do I have an escrow account?

We created an “escrow account” for you to hold positions in sanctioned securities so they are segregated from your other holdings in accordance with sanctions regulations.

What is an escrow account?

This escrow account will be used only to hold your sanctioned securities, which cannot be traded or transferred.

Can I cancel my escrow account?

No, you are not able to cancel your escrow account so long as you hold sanctioned securities.

How do I access my escrow account?

Escrow accounts will be visible in Client Portal in the same way as all other accounts owned by the clients. You will have read only access to the new escrow account and obtain statements & reports.

Do I earn any interest / dividends on the assets held in escrow?

Yes, any interest or dividends paid by the issuer will be credited to the escrow account. These funds are not transferrable to your non-escrow account as they are also subject to sanctions.

How do assets held in escrow affect my account’s NAV?

Your escrow account is linked to your regular account(s) but its equity is not considered part of the value of your non-escrow account(s), as these securities are subject to sanctions.

How do assets held in escrow affect my margin limits?

All sanctioned securities are non-marginable and cannot be used as collateral to support other positions.

How do I generate statements for the escrow account?

You can generate statements through Client Portal just as you would for your regular account.

Can I generate separate and combined statements for my accounts?

Yes, statements should be generated in the same way you would if you held multiple non-escrow accounts.

Can I write off assets held in escrow from my taxes?

The tax impact of your escrowed assets may vary by your location. Interactive Brokers recommends you consult with a local tax professional to understand the specific tax impacts of these sanctioned securities.

Am I responsible for paying taxes on interest / dividends on assets held in escrow?

As stated above, the tax impact of your escrowed assets may vary by your location. IBKR recommends you consult with a local tax professional to understand the specific tax impacts of these sanctioned securities.

Is my escrow account subject to the same protections as my IBKR brokerage account?

Yes, your assets will remain in the escrow account but have the same protections as your IBKR brokerage account.

Account Structures

Information Regarding IBUK JISA (Junior Individual Savings Account)

1. What is a Junior ISA and what benefits does it offer your child?

Junior ISAs (Individual Savings Accounts), or JISAs, were introduced as a replacement for Child Trust Funds (CTFs). A Junior ISA is a tax-free savings or investment account to save or invest in for your child. There are two types of Junior ISA: a Junior cash ISA that pays interest, and a Junior stocks and shares ISA that lets you invest in “qualifying instruments” such as stocks and shares, funds, etc. The interest on cash accumulates on a tax-free basis, as does income and capital gains made on investments.

A Junior stocks and shares ISA is not an investment in its own right. The best way to think of a Junior stocks and shares ISA is as a ‘wrapper’ with which you can shelter your child’s savings and investments from both Income Tax and Capital Gains Tax. The IBUK Junior Stocks and Shares ISA lets you choose from a range of investments to invest in for your child (see below section 12 ‘What can I invest in for my child?’). You can select and manage your child’s IBUK Junior Stocks and Shares ISA yourself or arrange for your financial advisor to do so on your behalf (see below section 9 ‘Can I appoint a financial advisor to manage, on a discretionary basis, my child’s IBUK Junior Stocks and Shares ISA?’).

2. What ISA types are offered at IBUK?

Interactive Brokers (U.K.) Limited (IBUK) only offers stocks and shares ISAs (including, Junior Stocks and Shares ISA). IBUK does not offer cash ISAs (including, Junior cash ISA).

3. Who is eligible for a Junior ISA?

Your child is eligible for a Junior ISA if they’re under the age of 18, and resident in the UK. You can also open a Junior ISA for your child if you are a crown employee serving overseas.

A child cannot hold both a CTF (Child Trust Fund) account and a Junior ISA. This is relevant to anyone under 18 who was born between 1 September 2002, when CTFs were introduced, and 3 January 2011 when they came to an end. If your child holds a CTF account, you cannot open an IBUK Junior ISA since IBUK does not support CTF transfers, other Junior ISA providers may accommodate your Junior ISA request.

4. How many Junior ISAs can a child have?

A child can have no more than one Junior cash ISA and one Junior stocks and shares ISA at any one time (don’t have to be with the same provider). A child cannot hold both a CTF (Child Trust Fund) account and a Junior ISA.

5. Who can open a Junior ISA and who is the registered contact?

You can open a Junior ISA for a child if you’re their parent or legal guardian. The parent or legal guardian opening the account will be the ‘registered contact’, but the money will not be accessible to them and will always belong to the child. The child normally won’t be able to access the money until their 18^th birthday, at which point their Junior ISA is converted into an ‘adult’ ISA.

