Brexit Planning message from IB to EU customers

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alwaysonit
Posts: 154
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Re: Brexit Planning message from IB to EU customers

Post by alwaysonit »

Pretty sure I read they will liquidate all of your positions - which would prove to be costly as you would then have to buy back in and lose out on transaction fees and bid/ask spread.
krasnall
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Re: Brexit Planning message from IB to EU customers

Post by krasnall »

I found one more interesting difference between current arrangement and IBIE:
Please note that IBIE offers financing for securities and commodities trades but cannot support withdrawals of borrowed funds. You will be free to withdraw any free cash not needed to support your open positions. If you would like to withdraw additional funds, you can sell positions and withdraw the proceeds.
jack92
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Re: Brexit Planning message from IB to EU customers

Post by jack92 »

alwaysonit wrote: Sun Dec 06, 2020 4:51 am Pretty sure I read they will liquidate all of your positions - which would prove to be costly as you would then have to buy back in and lose out on transaction fees and bid/ask spread.
Makes sense, thanks for the clarification!
alwaysonit
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Re: Brexit Planning message from IB to EU customers

Post by alwaysonit »

Is anybody planning to not agree on the migration?
steve1209
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Re: Brexit Planning message from IB to EU customers

Post by steve1209 »

alwaysonit wrote: Tue Dec 08, 2020 8:58 am Is anybody planning to not agree on the migration?
I believe we have not much choice if we want to keep trading through IB isn't it?
DJN
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Re: Brexit Planning message from IB to EU customers

Post by DJN »

Hi,
transfer of account all done and dusted. I haven't noticed anything untoward so far.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Spgold
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Re: Brexit Planning message from IB to EU customers

Post by Spgold »

DJN wrote: Tue Dec 08, 2020 10:50 am Hi,
transfer of account all done and dusted. I haven't noticed anything untoward so far.
DJN
Hi, if you do not mind, where were you redirected to ? (I assume that by transfer of the account means you were taken to one of the other IBKR choices).

Thanks
DJN
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Re: Brexit Planning message from IB to EU customers

Post by DJN »

Spgold wrote: Wed Dec 09, 2020 3:39 am
DJN wrote: Tue Dec 08, 2020 10:50 am Hi,
transfer of account all done and dusted. I haven't noticed anything untoward so far.
DJN
Hi, if you do not mind, where were you redirected to ? (I assume that by transfer of the account means you were taken to one of the other IBKR choices).
Thanks
Hi,
no problem. I was transferred from the IBUK to IBLux. This was what I wanted but I was initially told that this wasn't feasible and that I would need to go to IBIE. However in the end I am in IBLux which suits my tax situation perfectly. Otherwise I would have had to open a new account elsewhere.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
alwaysonit
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Re: Brexit Planning message from IB to EU customers

Post by alwaysonit »

How does where the IB account is held affect tax?
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

alwaysonit wrote: Wed Dec 09, 2020 3:55 am How does where the IB account is held affect tax?
Indeed, I thought the fund domicile determines the tax.
DJN
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Re: Brexit Planning message from IB to EU customers

Post by DJN »

Hi,
it affects certain fund types for the purposes of remittance taxation for non domiciled residents. Just a technical anomaly that means non domiciled residents can take advantage of remittance taxation at their marginal rate and keep capital accumulating offshore.
DJN
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teapeaage
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Re: Brexit Planning message from IB to EU customers

Post by teapeaage »

Hi all,

I was also offered a migration to Hungary. I don't want to do that.

Is there a way to ask them to be transferred to Luxembourg? Has anyone successfully done so?

If I have over 200k in assets, what do I do now? Diversify across IB, Degiro, something else? Any other brokers you'd recommend?

