IBKR UK: Risk of money not available for withdrawal on demand immediately

H

helpme_please

I received an email today from IBKR that made me pretty worried. It says -

New rules issued by the UK Financial Conduct Authority allow IBKR UK to place client monies in deposit accounts which require a notice period of up to 95 days for withdrawals. This means there is a minimal risk your money may not be immediately available for withdrawal on demand, particularly in the unlikely event of an unprecedented and extreme increase in client withdrawals at the same time.

Clause 3.1.2.2 of the Client Agreement has been updated to reflect the new rules.

Link to new agreement.
https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=3066

To my knowledge, IBKR UK is used for futures. Does this mean if I sell out my futures holdings, there is a possibility that the cash proceeds must stay in IBKR UK deposit for 95 days and the money cannot be reallocated to purchase equities which is not handled by IBKR UK?

Any IBKR representatives here? Please help to clarify. I have been a happy customer of IBKR but please understand that new changes that affect clients' ability to move money around or take back money make your clients nervous.
 
helpme_please said:
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Any IBKR representatives here? Please help to clarify. I have been a happy customer of IBKR but please understand that new changes that affect clients' ability to move money around or take back money make your clients nervous.
More...

Why not contact your broker? Why ask here? Are you suggesting that you would get an IB answer here faster than by contacting IB directly? Fascinating.
 
Overnight said:
Why not contact your broker? Why ask here? Are you suggesting that you would get an IB answer here faster than by contacting IB directly? Fascinating.
More...

Posting here creates awareness. That is not a bad thing unless the post is a fake news. Furthermore, there are lots of questions being asked on this forum about IBKR. Should everyone stop posting on this forum and ask IBKR directly? If that is the case, what is the purpose of this forum?

Contacting IB directly is the best option, of course, on top of asking here to get feedback from fellow customers of IB. Things get interesting when IB's answers and clients' answers on this forum are different. Proper due diligence should involve asking different parties.
 
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@helpme_please

Thanks for your post. I for one do not have any business with IB, nor business in the UK. I do however find it quite interesting that "bail-in" rules prevalent throughout the EU banking sector have made their way in general concept to brokerage accounts in the UK.

What I find odd is use of the word "allow" in the first sentence. This implies the procedure described is not mandatory, but rather a chosen method for adherence to the UK rule. I did not read the client agreement.

Thanks again for posting.
 
Definitely not good news, a great part of IB is the easiness to withdraw funds, including using international wires. I received this same email btw.

"particularly in the unlikely event of an unprecedented and extreme increase in client withdrawals at the same time. "

That's what would happen when one want to close their account, can pose problems.

edit : received the same message
 
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For those holding a IB UK account, does that mean all funs can be frozen more easily than before ?

i'll give a call to IB, possibly tomorrow regarding that message.
 
It's the part 3, starting page 7 in the link below :

https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=3066

"Your money will be held by IB UK as client money in accordance with the applicable FCA
client asset regulations
(“CASS Regulations”), which among other things, require IB UK to
hold your money in one or more client bank accounts segregated from IB UK’s own funds.
We may allow another organisation, such as an exchange, clearing house or an
intermediate broker, to hol
d or control client money for the purpose of a transaction for you
through or
with that organisation, or to meet any obligation.
3.1.2.2
As permitted under
FCA R
ules
, your money may be held in a client money bank account
with a notice period of up to 95 days for
any withdrawals. This means that there is a risk that
your money may not be immediately available for withdrawal on demand particularly in the
unlikely event of an unprecedented and extreme increase in client withdrawals at the same
time. However, we ende
avour to manage that risk through a periodic review of our cash
flows and liquidity and ensuring we have adequate client money to meet your requirements."

"Particularly in the unlikely event of an unprecedented and extreme increase in client withdrawals at the same time. "

The lack of S at client has me confused, but the above sentence seems to mean increase of withdrawals from IB clients, so one might have the money stuck when IB clients run to the exit en masse, one getting their money stuck is not necessarily (at all ?) linked to their own withdrawal pattern.
Besides this does seem to apply to only the money held by IB UK, I suspect it's also the case for customers registered with IB UK, who have some funds (most of they trade US stocks) with IB LLC. Will check how it looks next time i open account management, called IB HK today btw, tried to get the general assistance but gave up after a few minutes on hold.
 
Overnight said:
Why not contact your broker? Why ask here? Are you suggesting that you would get an IB answer here faster than by contacting IB directly? Fascinating.
More...
Not only will he get a faster answer but it will be more accurate and answered more intelligently! Of course the UK version of IB customer service might actually be staffed by intelligent, helpful folks that know the first thing about trading, unlike the U.S. version.
 
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