As the registered contact for a Junior ISA, you are the only person authorised to make decisions about the management of the account. You’ll also need to keep IBUK informed if the child’s personal details change, e.g., if they change their name, address, contact number, etc.

6. How do I change the registered contact for an IBUK Junior Stocks and Shares ISA?

You should use the Interactive Brokers change of registered contact form (via Client Portal) to change the registered contact for an IBUK Junior Stocks and Shares ISA. The existing registered contact must sign this application to authorise this change unless where certain exemptions apply.

NB. IBUK will not allow a child to be the Registered Contact upon their 16^th birthday, other ISA providers may allow this (i.e., once the child reaches the age of 16, the child can apply to become the Registered Contact).

For more information on how to change a registered contact please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays (see below section 30 ‘What if I have additional questions?’)

7. Who owns the Junior ISA and what happens when the child turns 18?

All payments made into a Junior ISA belong to the child (i.e., all payments made into the Junior ISA are a gift to the child and as such cannot be repaid to the subscriber if at a later date the subscriber changes their mind). The parent or guardian who opened the Junior ISA acts as the registered contact, but they can’t access the money once it has been deposited, unless there are exceptional circumstances (see below section 11 ‘Can I make withdrawals from a Junior Stocks and Shares ISA?’). When your child turns 18, the IBUK Junior Stocks and Shares ISA will automatically become an ‘adult’ IBUK Stocks and Shares ISA (i.e., when the child turns 18, account ownership is automatically transferred to them). As an adult, they’ll become the account holder, responsible for managing their account and able to withdraw monies. For more information on how this transfer of control (from the registered contact to the child (upon the child’s 18^th birthday)) works, please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays (see below section 30 ‘What if I have additional questions?’)

8. Can you lose your child’s money paid into a Junior Stocks and Shares ISA?

The value of investments your child holds in the IBUK Junior Stocks and Shares ISA and the income received from them can fall as well as rise. As a result, you may get back less than you invested in for your child. Past performance is not an indication of future performance, and some investments need to be held for the long term to achieve a return. The IBUK Junior Stocks and Shares ISA is an execution only service, Interactive Brokers does not provide investment advice. If you need advice about whether an investment is suitable, you need to consult a suitably qualified financial advisor.

9. Can I appoint a financial advisor to manage, on a discretionary basis, my IBUK Junior Stocks and Shares ISA?

Yes, you can appoint a financial advisor to manage the IBUK Junior Stocks and Shares ISA on your behalf. Click on the link for additional details:

https://ibkr.info/node/134

10. Can I trade on margin under the IBUK Junior Stocks and Shares ISA?

No. You can only open an IBUK Junior Stocks and Shares ISA under a GBP cash account type. A cash account requires that all transactions are made with available cash or long positions.

11. Can I make withdrawals from a Junior Stocks and Shares ISA?

No, unless exceptional circumstances exist. All payments made into the IBUK Junior Stocks and Shares ISA are a gift to the child and so cannot normally be withdrawn until the child turns 18. NB. withdrawals are permitted if the child is terminally ill or has died in accordance with the ISA Regulations.

12. What can I invest in for my child?

Under a Junior stocks and shares ISA you can invest in any of the following investments (also known as 'qualifying investments'):

- Shares;

- Securities issued by Companies;

- Recognised UCITS;

- Depository Receipts, American Depository Receipts and American Depository Shares.

13. What exchanges does IBUK support?

HMRC recognised exchanges supported by IBUK:

Country	Exchange
Australia	The Australian Stock Exchange (and any of its stock exchange subsidiaries)
Austria	Vienna Stock Exchange
Belgium	NYSE Euronext Brussels
Canada	NYSE Euronext Brussels Montreal Stock Exchange Toronto Venture Exchange (TSX Venture Exchange)
France	MATIF MONEP
Germany	Frankfurt Stock Exchange Stuttgart Stock Exchange
Hong Kong	Hong Kong Stock Exchange
Italy	Italian Stock Exchange (Borsa Italia)
Japan	Tokyo Stock Exchange Osaka Stock Exchange
Lithuania	NASDAQ OMX Vilnius
Mexico	Mexico Stock Exchange
Poland	Warsaw Stock Exchange
Singapore	Singapore Exchange Limited
South Korea	Korea Exchange
Spain	Spanish Stock Exchange (Bolsa de Valores in Madrid)
Switzerland	Swiss Stock Exchange (SIX Swiss Exchange)
United Kingdom	London Stock Exchange
United States of America	BATs Exchange Inc Chicago Board Options Exchange Chicago Stock Exchange International Securities Exchange National Stock Exchange New York Stock Exchange NYSE ARCA NASDAQ OMX PHLX NASDAQ

14. What is the Junior ISA Allowance for 2022/2023 tax year?

Tax year runs from 6 April to the following 5 April. Each tax year’s Junior ISA subscription limit is specific to that year and can be checked on the HMRC website.