Would be greatly appreciated.
DJN
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Re: Brexit Planning message from IB to EU customers

Post by DJN »

Hi,
I asked IBKR by telephone to move to Lux for one of my two accounts and was refused. In the end they migrated one account to Lux and are insisting on the other one going to IE, I don't want to go to IE for tax reasons and I will not agree to that migration. I will try the telephone approach again but the person I spoke to previously was a bit robotic and insisted on no adjustment. I don't understand their inability to be flexible other than fear of EU unbending legal retribution.
I will leave that account alone without agreeing to migration and see what they do. If they close the positions I will transfer to SwissQuote, which is not a very good platform and suffers from a peculiarly Swiss disorganisation but I have no other options. BTW deGiro also insist on you using their platform in your country of residence.
For most people migrating to an IE account should be fine.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
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Bogle1984
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Re: Brexit Planning message from IB to EU customers

Post by Bogle1984 »

There is only a protection upto 20.000€ Maximilian Rimpfl from IB says. They hold the assets in seggregated accounts, but in case of an insolvency of IB the assets can still be liquidated to pay the creditors of IB. SPIC is only valid for ETF's domiciled in the US. So not valid for most european investors.

https://www.youtube.com/watch?v=t10XREl-81o

Net assets of IB are above 8,5 billion $ US, Rimpfl says. So in his opinion an insolvency of IB seems not to be a risk.

I am a it concerend about this. Lehman brothers had an investment-grade A2 rating "on review" a mere five days before it filed for bankruptcy, there as the investment-grade of IB is BBB+.

I won't transfer my account to IBIE, instead I am thinking about transfering my Assests to my broker in germany. Even if the transaction costs are higher, your assets are safe from a potential liquidation of the broker.
DJN
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Re: Brexit Planning message from IB to EU customers

Post by DJN »

Bogle1984 wrote: Fri Dec 18, 2020 5:13 am I won't transfer my account to IBIE, instead I am thinking about transfering my Assests to my broker in germany. Even if the transaction costs are higher, your assets are safe from a potential liquidation of the broker.
Hi,
why do you believe that your assets are safer in Germany with a local broker?
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
jokerr
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Re: Brexit Planning message from IB to EU customers

Post by jokerr »

Well.. I consider this as bad news..
I saw the email today as well instructing me to move under the Hungarian IB.

I do not keep cash but I have over 600k invested and the following phrase is not encouraning at all: There is only a protection upto 20.000€ Maximilian Rimpfl from IB says. They hold the assets in seggregated accounts, but in case of an insolvency of IB the assets can still be liquidated to pay the creditors of IB. SPIC is only valid for ETF's domiciled in the US. So not valid for most european investors.

What do you guys suggest? Do you consider moving to a Swiss broker as an option?
steve1209
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Re: Brexit Planning message from IB to EU customers

Post by steve1209 »

Bogle1984 wrote: Fri Dec 18, 2020 5:13 am There is only a protection upto 20.000€ Maximilian Rimpfl from IB says. They hold the assets in seggregated accounts, but in case of an insolvency of IB the assets can still be liquidated to pay the creditors of IB. SPIC is only valid for ETF's domiciled in the US. So not valid for most european investors.

https://www.youtube.com/watch?v=t10XREl-81o

Net assets of IB are above 8,5 billion $ US, Rimpfl says. So in his opinion an insolvency of IB seems not to be a risk.

I am a it concerend about this. Lehman brothers had an investment-grade A2 rating "on review" a mere five days before it filed for bankruptcy, there as the investment-grade of IB is BBB+.

I won't transfer my account to IBIE, instead I am thinking about transfering my Assests to my broker in germany. Even if the transaction costs are higher, your assets are safe from a potential liquidation of the broker.
Is your German broker is protected against insolvency risk?
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Bogle1984
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Re: Brexit Planning message from IB to EU customers

Post by Bogle1984 »

Every broker can default. But in Germany, as far as I know, costumers assets can not be liquidated to pay the obligations to the creditors.
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

So, we cannot choose between IBIE and IBCE; we have to take what is auto assigned to us?
mrekvy491
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Re: Brexit Planning message from IB to EU customers

Post by mrekvy491 »

I was asked to transfer to IBCE. Seems like around 90% of the funds of up to 100k EUR will be covered. You can find it here https://ibkr.info/node/3587 in Question 4 of Part B.

