New IB policy for pro accts...

Discussion in 'Retail Brokers' started by ktm, Apr 3, 2002.

  1. H2O

    H2O

    Hi,

    I have a question that is related to this subject.

    I'm a Dutch trader and at this time I have an acct with IB (non Pro) I'm going to leave IB and switch to EchoTrade. I'm now required to get my Series 7 and will become Pro.

    Suggest things at Echo don't work out and I want to get back to IB, do I have to pay pro fees for the rest of my life ?:confused:
     
    #21     Apr 6, 2002
  2. mjt

    mjt

    If you don't use your license, ie trade with a pro firm in your case, it will expire over time. I believe it is 3 years. During that time, I believe you will still be considered a pro trader and have to pay pro fees.
     
    #22     Apr 6, 2002
  3. Babak

    Babak

    ktm, thanks for taking this seriously. If there is a rule, then I for one would appreciate knowing what agency if any wrote it and is implementing it. If there is no such rule, it would also be enlightening.

    I think rather than going to the SEC, or the individual exhanges, it would be wiser to put the onus on IB and ask them to prove that there is such a rule and to request a specific quote (from the legal text, etc.)
     
    #23     Apr 6, 2002
  4. def

    def Sponsor

    i would think this is an exchange rule and not a SEC rule as data fees are governed by the individual exchanges.
     
    #24     Apr 6, 2002
  5. Babak

    Babak

    def, could you please provide us with a quote where the exchange says that if you are a pro but not paying fees for quotes as a pro you may not enter trades through the same exchange?

    ktm, could you e-mail the IB person who responded to you and ask the same question?
     
    #25     Apr 6, 2002
  6. ktm

    ktm

    IB mgmt is admitting in the last text that it is NOT a rule per se, but their method of implementation on a related rule. The NYSE rule is that non-individuals must pay pro fees to receive quotes. Rather than attempt to sort out who is paying and who is not, IB is just going to charge everyone. If I had 4 brokers who had this policy, I would have to pay these fees 4 times plus another time for my chart provider.

    In IB mgmt's last response, it says "but IB is not allowing pros to trade without market data because of the complications and legal overhead involved."

    This is the answer I was looking for. This is an IB policy intended to enforce the payment of quote fees by pros. I have spoken to the Market Surveillance Division of the NYSE and they have confirmed verbally that they have no policy regarding denying access to exchanges for non-receipt of quotes. They have asked that I put all of this in writing and forward it to them so they can look into this further. The NYSE guy also said that most brokers just deny quotes if the fees are not paid through them and that he had not heard of anyone going this far to attempt to enforce payment of quote fees.
     
    #26     Apr 7, 2002
  7. My view is that exchanges must keep track of payments that they receive. If they cash in twice trough broker AND data vendor then they should be in trouble. I complained with CME and asked for a refund. They said it´s good for them if they can fill their pockets faster with customers paying twice. I am going to file a complaint with CFTC.
     
    #27     Apr 23, 2002
  8. Babak

    Babak

    Got a short reply to a long message sent to IB mgmt:

    "sorry, since we have to pay, we have to collect"
     
    #28     Apr 23, 2002
  9. ktm

    ktm

    Keep in mind that the payments are for quotes. We are not disputing the availability or payment for quotes. The ABILITY TO BE ROUTED TO AN EXCHANGE is the problem.
     
    #29     Apr 23, 2002
  10. yet another reason to trade as a non-professional...no professional fees, lowered accounting fees, no ordinary income tax on futures...
     
    #30     Apr 23, 2002