NB. For each tax year, you can check (via the funding page in Client Portal) how much you have subscribed to your child’s IBUK Junior Stocks and Shares ISA and the maximum amount that you can contribute to your child’s IBUK Junior stocks and shares ISA in that tax year, assuming you have not contributed to another Junior ISA away from Interactive Brokers.

For the 2022/23 tax year, the Junior ISA annual subscription limit is £9,000. This is a combined annual limit across both types of Junior ISA: cash, and stocks and shares. The subscription limit can be split in any way between cash, and stocks and shares Junior ISAs each tax year.

15. How do I make subscriptions to my IBUK Junior Stocks and Shares ISA?

You can make one-off payments (wire transfers deposits) as and when you choose, but the combined total of all payments (or subscriptions) must not exceed any given annual tax year allowance (see section 14. What is the 2022/2023 Junior ISA Allowance?).

Interactive Brokers accepts wire transfers only, and there is a minimum subscription amount of £1. Your child’s IBUK Junior Stocks and Shares ISA can only have GBP cash.

Although other Junior ISA providers might have different terms, only parent or legal guardian can pay into your child’s Junior ISA with IBUK.

16. Does Interactive Brokers have any mechanisms in place to ensure customers do not exceed the Junior ISA allowance for the relevant tax year?

Yes. Interactive Brokers has in place internal controls to prevent customers from exceeding the Junior ISA allowance by splitting the customers’ payments (once received by Interactive Brokers) as follows:

crediting the allowable subscription to the customer’s IBUK Junior Stocks and Shares ISA; and
crediting the potential over-contribution amount as follows:
- if you already have other account(s) with IBUK, Interactive Brokers will credit the potential over-contribution amount to such account(s);
- if you don’t have other account(s) with IBUK, Interactive Brokers will open a new non-ISA cash only (GBP) account on your behalf and credit the potential over-contribution amount to this new and additional account.

In either case, Interactive Brokers will notify you (via a pop-up message in the Client Portal, email and Message Center message) of the above actions and you will always have the possibility of withdrawing the potential over-contribution from your other non-ISA account(s) with IBUK (as described above).

Worked example:

Assuming your child has only one type of Junior ISA which is an IBUK Junior Stocks and Shares ISA. The annual Junior ISA allowance for 2022/2023 tax year is GBP 9,000. You initially contribute GBP 8,000.

For the same tax year (2022/2023) you then send GBP 2,000 to Interactive Brokers and request such funds to be credited to your child’s IBUK Junior Stocks and Shares ISA.

If Interactive Brokers actioned your request and credited the full amount (GBP 2,000) to your child’s IBUK Junior Stocks and Shares ISA, you would have exceeded your child’s Junior ISA allowance for the tax year 2022/2023 by GBP 1,000 (as the maximum you can contribute for the tax year 2022/2023 is GBP 9,000).

Instead, to prevent over-contribution, upon receipt of your funds Interactive Brokers will carry out the following actions:

(1) credit your funds (GBP 2,000) to your existing other non-ISA account(s) with IBUK (if you already have one or more accounts).

(2) if you don’t already have an existing other account(s) with IBUK, Interactive Brokers will open a new cash only (GBP) non-ISA account on your behalf and credit your funds (GBP 2,000) to this new and additional account.

(3) Interactive Brokers will then automatically transfer GBP 1,000 from your other non-ISA account with IBUK to your child’s IBUK Junior Stocks and Shares ISA.

17. What happens if I exceed my child’s Junior ISA allowance?

If you have accidentally paid too much into your child’s Junior ISAs your child won’t get any tax relief on the excess payments you’ve made. The Junior ISA allowance is a combined annual limit across both types of Junior ISA: cash, and stocks and shares.

18. What should I do if I exceed my child’s Junior ISA allowance?

In the event you oversubscribe to your child’s Junior ISA (in other words your child’s Junior ISA annual allowance was exceeded), you should not attempt to correct the mistake by withdrawing the excess funds from a Junior ISA (including, but not limited to, your IBUK Stocks and Shares ISA). Instead, you should call HMRC’s ISA helpline to explain the situation and inform them about the oversubscription. HMRC will advise you on the next steps. NB. The Junior ISA allowance for the tax year 2022/2023 is GBP 9,000 (this is a combined limit across both types of Junior ISA: cash, and stocks and shares).