I will transfer and check if this is legit, and ask my wife to join IBCE and split our funds for now. But this doesn't change the 'problem' that our supposedly compounding assets will soon go over the limit. Covered amount feels too low indeed even if the 100k EUR compensation is legit.
steve1209
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Re: Brexit Planning message from IB to EU customers

Post by steve1209 »

Wow IB Hungary covers 100k on assets losses but IB Ireland just 20k??

What’s happening here? Why I was not proposed to move to Hungary but to Ireland instead?
mushyyy
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Re: Brexit Planning message from IB to EU customers

Post by mushyyy »

Bogle1984 wrote: Fri Dec 18, 2020 6:59 am Every broker can default. But in Germany, as far as I know, costumers assets can not be liquidated to pay the obligations to the creditors.

Is it legal in any country to liquidate customers assets( which are not IB assets) to pay for company debt?
I’m also not sure what to do, but can somebody list the possible cases in which an IB customer will lose the assets?
tsrz
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Re: Brexit Planning message from IB to EU customers

Post by tsrz »

mushyyy wrote: Sat Dec 19, 2020 5:59 am
Bogle1984 wrote: Fri Dec 18, 2020 6:59 am Every broker can default. But in Germany, as far as I know, costumers assets can not be liquidated to pay the obligations to the creditors.

Is it legal in any country to liquidate customers assets( which are not IB assets) to pay for company debt?
I’m also not sure what to do, but can somebody list the possible cases in which an IB customer will lose the assets?

+1
TedSwippet
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Re: Brexit Planning message from IB to EU customers

Post by TedSwippet »

mushyyy wrote: Sat Dec 19, 2020 5:59 am Is it legal in any country to liquidate customers assets( which are not IB assets) to pay for company debt?
In the UK, sadly it actually sort-of is, at least in a limited way. Details in this post:

Percent of assets in a single broker - Bogleheads.org
Laurizas
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Re: Brexit Planning message from IB to EU customers

Post by Laurizas »

It is not in UK, it is everywhere. Nobody is going to work for free while recovering somebody's assets. But it does not mean, that say, IBUK obligations could be satisfied from clients' assets.
Laurizas
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Re: Brexit Planning message from IB to EU customers

Post by Laurizas »

Bogle1984 wrote: Fri Dec 18, 2020 5:13 am SPIC is only valid for ETF's domiciled in the US.
Is this said on video you provided?
Bogle1984 wrote: Fri Dec 18, 2020 5:13 am Net assets of IB are above 8,5 billion $ US, Rimpfl says. So in his opinion an insolvency of IB seems not to be a risk.
Which IB has assets above 8,5 billion $ US? IB LLC? IBUK? IBIE or IBCE are separate legal entities, they do not have so many assets and IB LLC is not legally obligated to cover their debts.
sean.mcgrath
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Re: Brexit Planning message from IB to EU customers

Post by sean.mcgrath »

Well, I got sent to Ireland. A pretty straightforward process, and I will say that the communication was very good.
steve1209
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Re: Brexit Planning message from IB to EU customers

Post by steve1209 »

Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
mrekvy491
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Re: Brexit Planning message from IB to EU customers

Post by mrekvy491 »

steve1209 wrote: Sun Dec 20, 2020 9:54 am Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
I was reading the clause once again and the 100k is the maximim value.

Not so sure if they will cover most of the investment of up to 100k for everyone or will cover this amount only in very exceptional cases. I will look more into it later but for now it seems like the brokerage risk just got higher for everyone.
sean.mcgrath
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Re: Brexit Planning message from IB to EU customers

Post by sean.mcgrath »

steve1209 wrote: Sun Dec 20, 2020 9:54 am Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
I am not. Neither will help me much in a worst-case scenario. I think that I just need to trust in the various safeguard mechanisms (IB, EU) that are in place.
HoldMyBeer777
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Re: Brexit Planning message from IB to EU customers

Post by HoldMyBeer777 »

teapeaage wrote: Thu Dec 17, 2020 4:58 pm Hi all,

I was also offered a migration to Hungary. I don't want to do that.

Is there a way to ask them to be transferred to Luxembourg? Has anyone successfully done so?

