If true why the lack of notification and why are they implementing it haphazardly (some IRAs currently have the restriction, and some don't). This whole thing is very strange. Say it ain't so IB....why would you push all those accounts to other brokers?
I think the era of trading futures in a retirement account has come to an end. Either IB realized they couldn't collect after the CHF issue or, more likely some regulator came face to face with the fact that futures use leverage and, in a sense, borrowed money and shouldn't be allowed. I'll be pretty surprised if a year from now any of the brokers will allow futures in a retirement account. I doubt they generate anywhere enear nough revenue for any broker to fight to keep them.
Not sure I buy that -- IB's "margin IRA" allows you to use unsettled funds for trading, I'd say that's closer to a loan than trading a futures contract. And why are options allowed -- they have leverage similar (though usually not as large) as futures. From another direction -- if I buy one e-mini S&P 500 contract in an account with $100K I am not using leverage at all, so at that point why would it be disallowed? I'm guessing your first thought about CHF may be the reason.
This is from a rep with Ninja Trader Brokerage "Let me know when you’re ready to open your IRA, and I will put you in in touch with our preferred custodian, Midland IRA."
Thanks johnjax. Hopefully then the custodial "self-directed" IRA route will continue to be available to us in various brokerages. http://en.wikipedia.org/wiki/Self-directed_IRA
The custodial "self-directed" IRA route is widely accepted because the FCM or Prime Broker does not have to do any of the IRA compliance.
Yes there are many brokers that offer IRA trading via that model. You have to pay the trust holder a fee but that's not the end of the world. I don't see anything to indicate there have been any legislative changes. I think if there were some sort of ruling or proposed law change there would be more chatter. I think this is an IB thing.
I'm going to open an account though uDirect IRA Services next week. Not because of the change at IB, but because I want to move my futures business to FC Stone, where most of my customer's futures accounts are. They can't take Roth IRAs directly.
NinjaTrader Brokerage does support IRA accounts through multiple custodians, like Midland IRA and Millennium Trust. We typically recommend using Midland because of the positive customer feedback. Please inquire with our brokerage support team if you have additional questions: brokeragesupport@ninjatrader.com.
If there is a compliance issue at IB that would be solved using a 3rd-party IRA custodian, then it's a good bet that IB is scrambling right now to contact custodians to arrange a fast-path transition process for their IRA customers who wish to trade futures and remain at IB. This solution would be part of their formal announcement, whenever they make it. Just speculation on my part.