19. What is the annual fee for the IBUK Junior Stocks and Shares ISA?

There is no annual Junior ISA fee at IBUK. Other costs and charges apply, see below section 20 for more information.

20. What are the charges for the IBUK Junior Stocks and Shares ISA?

£1 per month minimum activity fee.

One free withdrawal per month. Thereafter, £7 withdrawal fee is applicable.

Click on the link for an overview of our commissions:

https://www.interactivebrokers.co.uk/en/index.php?f=39753&p=stocks

21. How do I transfer my child’s Junior Stocks and Shares ISA from my current ISA manager to IBUK?

You will need to submit a transfer instruction to Interactive Brokers (via the transfer & pay funding page in Client Portal), and if, in IBUK’s discretion IBUK decides to accept the transfer, IBUK will instruct your existing ISA manager to transfer the investments (where IBUK supports such investments) and/or cash into your child’s IBUK Junior Stocks and Shares ISA. Where IBUK does not support all the investments held at your existing ISA Manager, you can either liquidate these investments yourself prior to submitting your transfer instruction to IBUK via Client Portal (any cash proceeds of such liquidation will be transferred into your child’s IBUK Junior Stocks and Shares ISA) or you can instruct IBUK (as part of your transfer instruction via Client Portal) to do so on your behalf. NB. IBUK does not accept the transfer of a Child Trust Fund (CTF) over to a Junior Stocks and Shares ISA, other Junior ISA providers might support such transfer service.

Transfers between an ‘adult’ ISA and Junior ISA are not permitted.

22. How do I transfer a Junior ISA out of IBUK to another provider?

Any transfer out request from IBUK must be requested via the transfer & pay funding page in Client Portal.

23. What are the Transfer Charges?

Interactive Brokers does not charge for transfers (the transferring ISA manager may charge you for transferring investments or cash proceeds to us).

24. Can I cancel my IBUK Junior Stocks and Shares ISA?

You have a legal right to cancel your child’s IBUK Junior Stocks and Shares ISA if you change your mind but there are time limits on doing so, see below section 25 for more information.

25. How can I cancel my child’s IBUK Junior Stocks and Shares ISA?

If you want to cancel your child’s IBUK Junior Stocks and Shares ISA, you must do so within 14 days from the date you receive our email confirming the establishment of your child’s IBUK Junior Stocks and Shares ISA (a cancellation must be requested from the Client Portal).

Cancellation rights will also apply to the receipt of transfer payments. You have 14 days from the date you receive our email acknowledging the transfer to exercise your right to cancel (a cancellation must be requested from the Client Portal). NB. If you cancel the transfer of your child’s Junior Stocks and Shares ISA from another ISA manager to IBUK, that ISA manager may not agree to accept the Junior Stocks and Shares ISA back. This may result in that Junior Stocks and Shares ISA being closed, and the tax benefits being lost.

26. How safe is your child’s IBUK Junior Stocks and Shares ISA?

IBUK is authorised and regulated by the Financial Conduct Authority, and is approved by HMRC to act as an ISA manager (including in respect of Junior Stocks and Shares ISA). Your account is held with IBUK’s US affiliate, Interactive Brokers LLC, regulated by the US SEC and CFTC and member of the SIPC (www.sipc.org) compensation scheme.

Your child’s IBUK Junior Stocks and Shares ISA will not be covered by the Financial Services Compensation Scheme (FSCS) in the UK. Instead, your eligible assets are protected from loss under the US SIPC at an amount of up to USD 500,000 (subject to a cash sublimit of USD 250,000). As with all securities firms, this coverage protects against the failure of a broker-dealer, not against the loss of market value of securities. You will not get any compensation only because the value of your investments falls.

IBUK and Interactive Brokers LLC are part of the Interactive Brokers Group. The Interactive Brokers Group, Inc. is a listed public company trading on U.S. markets under the symbol “IBKR” with a market capitalization of over USD 30 billion, as of Nov 17, 2021. On a consolidated basis, IBG LLC exceeds USD 10 billion in equity capital, over USD 6.2 billion in excess of regulatory requirements. IBG LLC's owners are the public company, Interactive Brokers Group, Inc. and the firm's employees and their affiliates. Client money is segregated in special bank or custody accounts, which are designated for the exclusive benefit of clients of Interactive Brokers. Interactive Broker’s client equity as of Oct 30, 2021 was USD 380.9 billion.

