IB UK accounts operate under a clearing agreement with IB LLC (the U.S. broker dealer and FCM) whereby all securities and exchange listed futures activities are cleared and carried on the books of IB LLC. The IB UK clients, therefore, are subject to the same customer protection and hypothecation requirements as the IB LLC clients
Beginning last week IB is keeping approx 3600$ in my commocities acct. i traded 1 YM contract a couple of days before that. Nothing else since then. No other activity of any kind. Lev = 0. In the past IB zeros out the commdities at the next cycle. whats going on? Anyone else see this in their acct. ? Mabe i missed some notice from IB re this ?
It should be pointed out here that in a Portfolio Margin account, all long options positions, even if fully paid for, appear to be automatically pledged to the OCC and/or the broker-dealer. The broker-dealer also appears to have an automatic lien on long securities even if they are paid for within a Portfolio Margin account. If this does not apply under IB's rules for Portfolio Margin accounts, please let me know. This is according to #9 in Special Rules for Portfolio Margin accounts: http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3051&print=1 "When a broker-dealer carries a standard cash account or margin account for a customer, the broker-dealer is limited by rules of the SEC and of the Options Clearing Corporation ("OCC") to the extent to which the broker-dealer may permit the OCC to have a lien against long option positions in those accounts. In contrast, the OCC will have a lien against all long option positions that are carried by a broker-dealer in a portfolio margin account, and this could, under certain circumstances, result in greater losses to a customer having long option positions in such an account in the event of the insolvency of the customer's broker. Furthermore, the carrying broker-dealer has a lien on all long positions in a portfolio margin account, including margin equity securities, even if fully paid. Accordingly, to the extent that a customer does not borrow against long options and margin equity positions in a portfolio margin account or have margin requirements in the account against which the long options or margin equity securities can be credited, there is no advantage to carrying the long options and margin equity securities in a portfolio margin account and the customer should consider carrying them in an account other than a portfolio margin account."
I think this explanation refers to the reason why OCC keeps a lien on long option positions held in a portfolio margin account. But beyond options, is it also true in that in each Portfolio Margin account "the carrying broker-dealer has a lien on all long positions in a portfolio margin account, including margin equity securities, even if fully paid"? Thanks in advance.
IB-AN, Has IB published any info on whether futures contracts held within a PM account are now SIPC covered? It appears that this coverage was suggested by Dodd-Frank but it is unclear if the rule applies yet. See this article from 2008: http://www.allbusiness.com/legal/administrative-law-regulatory-compliance/12018149-1.html
Futures are not securities. SIPC only covers securities and cash in securities accounts. All broker dealers pay a yearly fee to cover SIPC protection. Because SIPC is rarely required, the current dues are very low. You can't just add futures accounts, because futures brokers don't pay into the fund. If protection is added in the futures, it might be a new fund.
No. You seem to be implying this in various threads and it's incorrect. The discussion above relates solely to OCC. A broker isn't afforded any greater rights or lien simply because positions are maintained in a portfolio margin account. The determination of any lien is based upon 140% of a cash debit balance just as it is for a Reg T account, examples for which have been well documented in this and other threads. In fact, reread your own posting on this subject where you referenced the FINRA website (bold emphasis added): "When a broker-dealer carries a standard cash account or margin account for a customer, the broker-dealer is limited by rules of the SEC and of the Options Clearing Corporation ("OCC") to the extent to which the broker-dealer may permit the OCC to have a lien against long option positions in those accounts. In contrast, the OCC will have a lienâ¦â
The section that I am asking about from the FINRA link starts above with "Furthermore..." This seems to suggest a lien at the broker level.