IB: "...terminate our relationship with you..."

[_terminus_]

The account was closed and an LLC was formed instead. I believe after you're flagged for this, there's little you can do aside from long and expensive court battles.

So you were forced to do so, unless you changed broker. However, would you say you are better off trading as an LLC than as an individual trader? Taxes, etc.

 

[d08]

So you were forced to do so, unless you changed broker. However, would you say you are better off trading as an LLC than as an individual trader? Taxes, etc.

It depends on your circumstances. I needed the LLC for compliance but there were also tax benefits. That all depends on where the LLC. Right now I trade as an individual.

I'm curious if anyone else got the AML (anti-money laundering) letter asking for source of funds and copies of documents...

 

[d08]

Have you looked at tastyworks or Schwab International?

Not yet. I will submit the required documents and see what they say. Funny that you can be fully legal and compliant but still faced with this uncertainty.

 

[tonyf]

Not yet. I will submit the required documents and see what they say. Funny that you can be fully legal and compliant but still faced with this uncertainty.

check out tastyworks as well.

 

[tonyf]

It depends on your circumstances. I needed the LLC for compliance but there were also tax benefits. That all depends on where the LLC. Right now I trade as an individual.

I'm curious if anyone else got the AML (anti-money laundering) letter asking for source of funds and copies of documents...

"Please click the link below and provide the requested information and supporting documentation within ten (10) days. If we do not receive a response, restrictions may be placed on your account."

I wonder what restrictions they are talking about

 

[Twinsen]

Do you guys have very large accounts, or do they ask supporting documents even for smaller accounts, e.g. less than $100k. What do they mean by source of funds if you send money from your personal bank account? Do they need bank statement? Also money can be your life savings.

 

[d08]

Do you guys have very large accounts, or do they ask supporting documents even for smaller accounts, e.g. less than $100k. What do they mean by source of funds if you send money from your personal bank account? Do they need bank statement? Also money can be your life savings.

"Source of funds" seems to mean where did you get the money to fund your trading account with from. I also made errors in that I've confused "source of wealth" and "source of funds".

If it's "source of funds" you have to prove the source with documentation. The form they provide has the required documents listed. So, if it's from sale of property, you need to have the sale contract etc.

It's really intrusive but we're left without many options.

"Please click the link below and provide the requested information and supporting documentation within ten (10) days. If we do not receive a response, restrictions may be placed on your account."

I wonder what restrictions they are talking about

I assume you will be placed in liquidation-only mode. Will probably be allowed to wire money out as you haven't committed any crime, they cannot hold funds without sufficient reasoning.

 

[tonyf]

"Source of funds" seems to mean where did you get the money to fund your trading account with from. I also made errors in that I've confused "source of wealth" and "source of funds".

If it's "source of funds" you have to prove the source with documentation. The form they provide has the required documents listed. So, if it's from sale of property, you need to have the sale contract etc.

It's really intrusive but we're left without many options.



I assume you will be placed in liquidation-only mode. Will probably be allowed to wire money out as you haven't committed any crime, they cannot hold funds without sufficient reasoning.

Not sure they can auto liquidate on their own after 10 days! They talk about restrictions, not liquidation. My guess is that they will restrict purchase of securities or contributions, but allow withdrawals, transfer outs and sales.

Time to short the IB stock!

 

[d08]

Not sure they can auto liquidate on their own after 10 days! They talk about restrictions, not liquidation. My guess is that they will restrict purchase of securities or contributions, but allow withdrawals, transfer outs and sales.

Time to short the IB stock!

Yes, liquidation-only means you can only liquidate positions, not create new ones. You'll be doing it, not them.

 

[Twinsen]

"Source of funds" seems to mean where did you get the money to fund your trading account with from.

If money come from your personal bank account then your bank account is the source of funds, right? But they want to see how you got your money in a bank account? Will bank statement work in this case where incoming transfer is visible, for example if you get payments from Google Adsense or something like this. What documents are listed in the form?

Yes, liquidation-only means you can only liquidate positions, not create new ones. You'll be doing it, not them.

When in liquidation mode, is it possible to convert currency (if you hold USD convert it to EUR or vice versa)? Because, for example, SEPA payment can be sent only in EUR, not USD.