27. How can I file a complaint with IBUK?

Customers are actively encouraged to use the WebTicket system for prompt attention.

A copy of our Complaints Procedure is available here: https://www.interactivebrokers.com/en/index.php?f=292. You can also direct your ISA specific complaints via email to isa@interactivebrokers.co.uk (Please note that in order to ensure that your complaint is flagged and given the required attention, Interactive Brokers kindly asks you to state "COMPLAINT" in the subject header field of the email).

28. Are Corporate Actions allowed under my child’s IBUK Junior Stocks and Shares ISA?

Allowed to participate but cannot exceed the annual Junior ISA subscription limit. If it were to exceed the subscription limit, the shares should be transferred to a non-ISA account (see above sections 18 ‘What should I do if I exceed my child’s Junior ISA allowance?’ and 16 ‘Does Interactive Brokers have any mechanisms in place to ensure customers do not exceed the Junior ISA allowance for the relevant tax year?’.

29. FX Handling and the IBUK Junior Stocks and Shares ISA

The below example illustrates the cost in GBP of a $1,000 USD Trade

Example GBP/USD Spot Rate: 1.3432/1.3433

Order Type	FX Conversion Rate inc 0.03% fee	Cost of $1000 USD Trade
Buy	1.3430	£744.61
Sell	1.3435	£744.31

30. What if I have additional questions?

Our customer services team are on hand to help via phone or email. If you have any questions about your IBUK Stocks and Shares ISA, please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays.

Account Structures

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

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.

Account Structures

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 5^th 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?

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.

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.

Account Structures

Information Regarding IBUK ISA (Individual Savings Account)

1. What is an ISA and what benefits does it offer me?

An ISA (Individual Savings Account) is a tax-free savings or investment account that gives you the opportunity to save or invest a certain amount of money every year, without having to pay tax on any growth in your investments or savings. There are 4 types of adult ISA available (stocks & shares ISA, cash ISA, innovative finance ISA , and lifetime ISA). The interest on cash accumulates on a tax-free basis, as does income and capital gains made on investments.

A stocks and shares ISA lets you invest in “qualifying instruments” such as stocks and shares, funds, etc. A stocks and shares ISA is not an investment in its own right. The best way to think of a stocks and shares ISA is as a ‘wrapper’ with which you can shelter your savings and investments from both Income Tax and Capital Gains Tax. The IBUK Stocks and Shares ISA lets you choose from a range of investments to invest in (see below section 10 ‘What can I invest in?’). You can select and manage your IBUK Stocks and Shares ISA yourself or arrange for your financial advisor to do so on your behalf (see below section 8 ‘Can I appoint a financial advisor to manage, on a discretionary basis, my IBUK Stocks and Shares ISA?’).

When deciding which type of ISA to open, you should consider the pros and cons of each so that you can choose the type that best fits with your personal needs, circumstances and financial goals. We offer stocks and shares ISAs only.

Tax treatments depend on your individual circumstances and may change in the future.

2. What ISA types are offered at IBUK?

Interactive Brokers (U.K.) Limited (IBUK) only offers stocks and shares ISAs (including, Junior Stocks and Shares ISA). IBUK does not offer cash ISAs (including, Junior cash ISA).

3. Who is eligible for an IBUK Stocks and Share ISA?

In accordance with HMRC rules, any individual who is a resident for tax purposes in the UK and over the age of 18 is eligible to open a stocks and share ISA.

Click on the link for additional details:

https://www.gov.uk/tax-foreign-income/residence

4. How many ISAs can I have?

You can only open one of each ISA type in the same tax year. For example, you can't open two stocks and shares ISAs in a tax year, but you could open one stocks and shares ISA and one cash ISA.

5. What is a flexible Stocks and Shares ISA?

ISA flexibility refers to whether you’re able to withdraw from your ISA without affecting your annual allowance. A flexible stocks and shares ISA allows the individual to withdraw funds from their stocks and shares ISA and put them back into it, within the same tax year, without affecting their annual ISA allowance.

