Assuming that one opens a universal account with them, are the funds used to trade FX with Ideal Pro protected as well as equity trades? Their security FAQ at the following URL simply states that one should take in to accout that FX is OTC and unregulated. However, nothing specific is mentioned with regard to fx fund's safety. " Likewise, IB allows you to trade foreign currencies. This market is by its very nature lightly regulated or unregulated and not subject to a central counterparty clearinghouse. You should take this into account in trading forex products." http://individuals.interactivebrokers.com/en/general/education/faqs/safetyFAQ.php?ib_entity=llc Thank you.
I seem to remember somewhere on the SiPC website that (trading) foreign currency was excluded or something along those lines. I also seem to remember IB having a facility to sweep excess funds from FX accounts overnight and put them in some other account which was protected. Sorry to be so vague but it was a while back, maybe phone IB and ask (if you can get any sense out of their helpdesk that is!) Alternatively have a UK account, protected up to GBP35k (soon to be 50k) if you set it up right when you first open the account. Not sure if it applies to non-UK residents but worth looking into.
SIPC coverage is for equity and cash balances only. OTC, futures, derivative products do not fall under this umbrella of protection. The IB Universal account automatically sweeps unused cash balances from this trading into the area that is covered by SIPC. In other words, if you have open positions and the firm goes belly up, only those equity transactions (and cash) are covered by SIPC, not fx or futures trades. This is what makes IB unique compared to their competitors. http://individuals.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc
If you're with the Canadian arm of IB, you'll be covered by CIPF because Canadian regulators deem spot forex to be a security. http://www.cipf.ca/c_explore_coverage.htm