Discussion in 'Interactive Brokers' started by terr, Oct 1, 2021.
This is why you should have multiple accounts at different brokers
Does this have something to do with this new SEC rule regarding OTC stocks? I saw the notice and acknowledged it but didn't really understand it.
OP provides no details of what he is trading - complete fail post.
No, that’s different. A lot of otc stocks aren’t easily traded any more under that new rule that started Tuesday, but it’s nothing to do with OP.
Just relaying what I saw someone post.
I think what may be going on here is that IB is short the stock and has not borrowed in a timely fashion. If that is the case they eventually hit a threshold where they are not allowed to further short sell the stock.
Check out rule 204 here:
I'm not sure why their failure to borrow should prevent you from borrowing. That seems like a conflict or interest between you and your broker, but I think there may some reason it's set up that way in SEC regulations for tracking purposes.
This has more details:
Hmmm... Looks a little fishy. Big boys looking after their chums
This is reference to rule 204. The issue occurs when IBLLC has a buy-in that gets allocated to one of our affiliate accounts. Ie. US client gets a recall from stock lent from an affiliate omnibus account. There was a no-action letter associated with rule 204 that requires brokers to enforce that the bought in client remain a net purchaser in the amount of the allocated buy-in that day. Unfortunately this requires the affiliate account to prevent shorting for the day of the buy-in. Fortunately instances occur rarely.
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