6. Does IBUK offer a flexible Stocks and Shares ISA?

No, an IBUK Stocks and Shares ISA isn't flexible. That means you can take money out, but it'll count towards your annual ISA allowance if you pay it back in the same tax year.

https://www.gov.uk/tax-foreign-income/residence

7. Can you lose your money paid into a Stocks and Shares ISA?

The value of investments you hold in your IBUK Stocks and Shares ISA and the income received from them can fall as well as rise. As a result, you may get back less than you invested. Past performance is not an indication of future performance, and some investments need to be held for the long term to achieve a return. The IBUK Stocks and Shares ISA is an execution only service, Interactive Brokers does not provide investment advice. If you need advice about whether an investment is suitable, you need to consult a suitably qualified financial advisor.

8. Can I appoint a financial advisor to manage, on a discretionary basis, my IBUK Stocks and Shares ISA?

Yes, you can appoint a financial advisor to manage your IBUK Stocks and Shares ISA on your behalf. Click on the link for additional details:

https://ibkr.info/node/134

9. Can I trade on margin under the IBUK Stocks and Shares ISA?

No. You can only open an IBUK Stocks and Shares ISA under a GBP cash account type. A cash account requires that all transactions are made with available cash or long positions.

10. What can I invest in?

Under a stocks and shares ISA you can invest in any of the following investments (also known as 'qualifying investments'):

Shares;
Securities issued by Companies;
Recognised UCITS;
Depository Receipts, American Depository Receipts and American Depository Shares.

11. What exchanges does IBUK support?

HMRC recognised exchanges supported by IBUK:

Country	Exchange
Australia	The Australian Stock Exchange (and any of its stock exchange subsidiaries)
Austria	Vienna Stock Exchange
Belgium	NYSE Euronext Brussels
Canada	NYSE Euronext Brussels Montreal Stock Exchange Toronto Venture Exchange (TSX Venture Exchange)
France	MATIF MONEP
Germany	Frankfurt Stock Exchange Stuttgart Stock Exchange
Hong Kong	Hong Kong Stock Exchange
Italy	Italian Stock Exchange (Borsa Italia)
Japan	Tokyo Stock Exchange Osaka Stock Exchange
Lithuania	NASDAQ OMX Vilnius
Mexico	Mexico Stock Exchange
Poland	Warsaw Stock Exchange
Singapore	Singapore Exchange Limited
South Korea	Korea Exchange
Spain	Spanish Stock Exchange (Bolsa de Valores in Madrid)
Switzerland	Swiss Stock Exchange (SIX Swiss Exchange)
United Kingdom	London Stock Exchange
United States of America	BATs Exchange Inc Chicago Board Options Exchange Chicago Stock Exchange International Securities Exchange National Stock Exchange New York Stock Exchange NYSE ARCA NASDAQ OMX PHLX NASDAQ

12. What is the ISA Allowance for 2022/2023 tax year?

Tax year runs from 6 April to the following 5 April. Each tax year’s ISA subscription limit is specific to that year and can be checked on the HMRC website.

For the 2022/23 tax year the annual ISA allowance is £20,000 per person. Any of the ISA allowance that goes unused in the current tax year cannot be rolled over to the subsequent tax year. You can divide this cash allowance across multiple ISAs, provided that not more than 1 of each type of ISA is subscribed to in any given tax year. NB. If you are already subscribed to another stocks and shares ISA in the current tax year, you are not permitted to subscribe to our stocks and shares ISA for the remainder of the tax year.

NB. For each tax year, you can check (via the funding page in Client Portal) how much you have subscribed to your IBUK Stocks and Shares ISA and the maximum amount that you can contribute to your IBUK stocks and shares ISA in that tax year, assuming you have not contributed to another ISA away from Interactive Brokers.

13. How do I make subscriptions to my IBUK Stocks and Shares ISA?

You can make one-off payments (wire transfers deposits) as and when you choose, but the combined total of all payments (or subscriptions) must not exceed any given annual tax year allowance (see section 12. What is the ISA Allowance for 2022/2023 tax year?).

Interactive Brokers accepts wire transfers only, and there is a minimum subscription amount of £1. Your IBUK Stocks and Shares ISA can only have GBP cash.

14. Does Interactive Brokers have any mechanisms in place to ensure customers do not exceed the ISA allowance for the relevant tax year?

Yes. Interactive Brokers has in place internal controls to prevent customers from exceeding the ISA allowance by splitting the customers’ payments (once received by Interactive Brokers) as follows:

crediting the allowable subscription to the customer’s IBUK Stocks and Shares ISA; and
crediting the potential over-contribution amount as follows:

o if you already have other account(s) with IBUK, Interactive Brokers will credit the potential over-contribution amount to such account(s);

o if you don’t have other account(s) with IBUK, Interactive Brokers will open a new non-ISA cash only (GBP) account on your behalf and credit the potential over-contribution amount to this new and additional account.

