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My statement is correct. You seem to be confusing a lien with hypothecation and while one needs to have a lien in order to hypothecate, having that lien does not necessarily provide one with the right to actually hypothecate. What this link you are referencing contains is acknowledgement...

No. You seem to be implying this in various threads and it's incorrect. The discussion above relates solely to OCC. A broker isn't afforded any greater rights or lien simply because positions are maintained in a portfolio margin account. The determination of any lien is based upon 140% of a...

A t-bill is a security and is therefore carried in the securities account at IB. It does have loan value however based upon it's margin rate and if this loan is the source of cash for meeting the margin requirement on the futures position, you will be charged interest on that loan and would be...

Aside from what has already been noted in terms of how our policies and practices differ from that allowed and what has been reported as taking place at MF Global, I'd note that the management and employee ownership of IB (at 88%) provides a strong incentive for management to act prudently and...

The OneChicago single stock futures contract is a hybrid product meaning that it is jointly regulated by the CFTC and SEC and can be carried in either account. IB elects to carry all such futures contracts in the securities account as this is the only way one can receive margin relief between...

It would be difficult for me to comment on a discussion which I wasn't a party to, but what I would note is that if you do not have a securities account (i.e., didn't not request permissions to trade securities at the point of application or via an account upgrade thereafter and received...

Yes, it does. Underlying the IB Universal account are two separate segments or sub-accounts, one for the securities positions and balances which are subject to the customer protection rules of the SEC and another for the commodities positions and balances which are subject to the customer...

What you are seeing is the first phase of a development effort which, at completion, will provide clients with full discretion as to which account segment (securities or commodities) excess cash is to be transferred as opposed to IB making that election. As is the case with most development...

IB UK accounts operate under a clearing agreement with IB LLC (the U.S. broker dealer and FCM) whereby all securities and exchange listed futures activities are cleared and carried on the books of IB LLC. The IB UK clients, therefore, are subject to the same customer protection and hypothecation...

No. Under your example, you would deduct the $100k short stock market value from cash (as that cash has been pledged as collateral to the lender since you are borrowing their stock). That leaves you with a remaining long cash balance of $100k. Since you are not borrowing funds to support your...

The customer agreement simply memorializes what is allowed by regulation and doesn't afford the broker any other rights as they relate to the obligation to protect customer assets. With respect to the hypothecation of long securities (you can't hypothecate a short position as it's a contingent...

The determination as to what securities, if any, a broker has a lien upon and may hypothecate in a securities account is based upon a review of end of day settled balances. If you day trade and hold no open positions at the end of the day (solely long cash) then there are no securities to which...

Each account stands on its own with respect to meeting the PDT rule. That is, there is no aggregation of equity across accounts, nor does a day trade in one account impact the count of day trades in another.

I can't speak for other brokers as you might be operating under some sort of special securities lending agreement, however, absent such agreement, a broker's right to place a lien upon and hypothecate stock does exist solely because the transaction took place in a margin account. The client has...

The SEC requirement that brokers reduce to possession and control fully-paid and excess margin securities does contemplate operational and settlement timing differences in which these situations can occur. I can't speak to your situation without investigating clearing records. I will be more...

Yes. That is why the SEC's rules relating to the protection of customers have not been written without consideration of coverage provided to those same customers under the Securities Investor Protection Act through which SIPC was created and operates. The SEC customer protection rule is intended...

If the broker hypothecates securities vs. cash (e.g. stock loan or bank loan) the funds must be returned to the segregated reserve account. If they are hypothecated to a clearinghouse as margin collateral, they are maintained in a customer account at the clearinghouse.

If you refer to the balance sheet, you'll note that customer receivables (e.g., margin debits) total $9.31 billion which at 140% total approximately $13.0 billion. You are correct in that we do don't fully utilize this capacity.

Recently, much has been written about the safety of customer assets held by brokers and we believe that customers are justified in their concerns. And so, we are writing to help clarify your understanding of how brokers are permitted to operate and, in particular, how Interactive Brokers...