If I have over 200k in assets, what do I do now? Diversify across IB, Degiro, something else? Any other brokers you'd recommend?

Would be greatly appreciated.
Others have tried to ask to me moved to another entity, but without success. You can't choose.

I took a look at some alternatives and I decided to register for two of them. Here are my conclusions so far:
Sogotrade: https://www.sogotrade.com/
A very good alternative for buying options, bad for stocks -> $2.88 commission for orders less than 100 shares (?!)

TastyWorks: https://tastyworks.com/ [URL edited by Moderator Misenplace]
Also good for options - no commission for closing options (!) and no commission for buying stocks.

While reviewing the documents I needed to sign I found this for Tastyworks:
"SIPC Protection. As a member of the Securities Investor Protection Corporation (SIPC), funds are available to meet customer claims up to a ceiling of $500,000, including a maximum of $250,000 for cash claims. For additional information regarding SIPC coverage, including a brochure, please contact SIPC at (202) 371-8300 or visit www.sipc.org. Apex has purchased an additional insurance policy through a group of London Underwriters (with Lloyd's of London Syndicates as the Lead Underwriter) to supplement SIPC protection. This additional insurance policy becomes available to customers in the event that SIPC limits are exhausted and provides protection for securities and cash up to certain limits. Similar to SIPC protection, this additional insurance does not protect against a loss in the market value of securities."

In my opinion, this is how a serious broker should treat its clients, by purchasing extra insurance, especially if it's not a member of SIPC! I will most probably move my IB portfolio to TastyWorks.
sean.mcgrath
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Re: Brexit Planning message from IB to EU customers

Post by sean.mcgrath »

HoldMyBeer777 wrote: Mon Dec 21, 2020 2:12 pm In my opinion, this is how a serious broker should treat its clients, by purchasing extra insurance, especially if it's not a member of SIPC! I will most probably move my IB portfolio to TastyWorks.
Interesting. Thanks for the info, Beer -- do keep us updated.
AlohaJoe
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Re: Brexit Planning message from IB to EU customers

Post by AlohaJoe »

steve1209 wrote: Sun Dec 20, 2020 9:54 am Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
What makes you think Hungary has enough money to cover the case of IBKR failing?

Total government spending in Hungary is $66 billion. IBKR has $230 billion in AUM. Hungary can't in any way shape or form bailout investors if IBKR collapses. The IB Hungary guarantee is worthless.
TedSwippet
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Re: Brexit Planning message from IB to EU customers

Post by TedSwippet »

AlohaJoe wrote: Tue Dec 22, 2020 2:45 am
steve1209 wrote: Sun Dec 20, 2020 9:54 am Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
What makes you think Hungary has enough money to cover the case of IBKR failing?

Total government spending in Hungary is $66 billion. IBKR has $230 billion in AUM. Hungary can't in any way shape or form bailout investors if IBKR collapses. The IB Hungary guarantee is worthless.
This doesn't look like a meaningful comparison. IBKR's assets under management is $232 billion worldwide. Most of this will be outside IBKR Hungary. Why would you expect Hungary alone to be able to bailout every IBKR investor worldwide?

Also, the entire $232 billion, or whatever portion of that is held in Hungary, would only need covering if the whole of IBKR turned out to be nothing more than a facade for massive Madoff-like fraud with absolutely no actual underlying assets. I suppose that could be the case, but it seems about as likely as the same being true of Vanguard.
AlohaJoe
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Re: Brexit Planning message from IB to EU customers

Post by AlohaJoe »

TedSwippet wrote: Tue Dec 22, 2020 3:21 am
AlohaJoe wrote: Tue Dec 22, 2020 2:45 am
steve1209 wrote: Sun Dec 20, 2020 9:54 am Are you concern about this? "IB Hungary covers 100k on assets losses but IB Ireland just 20k??"
What makes you think Hungary has enough money to cover the case of IBKR failing?

