Interim delays in wired funds between brokers

Discussion in 'Retail Brokers' started by Option Trader, Mar 31, 2009.

  1. When wiring funds from one broker to another, and the funds are already deducted from the first broker, but they don't yet show up by the next broker till the next day, and/or till you provide them the federal reference number, is that usually b/c of delays on the side of the sending or of the receiving broker? Is that because they like to use your money in the interm?
  2. nassau


    when you wire funds from your existing broker their protocol may give them like IB 6hrs to 4 days. However once the funds leave your account and you verify the time left via your account management pg the funds then enter the federal system and by law have to be off their books within 24 hrs or they are in breach of compliance.

    So if you instructed funds to be wired today and they left, the receiving broker will have your funds within hours, especially if funds were wired in the morning. The receiving broker has a few tricks they can use to use your money for a day at best without having to credit your account.

    They may tell you the funds received were not exactly as advised as one of the intermediary banks charge a few dollars to handle and we are having to manually credit your account.

    Total bs as if you provide them with an IMAD number that you can get from your sending broker they will have no excuse.

    Happens all the time and yes banks do this all the time and float the funds in the over night money market for a few extra dollars.
    If they want they can hold the funds until end of day and credit next day given them technically 2 nights. Outside they are out of compliance.

  3. gkishot


    Are they in compliance to keep the investors money for 2 days and earn on interest for themselves? Is that what it is?
  4. nassau


    yes there are and that is how financial system is suppose to work.
    Banks and Brokers are legalized theives ask anyone in the business.
    Banks especially have wkly settlement and need funds and so do brokers and will do a little now you see me now you don't to balance their books and or portfolio.

    Also by crediting you the next day you usually do not have access to the funds as you may have noticed. If you held positions and then place in funds even after you exit you do not have full access to your own funds the Banks and Brokers will update the following day the account.
    There are many ways within their charter that allow them grace and a way to generate funds.
    similiar to McDonalds and their pricing. Customers walk away from the pennies and those pennies are worth millions yearly.

  5. Once you give the federal registration number to the receiving broker, how long do they have?

    Does giving the receiving broker the federal registration # really make it easier for them? Or that's part of their game?
  6. nassau


    You can only receive an imad no. once your funds are in the system. If you give that no. to you receiving broker they can see that no. almost immediately and at best can advise you they see it, it will be processed later today they would have trouble explaining why it was not done by days end. Some brokers will hold the credit to your account until after market close so the funds are in your account, you do not have access to them other than a cushion re margin until the following day.

    Similiar to how you make a profitable trade but are on a T-3 settlement but lose and the funds are gone.

    Traders who open accounts with a bank or broker are assets of that bank who end of day calculate debits and credits and place funds into the money market, receive short term CD's for wkly settlement etc. hundreds of ways to use your/ our money while charging us to play.

    wkly settlement in a sense is legalized kitting always borrowing Peter to pay Paul.

  7. Thank you much for your input. Assuming you are right, IMO, that is immoral & disgusting behavior on the part of banks & brokers.
  8. What do you have to say about ACH transers? Just had a situation that a Penson broker deducted the ACH transferred funds immediately, and they say it will arrive in about 3 business days to the receiving broker! Well that's much more than the time you mention?
  9. Every broker I've used except for E*Trade sent the ACH funds same day (i.e. the money was credited to my bank account the morning of the business day after it was deducted from my brokerage account). E*Trade always holds onto the money for one extra business day before sending it to the other party, but they do tell you that this is their policy.
  10. Do they tell you it takes up to 3 days then they take 1?
    #10     Jul 12, 2009