IB in Australia

Epicurus said:
traderjo I wasn't aware that IB were setting up again in Australia. Thanks for the note. I don't currently use IB but was considering them.

From a quick web search it looks like they have resolved previous differences with the local regulators and have now got a AFSL (Australian Financial Services License) with all accounts to be transferred over to IB (Australia) from IB LLC by 30th Nov. To comply with an AFSL they'll have to maintain all client funds in a segregated trust account , i.e. this preserves funds in the case of company failure and makes them subject to other local regulation. I'm not familiar with SIPC protection but I would have thought the Australian regulation is just as likely to be stronger and more secure than an insurance scheme.

Any US trades will be done by IB Aust as a client of IB LLC, so IB LCC would presumably still have your SIPC protection as IB Aust's broker for international trading.

I've also seen recent television ads for IB for the first time so looks like they are gearing up to offer decent service to clients here (Sydney).
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"this preserves funds in the case of company failure " It is SUPPOSED to but if there is a fraud! you can end up being an "Unsecured creditor" mainly in case of OTC brokers like FX and CFD, since IB AUS will be offering Equity the ASX equity is identifiable hence somewhat protected but cash in A/c not sure! with respect to US stock via IBAUS + IBLLC may be you are correct the will get indirect protection.. regarding gearing up to offer decent service to I doubt why? becasue they still dont offer clients Margin T where as other US broker like Options express does.. and for a large broker like IB getting an AFSL should have been an easy job but if you look at history they had fair amount of issues with ASIC wonder why!
 
traderjo said:
Ib had it's troubles with ASIC the Australian regulator and as a results Australian clients got rough end of the stick
No Margin
No FX trading
NO Single Stock Futures
Now it seems something else has happened like in HK All Australian clients will have to transfer accounts with IB AUS
Meaning losing SIPC protection!
Yes there is an Australian equivalent called AFG but it is not as good as SIPC

Why IB does not get it's act together with ASIC and offer same level of service and protection as to those in USA?
Either offer that or get out
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AFG includes your investment outside of Australia? I doubt. For Hong Kong, it only protects Hong Kong stock or future.
 
What exactly is the problem that IBKR is having with the Australian securities regulator ASIC? Does ASIC find IBKR unsafe and is protecting Aussies from losing their savings? However, if IBKR is deemed unsafe, does it mean that all the other brokers operating in Australia today are deemed safer and financially stronger? The cynical people might suspect that ASIC is trying to protect local businesses using regulation as an excuse. What exactly is the real situation? Any good, educated guess?

I believe that IBKR, being a large listed company, should be fit to operate all over the world. I am a satisfied customer of IBKR so far. Still, I get worried about a broker if a regulator shows the broker the door because a substantial portion of my money is with this broker. Did the regulator spot something worrisome that customers didn't?
 
Going by educated guess.... anybody directly operating in AUS needs proper licencing relative to what exactly they are offering so for example Options express has AFSL and people can trade both AUS and US stock options,
IB USA should have done the same from the the start.. but if you search IB had "issues" with ASIC many times, be it providing Margin / FX trading etc
http://asic.gov.au/about-asic/media...e-prompts-brokerage-to-stop-new-margin-loans/
http://asic.gov.au/about-asic/media...refunding-15-million-to-australian-customers/
https://www.financemagnates.com/for...larifies-actions-against-interactive-brokers/

I mean how difficult is it to get a licence to operate OTC FX in AUS ..If Oanda and others can do it so can IB

For somebody as big as IB it should be a piece of cake to get 100% regulated in AUS but why did they keep having trouble with ASIC is beyond imagination...may be pig headdedness, Ignorance, so even today after creating IBAUS their service is short of 100%... Many small brokers and groups trade via IB USA so I doubt if it is about not having enough business from down under!
" Does ASIC find IBKR unsafe" probably not...it is just they want IB to have a proper AUS licencing . nothing wrong with that.. will IB listen and stop fighting with ASIC,,,
 
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helpme_please said:
What exactly is the problem that IBKR is having with the Australian securities regulator ASIC? Does ASIC find IBKR unsafe and is protecting Aussies from losing their savings? However, if IBKR is deemed unsafe, does it mean that all the other brokers operating in Australia today are deemed safer and financially stronger? The cynical people might suspect that ASIC is trying to protect local businesses using regulation as an excuse. What exactly is the real situation? Any good, educated guess?

I believe that IBKR, being a large listed company, should be fit to operate all over the world. I am a satisfied customer of IBKR so far. Still, I get worried about a broker if a regulator shows the broker the door because a substantial portion of my money is with this broker. Did the regulator spot something worrisome that customers didn't?
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Help_me please, I don't know the details on this and curious if someone is more informed than me. However, I suggest it's not related to IBKR company issues. A number of large US brokers left the Australian market some years ago and we are quite poorly serviced here for the Options that I trade. I believe it's simply that the cost and compliance work here isn't justified by the size of the market. I doubt that relates to protection of local businesses, although possible, but mostly I think just an outcome of previous financial scandals and collapses over the years that have built up the regulations we have.

Our main local brokers have generally ended up owned by the biggest banks, which already have stringent compliance obligations anyway. We also have an active CFD market so get the UK based platforms operating here in cfds and forex. As the US doesn't allow CFD's, US brokers I believe are geared more to Options, which is miniscule in Australia compared to US, so they are left competing for Forex, Equity and other customers basically against some strong competitors in a limited size market. The main users of IB in Australia would be traders wanting access to the US market, so I guess they're just now getting around to setting up properly to pick up these customers.
 
I too believe that IB is safe. I am more inclined to believe that it was a business decision IB made. I suspect IB reached the conclusion that Australian customers are not profitable enough to be worth its attention after compliance cost. Nevertheless, if IB were to take the long-term view, it should have just bitten the bullet. It has left a bitter taste on Australian customers after this ugly episode. If IB wants to take back this Aussie market after the regulatory issues have been resolved, it will be a uphill task now. For the sake of customers, I think IB should put aside its unhappiness with the regulator and bite the bullet. Australia is after all an amazing country with 25 years of uninterrupted economic recession. Certainly not to be ignored. By the way, I'm not Australian but an admirer of the lucky country.

traderjo said:
Going by educated guess.... anybody directly operating in AUS needs proper licencing relative to what exactly they are offering so for example Options express has AFSL and people can trade both AUS and US stock options,
IB USA should have done the same from the the start.. but if you search IB had "issues" with ASIC many times, be it providing Margin / FX trading etc
http://asic.gov.au/about-asic/media...e-prompts-brokerage-to-stop-new-margin-loans/
http://asic.gov.au/about-asic/media...refunding-15-million-to-australian-customers/


For somebody as big as IB it should be a piece of cake to get 100% regulated in AUS but why did they keep having trouble with ASIC is beyond imagination...may be pig headdedness, Ignorance, so even today after creating IBAUS their service is short of 100%... Many small brokers and groups trade via IB USA so I doubt if it is about not having enough business from down under!
" Does ASIC find IBKR unsafe" probably not...it is just they want IB to have a proper AUS licencing . nothing wrong with that.. will IB listen and stop fighting with ASIC,,,
More...
 
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