Total government spending in Hungary is $66 billion. IBKR has $230 billion in AUM. Hungary can't in any way shape or form bailout investors if IBKR collapses. The IB Hungary guarantee is worthless.
This doesn't look like a meaningful comparison. IBKR's assets under management is $232 billion worldwide. Most of this will be outside IBKR Hungary. Why would you expect Hungary alone to be able to bailout every IBKR investor worldwide?
Yes, and Hungary isn't going to spend anything like $66 billion. That would require them to increase public debt by 60x. My point was to illustrate the scale involved. Hungary isn't likely to spend more than a $100 million or so in a situation like this. Even that would result in increasing public debt by 10% just to bail out foreigners.

How many governments are really going to follow through on that? "We're raising your taxes next year to payback rich Europeans who were invested in a US brokerage." And this is Hungary, led by the anti-Euroepan Fidesz party.

How far is $100 million going to go anyway? That means only 1,000 customers are covered at $100,000 each. Increase it to $500 million, destroying Hungary's budget and you're still only at 5,000 customers.
Also, the entire $232 billion, or whatever portion of that is held in Hungary, would only need covering if the whole of IBKR turned out to be nothing more than a facade for massive Madoff-like fraud with absolutely no actual underlying assets. I suppose that could be the case, but it seems about as likely as the same being true of Vanguard.
I agree with you that the whole scenario is ridiculous. But remember the starting point of this subthread. People are starting with the assumption that IBKR has committed a fraud larger than Madoff -- that's why $20,000 per customer isn't enough to make everyone solvent. The Madoff scheme only resulted in $21,000 per customer lost. So the starting assumption -- which I think is crazy -- is that IBKR is by far the largest fraud in history and that's why $20,000 per customer guarantee isn't enough.
TedSwippet
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Re: Brexit Planning message from IB to EU customers

Post by TedSwippet »

AlohaJoe wrote: Tue Dec 22, 2020 3:40 am ...
I agree with you that the whole scenario is ridiculous. But remember the starting point of this subthread. People are starting with the assumption that IBKR has committed a fraud larger than Madoff -- that's why $20,000 per customer isn't enough to make everyone solvent. The Madoff scheme only resulted in $21,000 per customer lost. So the starting assumption -- which I think is crazy -- is that IBKR is by far the largest fraud in history and that's why $20,000 per customer guarantee isn't enough.
So, in a nutshell, IBKR Hungary failure guarantees -- and perhaps for that matter, IBKR broker failure guarantees in most if not all other countries -- are utterly and completely insufficient to cover investors in full, but this insufficiency doesn't matter because the chance of a guarantee being needed beyond the amount available is vanishingly small?

Probably a reasonable stance. Personally, I'm wildly over the UK FSCS protection limit on my investments (pension, ISA, trading accounts) and I don't lose any sleep on this at all. I do however make it a policy to stay below the limit for individual banks, but that's a different thing.

Might IBKR turn out to be some fly-by-night shady outfit that is not at all what it appears to be? Superficially that seems completely implausible. However, given that the US has a bit of a track record of past large and visible regulatory failures -- Madoff, Enron, etc -- it's understandable that some folk might worry about this anyway. The big question is, what proportion of ones assets in IBKR are really at risk from broker fraud? Almost certainly less than 100%, but how much less? Very hard to put a number on that.
AlohaJoe
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Re: Brexit Planning message from IB to EU customers

Post by AlohaJoe »

TedSwippet wrote: Tue Dec 22, 2020 4:49 am So, in a nutshell, IBKR Hungary failure guarantees -- and perhaps for that matter, IBKR broker failure guarantees in most if not all other countries -- are utterly and completely insufficient to cover investors in full, but this insufficiency doesn't matter because the chance of a guarantee being needed beyond the amount available is vanishingly small?
Yes, that's my position. The real power of something SIPC or FSCS is there's a clear path to an experienced trustee to quickly step in. And here I think you want to have a "powerful" jurisdiction behind your back, regardless of what explicit guarantees they've made. US would be best with UK and China close behind. On that spectrum, I'd much rather have Irish financial regulators working on my behalf than Hungarian ones.

