What is IB's Hong Kong exposure?

J

jonnysharp

Hey guys,

I'm wondering what kind of exposure does IB have in Hong Kong? I know there's a IB office there and IB servers in HK, but I'm wondering are there any customer funds being held there?

I'm a New Zealand resident with a IB company account and I'm concerned if the Chinese Government could soon potentially interfere with American companies business there as backlash against increasing US sanctions and tensions. Is there a contingency plan for this?

Would it not now be a good move to re-position the IB Asia office & servers to a much more safer business friendly place like Singapore? This would make me much more comfortable as a customer going forward.

I don't see HK as a western business/trader friendly place going forward now that it's autonomy has been lost and is now under the control of the CCP, the risks now are significantly higher. This makes me want to not have anything to do with HK anymore as it's no longer the Hong Kong we once knew.

I would also like to add I've been trading with IB for 16 years and overall I'm very pleased with the tech, execution and pricing.

Hoping to hear some positive news back on this issue.

Thanks.
 
jonnysharp said:
Hey guys,

I'm wondering what kind of exposure does IB have in Hong Kong? I know there's a IB office there and IB servers in HK, but I'm wondering are there any customer funds being held there?

I'm a New Zealand resident with a IB company account and I'm concerned if the Chinese Government could soon potentially interfere with American companies business there as backlash against increasing US sanctions and tensions. Is there a contingency plan for this?

Would it not now be a good move to re-position the IB Asia office & servers to a much more safer business friendly place like Singapore? This would make me much more comfortable as a customer going forward.

I don't see HK as a western business/trader friendly place going forward now that it's autonomy has been lost and is now under the control of the CCP, the risks now are significantly higher. This makes me want to not have anything to do with HK anymore as it's no longer the Hong Kong we once knew.

I would also like to add I've been trading with IB for 16 years and overall I'm very pleased with the tech, execution and pricing.

Hoping to hear some positive news back on this issue.

Thanks.
More...

As you are a New Zealand person, your account would be opened under IBLLC.

I can only express my own personal views here but IBHK is not a US company. We have been in Hong Kong for 25 years and are fully licensed and capitalized as a company incorporated in Hong Kong. While our parent company is indeed a US company I personally have little if any concern over the items you raise above. US companies have been operating in China for years and I don't see that changing. There is too much to lose on both sides.

As for servers, we have servers in various locations around the world and continue to put resources into building redundancies globally. We continue to expand and will be launching IBKR Singapore in the next few weeks. I should add that the opening of a Singapore office is not because of concern over HK but as a result of our client growth in Singapore and it's increasing importance as a wealth management center. This has been in the works for years and our license was approved in January. (FYI, we've had colo at the exchange for years as we have been an off-shore member). Perhaps fortuitous timing as I do envision building a strong presence in The Lion City in addition to our offices in HK, Sydney, Tokyo and Shanghai.

On a side note, back in '95 I recall many running for the fences before the handover stating HK is doomed, yet HK endured and prospered. I don't see much difference now. HKEx is thriving. Listings continue to grow with big names such as secondaries from JD.Com and Netease this week. The derivatives market is vibrant (and has massive potential if they resolve the antiquated clearing structure which would reduce the cost of capital). China has also made it clear they support the HKD peg which is big vote of confidence.

That's just my view, take it for what it is worth. I understand and don't mean to downplay why some may be concerned but at least I'm putting my money where my mouth is and have no plans to go anywhere for now.
 
def said:
As you are a New Zealand person, your account would be opened under IBLLC.

I can only express my own personal views here but IBHK is not a US company. We have been in Hong Kong for 25 years and are fully licensed and capitalized as a company incorporated in Hong Kong. While our parent company is indeed a US company I personally have little if any concern over the items you raise above. US companies have been operating in China for years and I don't see that changing. There is too much to lose on both sides.
More...

Thanks Def, appreciate the quick and detailed reply, you've always been consistent on ET over the years. I understand and respect your views on HK and why IB is staying there however I will stick to my views of keeping my own capital away from there, glad to hear my account is with IBLLC.

Do you know if IB has any plans to become a registered Financial Service Provider in New Zealand? I know we're a small market, but full of keen traders down here!

Thanks.
 
jonnysharp said:
Thanks Def, appreciate the quick and detailed reply, you've always been consistent on ET over the years. I understand and respect your views on HK and why IB is staying there however I will stick to my views of keeping my own capital away from there, glad to hear my account is with IBLLC.

Do you know if IB has any plans to become a registered Financial Service Provider in New Zealand? I know we're a small market, but full of keen traders down here!

Thanks.
More...

NZ - lower priority but something I wouldn't rule out down the line.

As for HK, I should add I have plenty of skin in the game on the ground in HK beside work such as property and other investments and as I said, I'm not losing any sleep being here.

For what it is worth, perhaps part of my comfort arises from the many discussions over concerns such as yours with very well established people in HK ranging from academics, politicians, and expat businessman. The general consensus from these circles thus far has been that there isn't much to worry about at this time. We are in a fluid situation though and by no means am I an expert on China or Chinese culture. I don't think China is the the wild card here. They pretty much have done what they said they will. I'm more concerned with irrationally thought out sanctions or actions from the US which lead to cycle of tit for tat. This is just my view of course and kudos to those who think and act differently.
 
jonnysharp said:
Hey guys,

I'm wondering what kind of exposure does IB have in Hong Kong? I know there's a IB office there and IB servers in HK, but I'm wondering are there any customer funds being held there?

I'm a New Zealand resident with a IB company account and I'm concerned if the Chinese Government could soon potentially interfere with American companies business there as backlash against increasing US sanctions and tensions. Is there a contingency plan for this?

Would it not now be a good move to re-position the IB Asia office & servers to a much more safer business friendly place like Singapore? This would make me much more comfortable as a customer going forward.

I don't see HK as a western business/trader friendly place going forward now that it's autonomy has been lost and is now under the control of the CCP, the risks now are significantly higher. This makes me want to not have anything to do with HK anymore as it's no longer the Hong Kong we once knew.

I would also like to add I've been trading with IB for 16 years and overall I'm very pleased with the tech, execution and pricing.

Hoping to hear some positive news back on this issue.

Thanks.
More...
I share your concerns....

There are 2 issues it seems to me:
1) The massive property and financial bubble in Hong Kong which is set to burst.
2) The fact that the CCP has not honored the treaty they signed in 1997. Finance depends on all parties honoring the agreements they sign. Winnie the Poo doesn't inspire much confidence.

All things being equal I would sleep easier if IB offices and servers were in Singapore....
 
"As for HK, I should add I have plenty of skin in the game on the ground in HK beside work such as property and other investments and as I said, I'm not losing any sleep being here."

Anyone who has investment ties to HK ultimately serves at the pleasure of the CCP.
 
My worry about IBHK is they are bound by the HK laws, which include many of the emergency laws about handling assets.

e.g. trading with the enemy ordinance.

If you have some backup outside HK sure you have nothing to worry about, but many people do not have anything outside HK.
 
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