Beware Options Express

Discussion in 'Retail Brokers' started by LondonUSTrader, Apr 6, 2012.

  1. Sometimes I move to different countries.

    Normally this is not a problem. Most brokers simply accept your change of address notification without giving you further hassles.
    However, I have now discovered that optionsXpress behave in an outrageous fashion if you move to Australia/New Zealand.

    As optionsXpress have different regional offices if you change country they forcibly remove your account from one jurisdiction to another. When this first happened to me with my account removed from optionsXpress, America to optionsXpress, Europe this was not a problem. I was required to do nothing the account just came under a different to jurisdiction.

    Yet, now I have moved to Australia/New Zealand they have imposed ridiculous new conditions on my account as if I never had any dealings with them in the past.

    Despite having an account with options express for years suddenly I'm required to provide the following information:
    “As you are now moving under the Australian office, we will require you to re-sign the application to complete the movement of your account.

    Please print the attached application (please note you will need to enter your place of birth to access the file) and post back to our offices with a copy of your New Zealand Passport or Drivers License (if your passport is issued by another country, we will need to see evidence of your permanent residency or visa for New Zealand) we also ask that this is certified (i have attached a list of persons who are able to certify your document).

    Finally, we ask that you provide a utility bill showing your new address.

    Please post the signed application, certified ID and a copy of a utility bill to the address below. Once received your account will be fully updated.”

    I should add this transfer between their offices was not at my request and no other broker or bank I deal with have required such information simply because I have moved.

    Shame on options express for dealing with long-standing clients in such a fashion. Shame on Nicola Quinn, Team Leader Accounts Administration, Australia who wrote such a shameful email.

    Beware optionsXpress unless you never move countries. This has certainly led me to reconsider whether I will continue to deal with options express in the future. Before this happened I used to think they were a good broker, lesson learned!
     
  2. It is likely a requirement of Australia / New Zealand law that you sign an application which contains their own risk disclosure requirements and other details.

    Options Express has an office there, so they are subject to those regulatory requirements for anyone who lives there.

    So I think your complaint is unjustified.

    If other brokers with offices in Australia / NZ fail to make the appropriate disclosures and obtain account details required by the local securities regulator, they are sloppy and are the ones to avoid.



    .
     
  3. I take your point.

    However, my response would be as follows.

    (1) I never requested my account to be moved to their office in Australia, this was done forcibly without my consent.

    (2) The securities regulations in Australasia are not different from Europe in this respect. The regulators require ID and proof of address for money laundering purposes. However, my argument is that this is unreasonable if you have been a client of a firm for several years. They have already verified my identity through these methods previously and to do this again serves no purpose because you happened to have moved countries.
     
  4. Virtually all brokers assign your account involuntarily to a local branch if they have one in any country you move to.

    Suppose an Australian had an account with Options Express Australia. Then he moves to the U.S. The account will have to be assigned to Options Express USA and probably re-documented there. Otherwise Options Express would be serving a (now) U.S. resident without having following the mandatory disclosure and regulatory procedures imposed by the S.E.C.. FINRA, etc. with respect to U.S. residents. For example, the pattern day trader rules now apply whereas they did not in Australia, so the agreement and procedures agreed to in Australia are not adequate and need to be done over. Also proof of identity requirements vary from country to country and in some cases need to be verified with national databases.

    The same applies in reverse.

    All of that said, there is no excuse of course for a failure on their part to explain very politely why new documentation was required, if it really was, and to help you with it personally and proactively.
     
  5. rmorse

    rmorse ET Sponsor

    Every US broker has Written Supervisory Procedures (WSP) to meet the requirements that FINRA places on them. What's likely is during an exam they discussed international accounts and this was a remedy they had to write into their WSP for FINRA. Or, OX is now owned by Charles Schwab. This could be something CS compliance wanted in place, that was not necessary with your last move because OX was on their own.

    NO broker is trying to give you paperwork to annoy you. It is required by either a regulator or compliance person.

    Bob
     

  6. Stop whining. If you don't like the regulations of a given country, don't move there.