I recently relocated from HK to UK and started the process of IB account migration, foolishly thinking the margining would be the same for a risk based margin account. However support said IBUK are subject to FINRA rules (is that not a US rule?) hence making most of my Japan equities positions unmarginable. The transfer failed but they insisted that I must transfer my account. Why is that the different in margin rules and am I not allowed to just keep my position in IBHK, due to some laws, I guess?
Why did you start the migration in the first place? Because you thought you were obliged? Wouldn't that depend on your nationality (i.e. I don't immediately see what your location has to do with it...)?
I think it depends on the tax residency. The reason for migrating the account, part of it is "why not" and part of it I think IBUK offer more protection of my money.
It indeed depends on tax residency. If you are deemed to be tax resident in the UK, IBKR will force you to transfer your account to an account with their IBUK subsidiary. I had something similar a couple of years ago when I left Japan. IB insisted that I gave up my account with the IB Japan subsidiary, and transfer it to the appropriate subsidiary. Which was IB US in my case.
You would be under FINRA rules for IBUK but that doesn't mean you can't have margin on Japanese stocks unless the stocks are stocks under under the FINRA ready market and capitalization rules. ($500mm market cap) You can also apply for portfolio margin if your account is $100K in equity. As for the IBUK account. If you update your address to one in the UK, you'll have to apply for an IBUK account as we are regulated in the UK and you'll fall under UK regulations.
Hi Def, thanks for answering. My UK account is already set to "risk based" and the proposed transfer is > 100k, (it is empty right now) and all my stocks have capitalization above this level. I guess I need to wait for the ticket reply from the margin department.
Sorry for the late reply but there should be margin available. IBUK introduces to IBLLC and offers the same margin (Reg-T and portfolio margin for accounts > $100K in NAV). Can you check again to make sure you opened a margin account and if not, you can request an "upgrade" via the client portal.
Yes the destination account is a portfolio margin account. Some of my theories why the transfer failed: 1. The system is too stupid and apply reg-T margin when validating the transfer of >$100k, since there is nothing at the destination account before the transfer. 2. The SPX box that I hold is not marginable (not likely if same rules as IBLLC) 3. The system made an error and calculate margin for my SPX box for each leg individually (this is the explanation given to me in the first transfer attempt) 4. IBLLC offer considerably less margin to Japanese equities than IBHK even in the case of portfolio margin. (I think this is the most likely reason. For example 2491.T is listed as requiring 60% initial and 50% maintenance margin from the product listing page, but the requirement from IBHK is much less than this)