It doesn't take 10 days to clear a check. It takes 10 days, or more (in some cases) to BOUNCE a check.
Like most corporations, IB does not get a list every day of those checks that have cleared. Few banks provide such a service (C isn't one of them for less than a BIG fee). Most banks will submit a bounced check (NSF) a second time for corporate customers and there is sometimes a waiting period (up to 7 days - determined by the bank - not the customer) before the second submission. If it is returned on the second pass, it is then officially bounced and the presenter is notified. By the time the bounce shows in the electronic records available to the customer, it can easily be 10 - 15 business days.
There are many hucksters out there who will adjust their acct balances and write smaller checks to firms like IB to test their submission timing. Once they have the timing down, they go in with larger funds and clean up using arb strategies or other non-market related schemes. Some people make a living doing this. IB is especially susceptible because they are largely electronic.
Do you doubt for a moment that IB does not want you to have your deposited funds to trade at the earliest moment possible?
Not a chance. They are balancing risk with customer service. In doing so, they have created a tremendous incentive to wire funds.
Firms with more lenient policies are likely writing off a good bit of bad $$$ each year. I suspect that cost is passed along to customers.
Like most corporations, IB does not get a list every day of those checks that have cleared. Few banks provide such a service (C isn't one of them for less than a BIG fee). Most banks will submit a bounced check (NSF) a second time for corporate customers and there is sometimes a waiting period (up to 7 days - determined by the bank - not the customer) before the second submission. If it is returned on the second pass, it is then officially bounced and the presenter is notified. By the time the bounce shows in the electronic records available to the customer, it can easily be 10 - 15 business days.
There are many hucksters out there who will adjust their acct balances and write smaller checks to firms like IB to test their submission timing. Once they have the timing down, they go in with larger funds and clean up using arb strategies or other non-market related schemes. Some people make a living doing this. IB is especially susceptible because they are largely electronic.
Do you doubt for a moment that IB does not want you to have your deposited funds to trade at the earliest moment possible?
Not a chance. They are balancing risk with customer service. In doing so, they have created a tremendous incentive to wire funds.
Firms with more lenient policies are likely writing off a good bit of bad $$$ each year. I suspect that cost is passed along to customers.
