IB Hong Kong based accounts transferred to newly formed IB HK

Hi def,

Nice to have a IB representative on this forum.

Am I right that this insured bank deposit sweep program apply only to USD cash? Would other currencies be eligible for this insured bank deposit sweep program?

One more question. When funds are transferred from IB U.S to local entities such as IB HK, do the funds in the local entities still enjoy the interest income on idle cash balance?
https://www.ibkr.com/en/index.php?f=1595

Thank you for your presence here. It's reassuring. I've been a happy IBKR customer so far.

def said:
I'd add to Grulstmrnn's comment - with your definitive "unhappy" statement. The reality the IB Group would have to burn through $7 Billion USD of capital before SIPC and would even become a factor. The IBHK entity has significant capital, large excess liquid capital and maintains the same cautious risk management approach as we do for all of our entities.

As far as SIPC, orders and custody for US stocks go through the IBLLC omnibus account. That account would be protected by SIPC but we also cannot know in the extremely unlikely event of there ever being a need to rely on SIPC, if they would treat the account as one account or many individual accounts. I'd like to believe the latter but that is something we hope to never find out. While it may not mean much to you, it could offer some comfort that staff and management own the vast majority of IBKR. Our skin is very much in the game and to quote our website "Unlike other firms, where management owns a small share, we participate substantially in the downside just as much as in the upside which makes us run our business conservatively."

One final comment - for those with credit cash balances over $250,000 we do offer the ability to move up to $2,500,000 into FDIC insured Bank Deposit Sweeps. So helpme_please and GloriaB there you have it, you can enroll and be happy.

FAQ: Who is eligible to enroll in the Insured Bank Deposit Sweep Program?

The Insured Bank Deposit Sweep Program is offered to both US and foreign individual, joint (50/50 ownership only) and organization securities accounts (IBLLC or IB-UK [Introducing Broker] only) with free credit cash balances above $250,000. Free cash balances are cash balances in excess of margin requirements.

Individual accounts with a transfer on death provision, joint accounts that have uneven ownership, and trust accounts are not eligible because of the complexity of the FDIC rules.

https://gdcdyn.interactivebrokers.c...ntegratedcashmanagement&showcase=SweepProgram
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If you guys don't like it change to another broker.

IB moved all Australian residents accounts to IB Australia. Rules for foreign currency handling became unacceptable for many presumably to easily comply with new restrictions and service declined. Fortunately other companies have no local representation.

Some of IBs local introducers are also less ethically sound than IB so beware of your path to your funds (a friend fell into that trap).
 
For the record, I still like IB and will maintain an account. I just don't like the effect of being moved to an inferior Australian version.
 
kiwi_trader said:
For the record, I still like IB and will maintain an account. I just don't like the effect of being moved to an inferior Australian version.
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What's the difference between IB AU account versus IB US account, besides losing the SPIC insurance coverage for IB AU accounts?
 
Probably quite a number but I don't want to be too negative.

The killer for me was that you can't maintain balances in currencies like HKD. Initially it was only USD and AUD.
 
kiwi_trader said:
Probably quite a number but I don't want to be too negative.

The killer for me was that you can't maintain balances in currencies like HKD. Initially it was only USD and AUD.
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How are you going to transact in HK stocks if you can't maintain balance in HKD? After you sell HK stocks, where does your HKD cash go?
 
helpme_please said:
How are you going to transact in HK stocks if you can't maintain balance in HKD? After you sell HK stocks, where does your HKD cash go?
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For IBAU (Australia) accounts., the system will automatically do the conversion to HKD at the interbank rate so not an issue for trading.

For the currency holding part we're looking at add additional currencies but the issue is each currency requires separate segregated trust accounts which creates a fair amount of additional work. The ETA though is next year as we'll get margin up and running for non-wholesale accounts first.

Obviously this isn't our preferential model but ASIC has their rules which we must comply.
 
def said:
I take a more pragmatic approach - politics aside. HK is a financial center with a rule of law. The government, like all others, can instruct banks or brokers to freeze funds. The US certainly does this as an example. If the freezing of assets was wantonly abused, it would kill HK as a financial and banking center. That is the least of my concerns and I don't foresee as a real concern.
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Dear IB / def

Sorry to say that HK Citizens are getting concerns nowadays that our Govt would really take the chance to enforce the foreign currency control. So the question posted is getting more realistic.
 
iehmfok said:
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Dear IB / def

Sorry to say that HK Citizens are getting concerns nowadays that our Govt would really take the chance to enforce the foreign currency control. So the question posted is getting more realistic.
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I know there are concerns and I don't mean to downplay them but besides personally being heavily involved in the financial space in HK for the past 25 years, all the experts I speak with do not share that same concern.

Who do you think would be most hurt, who would such controls benefit and what would it accomplish?
 
Thanks IB/ def for the prompt reply.

May I learn who is the custodian for the IB HK clients for
- HK stocks
- US Stocks
 
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