Brexit and IB

Daal said:
Pretty nice from IB to do this. Most other brokers would terminate your account and leave you hanging. IB is setup all over the world and can move clients around as insane governments shoot themselves in the foot
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Not only a nice move though as all EU based customers are with IBUK I think, that would be a big loss of business to give them all up I suspect. Still, IB has increased compliance for many EU customers recently, and have written in other communication they might have reduced capacity with the new entities, so they might be looking into closing a bunch of EU accounts
 
_terminus_ said:
Today I received a proposal to migrate to IBIE.

From "The Documents":

"IBIE is a member of the Irish Investor Compensation Scheme (“ICS”), which provides compensation to eligible investors should IBIE become insolvent. Private individuals, that are clients of IBIE, will be eligible to claim under the ICS for up to EUR 20,000 under the limits and conditions set out in the Investor Compensation Act 1998 (as amended)."

Compared to the previous $500k/250k protection limit, €20k seems to be ridiculously low to me.

That means that if you have $100k on your account, and IBIE defaults, Irish law will refund you up to a maximum of €20k.
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I think this insurance scheme is only useful if your broker goes bust and you had cash or some OTC instruments in your account. Exchange traded instruments are on custodial account.

I also noticed that OTC spot metals and OTC metal futures won't be available anymore, and no withdrawals possible if negative cash balance (margin). Also not sure about spot FX.
 
Sure. Even "nicer" is such Irish Compensation Scheme.

Would an Irish investor with 1M worth of capital in the bank be compensated with just 25k, if the bank goes bust?

Hard to believe.

Daal said:
Pretty nice from IB to do this. Most other brokers would terminate your account and leave you hanging. IB is setup all over the world and can move clients around as insane governments shoot themselves in the foot
More...
 
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_terminus_ said:
Sure. Even "nicer" is such Irish Compensation Scheme.

So would an Irish investor with 1M worth of capital in the bank be compensated with just 25k, if the bank goes bust?


Hard to believe.
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it's about 100k in that case, under the Financial Service Compensation Scheme and other European scheme. 85k gpb for UK and some others, 100k euro for the rest of Europe
 
Still unbelievable. Very unlikely IB will go bankrupt, but a ridiculously low protection limit anyway.

Speaking of which, does anyone know if there is any form of private insurance to protect one's capital from broker risk of failure?

blink18 said:
I think this insurance scheme is only useful if your broker goes bust
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Has anybody proceeded through the migration from IBUK to IBCE already? If yes, did you experience any problems? Were your postiions locked from selling e.g during some time? If yes for how long?
 
Any reference to such European scheme?

Then what does that €25k limit refers to, exactly?

cesfx said:
it's about 100k in that case, under the Financial Service Compensation Scheme and other European scheme. 85k gpb for UK and some others, 100k euro for the rest of Europe
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_terminus_ said:
Any reference to such European scheme?

Then what does that €25k limit refers to, exactly?
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Here it is:
https://ec.europa.eu/info/business-...ial-institutions/deposit-guarantee-schemes_en

UK and some banks like in Eire and Cyprus are covered by a different but similar protection, FSCS

I have no idea about the 25k.. and I thought any IB customer would be insured under sipc, but it's an insurance and never know when/if they pay.
Not that I see any risk in IB, but 2008 teaches a lesson.
All eggs in the same basket probably not the best idea.
 
Thank you for the link.

cesfx said:
All eggs in the same basket probably not the best idea.
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That's for sure, but with just one egg you have less options :)

I guess SIPC only protects customers of US firms. IBIE is Irish.
 
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