Worked example:

Assuming you only have one type of ISA which is an IBUK Stocks and Shares ISA. The annual ISA allowance for 2022/2023 tax year is GBP 20,000. You initially contribute GBP 19,000.

For the same tax year (2022/2023) you then send GBP 2,000 to Interactive Brokers and request such funds to be credited to your IBUK Stocks and Shares ISA.

If Interactive Brokers actioned your request and credited the full amount (GBP 2,000) to your IBUK Stocks and Shares ISA, you would have exceeded your ISA allowance for the tax year 2022/2023 by GBP 1,000 (as the maximum you can contribute for the tax year 2022/2023 is GBP 20,000).

Instead, to prevent over-contribution, upon receipt of your funds Interactive Brokers will carry out the following actions:

(1) credit your funds (GBP 2,000) to your existing other non-ISA account(s) with IBUK (if you already have one or more accounts).

(3) Interactive Brokers will then automatically transfer GBP 1,000 from your other non-ISA account with IBUK to your IBUK Stocks and Shares ISA.

15. What happens if I exceed my ISA allowance?

If you have accidentally paid too much into your ISAs you won’t get any tax relief on the excess payments you’ve made. The ISA allowance is a combined annual limit across all adult ISA types (e.g. stock & shares ISA, cash ISA, innovative Finance ISA , and lifetime ISAs).

16. What should I do if I exceed my ISA allowance?

In the event you oversubscribe to your ISA (in other words your ISA annual allowance was exceeded), you should not attempt to correct the mistake by withdrawing the excess funds from an ISA (including, but not limited to, your IBUK Stocks and Shares ISA). Instead, you should call HMRC’s ISA helpline to explain the situation and inform them about the oversubscription. HMRC will advise you on the next steps. NB. The ISA allowance for the tax year 2022/2023 is GBP 20,000 (this is a combined limit across all 4 types of ISA (stock & shares ISA, cash ISA, innovative finance ISA , and lifetime ISAs).

17. What is the annual fee for the IBUK Stocks and Shares ISA?

There is no annual ISA fee at IBUK. Other costs and charges apply, see below section 18 for more information.

18. What are the charges for the IBUK Stocks and Shares ISA?

£3 per month minimum activity fee.

One free withdrawal per month. Thereafter, £7 withdrawal fee is applicable.

Click on the link for an overview of our commissions:

https://www.interactivebrokers.co.uk/en/index.php?f=39753&p=stocks

19. What transactions are allowed and what transactions are not allowed in an ISA?

a) Example of allowed transactions

An individual subscribes £15,000 into a stocks and shares ISA, £3,000 into a cash ISA and £2,000 into a lifetime ISA. No more than 1 of each type of ISA was subscribed to in the tax year, and the annual ISA allowance of £20,000 was not exceeded.

b) Example of disallowed transactions

An individual subscribes £10,000 into one stocks and shares ISA, £2,000 into another stocks and shares ISA, and the remaining £8,000 into a cash ISA. While the individual did not exceed the annual ISA allowance of £20,000, they subscribed funds into more than 1 stocks and shares ISA.

20. How do I transfer my stocks and shares ISA from my current ISA manager to IBUK?

NB. Currently only transfers in of cash from existing ISAs are supported. Transferring of open positions (in-specie transfers) will be available later in Q4 2022.

You will need to submit a transfer instruction to Interactive Brokers (via the transfer & pay funding page in Client Portal), and if, in IBUK’s discretion IBUK decides to accept the transfer, IBUK will instruct your existing ISA manager to transfer your investments (where IBUK supports such investments) and/or cash into your IBUK Stocks and Shares ISA. Where IBUK does not support all your investments held at your existing ISA Manager, you can either liquidate these investments yourself prior to submitting your transfer instruction to IBUK via Client Portal (any cash proceeds of such liquidation will be transferred into your IBUK Stocks and Shares ISA) or you can instruct IBUK (as part of your transfer instruction via Client Portal) to do so on your behalf.

21. How do I transfer an ISA out of IBUK to another provider?

Any transfer out request from IBUK must be requested via the receiving ISA provider. The requesting broker can email a client-signed transfer form to isa-transfer@interactivebrokers.com or the client may attach a completed form to a web ticket.

22. What are the Transfer Charges?

Interactive Brokers does not charge for transfers (the transferring ISA manager may charge you for transferring investments or cash proceeds to us).

