Logging in on account management today I was asked to transfer my account from IB llc to the newly HK registered IB branch. Anyone facing the same issue ? Any comment ? Thanks luis
The short of it is that there are regulatory differences between the US and HK - particularly in the treatment of client money. US treasuries are not a good location for client money under HK rules. However, in the US, we must place funds into treasuries. The SFC gave us no action during previous audits but I assume given the growth of IB and concerns related to the fallout of Lehman and MF, we were informed that the no action would not continue and hence need to go local. Note - IBHK is not a new entity. IBHK under its former name has been operating in HK since 1995. We are well established in HK and were actually the first firm to offer electronic trading on the HKFE in 1999. If you want to remain a client of iB and are a resident of HK, you will have no choice but to move to IBHK. Functionally, you should see little difference.
I migrated several weeks ago under the same directive. The only difference I observed is positive: more efficient margining and eliminating Reg T.
So HK clients' US stocks used to be protected by SIPC, but with IB HK then all HK clients' US stocks would be protected by nothing?
IMHO Sounds like IB may be ring fencing its risk & getting ready for a possible meltdown. Shifting risk away from account protection & dumping it on clients & the incompetence of the hk authorities - who ALWAYS side with big business interests anyway. -) ( I may be wrong - come on IB come up with a suitable account protection plan that is at least a few million USD guaranteed & we may be persuaded otherwise!) As there is no way to make a living trading HK$150k ....... I can see a mass exodus of clients - unless they truly are blind to the risk being imposed. again just my perspective & opinion....
This is one of the more ridiculous comments I've read. To be clear - we have ZERO choice on this decision. The insurance you are talking about is government insurance. If you have a beef with that, contact your legislator. I understand many are concerned about what would happen in the case of a default but all HK residents are in the same boat as long as you deal with a firm licensed or promoting their services in Hong Kong. The move of HK clients to a HK company does not take away from the fact that the IB has a long track record of profits which are released quarterly, the group is extremely strong with over $5 Billion USD in equity capital, management and staff have massive skin in the game as we own ~85% of the company. I would believe our financial strength and strict adherence to client money rules along with our real time margining system should offer great comfort. You will rarely see me banging the drum of a regulator but calling the HK regulators incompetent is ludicrous. They run a very tight ship. Sure, I wish they offered more flexibility and would work with legco to update the SFO to incorporate US treasuries as allowable assets but financially, they are very conservative and I can make a strong case on why many of the requirements in Hong Kong are extremely conservative (I would start with 3 clearing houses that do not allow cross margining to position limits that are very low to the capital requirements needed to maintain such positions). You say they [big gov] "ALWAYS side with big business interests" - I guess you weren't around for the Lehman mini bond saga and saw that the holders were made whole. (I also believe all obligations to MF clients were also met in Hong Kong) Frankly, if you're afraid to put more than $20K (150K HKD) into a broker due to a fear the broker may go bust, you probably should not be trading with that firm and move somewhere too big to fail. Most of our clients understand we are financially strong and run a tight ship. There has not been a mass exodus. Most clients - including the largest of accounts - have agreed to move. If you want to kick the tires, feel free to make an appointment and visit our office - to us it's business as usual.
IB has been in HK for many years, why force all HK clients to move to only 150k hk$ protect for hk financial stuff only? Lehman Brothers was way bigger than IB right? HK clients move to IB HK has zero benefit but give up all serious protection for non Hong Kong investment.
What part of "we have no choice" wasn't clear in the comments and messages we have sent to clients? Unlike Lehman, IB doesn't hold off balance sheet surprises. https://www.interactivebrokers.com.hk/en/index.php?f=ibgStrength&p=fin&ns=T
Actually the victims of both MFG & Lehmans had their lives severely disrupted & only after many years of stress did some of them get even a partial repayment of their own money it is unlikely that any will ever be made whole let alone compensated. Apparently ( according to IB staff ) there are similar moves to localse the clients residing in various countries - uk & canada were mentioned specifically, there may be more - presumably those actions were not at the prompting of the HK regulators? HK regulators do have a point that the us treasuries may not be as safe as they once were & certainly are not `risk free' as some academics may dream & teach To date this is the only communication from IB on the subject, it mentions neither the regulators, treasury bonds , alternate measures for safekeeping, account segregation, changes to account protection or anything else - just an order to comply or else (typical IB) be restricted & that the banking will be affected & a `less restricted product set' ( what was restricted?) ( thats a laugh as sfc mostly only allows unhedged loss making funds!) , & simpler account design - was it complex?) Where does it say that IB had no choice or even explain the motives & changes to account protection?? It is the clients that are presented with a gun to the head ultimatum to agree to something far from being in their interests. ================ Transfer of Accounts to Interactive Brokers Hong Kong Ltd. Interactive Brokers is pleased to announce the establishment of Interactive Brokers Hong Kong Limited, which is headquartered and regulated in Hong Kong and which will provide all IB services to our Hong Kong clients. Interactive Brokers will be offering its services to Hong Kong clients through Interactive Brokers Hong Kong Ltd ("IB HK" or "Interactive Brokers Hong Kong", SFC CE. No. ADI249), using the same IB platform and software you currently use, with the same low commissions and financing rates. You will still be able to trade all the products you can currently trade through the IB platform with your existing log-in details (username, password and security device). We think you will find the new account design at IB-HK simpler to understand, and it will provide greater flexibility in capital use, as well as a less restricted product set. The only difference is that your business relationship will be with Interactive Brokers Hong Kong in place of Interactive Brokers LLC (our USA brokerage affiliate). PLEASE NOTE THAT STARTING IN AUGUST 2015, Interactive Brokers WILL TRANSFER ALL FUNCTIONS RELATING TO HONG KONG RESIDENT ACCOUNTS TO THIS NEW IB HONG KONG AFFILIATE, AND WILL CEASE PROVIDING SERVICES FROM OUR US OR UK BROKER AFFIIATES, IB-LLC / IB-UK. AFTER THE TRANSFER, HK RESIDENTS' ACCOUNTS AT IB-LLC OR IB-UK WILL BE CLOSED. WE STRONGLY ENCOURAGE HK CLIENTS TO AUTHORIZE THE TRANSFER OF THEIR ACCOUNTS TO IB-HK AS SOON AS POSSIBLE TO AVOID ANY INTERRUPTION OF TRADING ACCESS. For a limited time, we are providing a simple migration solution to create your new IB-HK account automatically based on information already in use on your existing IB-LLC account(s). Simply log into Account Management and authorize the account transfer on the form you will be provided. We will take care of the rest. Once this transfer has taken place, you will no longer be able to deposit funds using the routing information associated with your current account. To ensure that future transfers are credited to the new account in a timely manner, we ask that you then submit a notification through Account Management, at which point the routing details associated with your IB HK account will be provided. Interactive Brokers Client Services =======================================
NO one except insiders would know Lehman would be down before it happens, same for possible outcome for IB. Do HK clients even have a choice not to move to HK IB? You mean IB clearly wrote HK clients have no choices and just must take all 100% risk no protection at all once not invest in HK stocks, futures or options? No matter what you try to present, IB is nothing close to too big to fall or financially strong comparing to Lehman before it failed down. It is simple that IB has chance to be done, and HK client will lose all non HK investment with their IB HK account. IB offers nothing, zero protection for HK client investment outside of HK, even in HK is just protection from HK government not from IB. So it is simple, once move to IB HK, HK clients take all the risk, IB takes no risk.