The Madoff case is instructive. The SIPC convinced feeder companies way outside of US jurisdiction to willingly give backs hundreds of millions of dollars to Madoff clients. The SIPC trustee hasn't made those negotiations public record but I'm pretty sure they go something like, "I know you don't legally have to do this but I work for the US government and we'll make your life a living hell for the next 50 years if you don't meet us at least halfway here."
glorat
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Re: Brexit Planning message from IB to EU customers

Post by glorat »

Laurizas wrote: Sun Dec 20, 2020 3:28 am
Bogle1984 wrote: Fri Dec 18, 2020 5:13 am Net assets of IB are above 8,5 billion $ US, Rimpfl says. So in his opinion an insolvency of IB seems not to be a risk.
Which IB has assets above 8,5 billion $ US? IB LLC? IBUK? IBIE or IBCE are separate legal entities, they do not have so many assets and IB LLC is not legally obligated to cover their debts.
If I my offer some accounting 101 on financial statements and insolvency.

A company maintains a balance sheet of assets-liabilities=net equity. IB indeed has plenty of assets and net positive equity. That means the company is expected to be valuable. In general, we might expect IB to be profitable so the company will continue to have value ( to its shareholders)

Insolvency relates to whether the company is able to meets is liabilities when they occur so is more about cashflow. If it can't pay its debts or pay its bills, that is when a company goes insolvent.

Assets/liabilities/profits are very distinct from cashflow and solvency. It is well known that many profitable companies holding plenty of assets can become insolvent. For example, COVID can cause many companies to go bust because they are holding large amounts of stock they can't sell to then pay bank loans... even though that stock has value and the company has always made a profit.

One interesting case is that of regulated banks since the financial crisis. Banks have been forced to hold huge amounts of liquid capital to ensure they have free cashflow in a crisis. The flipside is that hugely hits their profitability because they must retain the capital rather than make profit of it.

In the case of IB, the more useful stat is the amount of liquid capital they hold to deal with unfortunate events that need cash (e.g. the OIL incident). The last I checked, IB LLC had huge amounts of liquid capital and I therefore had full confidence they would not go bust.

Caveat: I'll entirely avoid the topic of segregated assets out of keeping things simple
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

I wonder if declining the migration for now and waiting it out is also a good route. If we are allowed to switch at any time after January 1st to the new European entities for free, then I see no harm in wait and see strategy at this point.
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

Is opening an account with TradeStation Global a workaround? I now they are linked to IB, but if TradeStation has the SIPC protection, then would not that be a viable option?
Laurizas
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Re: Brexit Planning message from IB to EU customers

Post by Laurizas »

I have heard that right now TradeStation Global does not accept new clients.
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

OK, I keep looking for IB alternatives with higher protection. So far I was able to find some brokers which sound promising to me (source: https://brokerchooser.com/compare-brokerage?product=etf):

US-based with SIPC protection of 500k USD:
- SogoTrade
- Firstrade
- Zacks Trade

Canada-based with 1 million CAD protection:
- Questrade

Europe-based with 100k for cash and 20k for securities protection:
- Flatex
- Saxo
- other German ones but with even higher fees

To be honest, I never heard of most of them due to IB ruling them all for a long time. Now that the IBUK is gone, I am seriously thinking about the US-based brokers mentioned above. Does anyone have any experience with any of them and the ability to buy Irish-domiciled ETFs -- the usual suspects mentioned here on the forum?
Last edited by bogle_man on Sun Jan 03, 2021 4:41 am, edited 1 time in total.
Laurizas
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Re: Brexit Planning message from IB to EU customers

Post by Laurizas »

I know someone who uses Saxo, they charge 0,12 % per year custody fee.
mh199
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Re: Brexit Planning message from IB to EU customers

Post by mh199 »

Hello,

I have currently chatted with an IBUK representative.

Here are some useful things:
To clear up, if I you don't transfer by 31.12.2020, your assets WILL NOT BE LIQUIDATED, as some folks claim in older posts(it really got me scared since I only got to this issue today). I verified it with IBUK twice(call& chat). Even thought the FAQ page for transfer from IBUK to IBLUX says it, but the one from IBUK to IBCE doesn't(only your account will be frozen until transfer).
There is no deadline for transfer.