23. Can I cancel my IBUK Stocks and Shares ISA?

You have a legal right to cancel your IBUK Stocks and Shares ISA if you change your mind but there are timelimits on doing so, see below section 24 for more information.

24. How can I cancel my IBUK Stocks and Shares ISA?

If you want to cancel your IBUK Stocks and Shares ISA, you must do so within 14 days from the date you receive our email confirming the establishment of your IBUK Stocks and Shares ISA (a cancellation must be requested from the Client Portal).

Cancellation rights will also apply to the receipt of transfer payments. You have 14 days from the date you receive our email acknowledging the transfer to exercise your right to cancel (a cancellation must be requested from the Client Portal). NB. If you cancel the transfer of your stocks and shares ISA from another ISA manager to IBUK, that ISA manager may not agree to accept the stocks and shares ISA back. This may result in that stocks and shares ISA being closed, and the tax benefits being lost.

25. How safe is your IBUK Stocks and Shares ISA?

IBUK is authorised and regulated by the Financial Conduct Authority, and is approved by HMRC to act as an ISA manager (including in respect of stocks and shares ISAs). Your account is held with IBUK’s US affiliate, Interactive Brokers LLC, regulated by the US SEC and CFTC and member of the SIPC (www.sipc.org) compensation scheme.

Your IBUK Stocks and Shares ISA will not be covered by the Financial Services Compensation Scheme (FSCS) in the UK. Instead, your eligible assets are protected from loss under the US SIPC at an amount of up to USD 500,000 (subject to a cash sublimit of USD 250,000). As with all securities firms, this coverage protects against the failure of a broker-dealer, not against the loss of market value of securities. You will not get any compensation only because the value of your investments falls.

26. How can I file a complaint with IBUK?

Customers are actively encouraged to use the WebTicket system for prompt attention.

A copy of our Complaints Procedure is available here https://www.interactivebrokers.com/en/index.php?f=292 You can also direct your ISA specific complaints via email to isa@interactivebrokers.co.uk (Please note that in order to ensure that your complaint is flagged and given the required attention, Interactive Brokers kindly asks you to state "COMPLAINT" in the subject header field of the email).

27. Are Corporate Actions allowed under my IBUK Stocks and Shares ISA?

Allowed to participate but cannot exceed the annual ISA subscription limit. If it were to exceed the subscription limit, the shares should be transferred to a non-ISA account (see above sections 16 ‘What should I do if I exceed my ISA allowance?’ and 14 ‘Does Interactive Brokers have any mechanisms in place to ensure customers do not exceed the ISA allowance for the relevant tax year?’.

28. FX Handling and your IBUK Stocks and Shares ISA

Interactive Brokers will automatically convert currencies when trading non-GBP denominated securities. To do this, Interactive Brokers will engage in “spot” currency transactions on your behalf in order to settle your buy orders or convert the proceeds of a sell order. For opening orders Interactive Brokers will base the exchange rate off the spot exchange rate at the time of trade plus our 0.03% fee. For closing orders any non GBP balances will be closed at the end of the trading day at the closing exchange rate of the day plus our 0.03% fee.

The below example illustrates the cost in GBP of a $1,000 USD Trade

Example GBP/USD Spot Rate: 1.3432/1.3433

Order Type	FX Conversion Rate inc 0.03% fee	Cost of $1000 USD Trade
Buy	1.3430	£744.61
Sell	1.3435	£744.31

29. What if I have additional questions?

Our customer services team are on hand to help via phone or email. If you have any questions about your IBUK Stocks and Shares ISA, please contact our dedicated ISA Support team who are available 8am to 6pm GMT Monday to Friday, excluding public holidays.

Account Structures

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:

Log in to Client Portal.
Click the Notifications (bell) icon in the top right corner. The number on the icon shows you how many total unread notifications you have.
A drop-down menu will open showing your Pending Items, Corporate Actions and Messages.
Click Pending Items.
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.

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.

Account Structures

FAQs: IBIE Pre-Migration Action item Guide

Overview:

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:

Log in to Client Portal.
Click the Notifications (bell) icon in the top right corner. The number on the icon shows you how many total unread notifications you have.
A drop-down menu will open showing your Pending Items, Corporate Actions and Messages.
Click Pending Items.
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

• 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)

• 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.

Account Structures

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.

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?

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/).

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 12^th 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

ugyfelszolgalat@mnb.hu

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

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

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.

Account Structures

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:

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?

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?

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.

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?

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

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

Info@fspo.ie

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?

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?

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?

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?

14. Will my login credentials change?

Account Structures

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