According to the support staff:
" IBCE or IBIE cannot become bankrupt separately without the whole IB group and all our entities-when it comes to the protections Issue. Unless IB group is an Enron type scam or worldwide capitalism fails completely and they bankrupt." "perhaps" it's not such a big issue.

"Most of our assets are separately segregated between all our entities, held in USA since we are US broker, for CE Hungarian bank will be used only to keep forints there."

However, I am from Slovakia and I've been told I can choose between IBIE or IBCE. They told me if you want to transfer to IBLUX, you need to have at least 1M USD on the balance.

I currently don't have a better plan or time to be researching brokers all over again(I only invest long-term, don't trade).
Honestly, I know how messed up Hungary is, so the 100K eur protection, while
higher than 20K in Ireland, seems less likely to occur anyways. But, I don't know that much about Ireland on the other hand.

Would you recommend picking IBIE or IBCE and why?
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

mh199 wrote: Thu Dec 31, 2020 7:59 am
According to the support staff:
" IBCE or IBIE cannot become bankrupt separately without the whole IB group and all our entities-when it comes to the protections Issue. Unless IB group is an Enron type scam or worldwide capitalism fails completely and they bankrupt." "perhaps" it's not such a big issue.

"Most of our assets are separately segregated between all our entities, held in USA since we are US broker, for CE Hungarian bank will be used only to keep forints there."
That's quite a reassuring statement. This is definitely the thing we want to hear, but I am still on the conservative side. They never mention this on paper. All their FAQs clearly state the protection to be bound to the bank/supervisory institution in the country the entity belongs to. No where in the documentation do they mention the support of the IB US; they are all independent entities the way I read it. In contrast, when people were opening IBUK in the past, the papers clearly stated the SIPC protection as part of the IB US...
Laurizas
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Location: Lithuania

Re: Brexit Planning message from IB to EU customers

Post by Laurizas »

bogle_man wrote: Thu Dec 31, 2020 8:45 am That's quite a reassuring statement. This is definitely the thing we want to hear, but I am still on the conservative side. They never mention this on paper.
I guess legally IB LLC is not obligated to help IBCE or IBIE to avoid bankruptcy but if IB LLC does not do that, if they do not help , then well, all the reputation of IB is lost for a long time. Such actions also could have a negative impact on IB stock price, so my guess would be that in such instance (bankruptcy of IBCE or IBIE) IB LLC would be willing to help.
vstariradev
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Re: Brexit Planning message from IB to EU customers

Post by vstariradev »

Here’s what I got in an email early this morning. Hopefully it helps to clear up the situation more.
Please note that if you do not accept the Proposed Transfer, IBUK will not be able to fully service your account, as of 17, January 2021, which will include a restriction limiting you to position-reducing or closing orders.
I guess this could mean securities in a non-migrated account will remain protected as before but you can only sell them. If you’d like to purchase more positions, you’re welcome to open a separate account.

My two cents on the matter are that I plan to migrate to IBIE because I don’t see foul play on such scale being likely at IBKR. It’s the broker I least expect this to happen to.
oldchap
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Re: Brexit Planning message from IB to EU customers

Post by oldchap »

Hello all,

Would you happen to have an exhaustive list of all the SIPC protected broker giving access to LSE ?
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
bogle_man
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Re: Brexit Planning message from IB to EU customers

Post by bogle_man »

I have only found one, Zacks Trade. But their commissions are on the high side:
https://www.zackstrade.com/commissions- ... a2db6-6f50
Last edited by bogle_man on Sun Jan 03, 2021 2:04 am, edited 1 time in total.
oldchap
Posts: 245
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Re: Brexit Planning message from IB to EU customers

Post by oldchap »

bogle_man wrote: Sat Jan 02, 2021 10:24 am I have only found one, Zack Trade. But their commissions are on the high side:
https://www.zackstrade.com/commissions- ... a2db6-6f50
Thanks bogle_man !

How about the below 2 ?
- SogoTrade
- Firstrade
NRA, LSE-based ETFs only | 1-fund portfolio powered by Vanguard: 120% VWRA | Following the Lifecycle Investing Strategy
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