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> "IB spreads its assets in segregated accounts for the benefit of
>customers
My broker also users a segragated account (this means the funds
nominally belong to the depositors except when the broker has the
right to make margin call transfers etc) .... theoretically the funds
are not their asset and can't be called upon in the event of cash
flow problems or bankruptcy.
Note:
- the segregated account is a group account (for all depositors) and
is in 'trust' in a broker owned account (in their name not yours!)
- you have no account statements, authority or access etc (only the
access that the broker gives you, which is a monthly statement of
your nominal portion)
- the affairs are contacted between one company (broker) and the bank
(company) in private
- there is no third party TRUSTEE, no scrutiny, no appeal mechanism
etc
- the internal mechanism that exists is not 'on the record'
- you can't even talk to the bank about your 'segragated' account
- my broker has a third party to act as appellant but they are a
company, hired by my broker
- in the event of failure account holders would have to make a class
action, involving 'joint' account holders, spread across the globe
and claiming against a company registered in another country!
--- In amibroker@xxxxxxxxxxxxxxx, "Tomasz Janeczko" <groups@xxx>
wrote:
>
> Hello,
>
> Interactive Brokers seems to be on conservative side. I was
concerned a bit in March 2008 but since then
> it looks like they have spread client funds accross six banks.
> See Interactive Brokers statement saying that as of September 2008
funds are no longer in City only.
>
>
> See:
>
http://individuals.interactivebrokers.com/en/general/education/faqs/sa
fetyFAQ.php?ib_entity=llc#3
>
> Quote
> "IB spreads its assets in segregated accounts for the benefit of
customers across at least six of the largest banks (as of September
2008). IB's customer segregation account at Citibank is used as
the "conduit" account for deposits and withdrawals but funds are then
spread across these federally-approved depositories."
>
> Best regards,
> Tomasz Janeczko
> amibroker.com
> ----- Original Message -----
> From: Steve Dugas
> To: amibroker@xxxxxxxxxxxxxxx
> Sent: Monday, February 09, 2009 5:50 PM
> Subject: Re: [amibroker] Re: Broker and bank reliability: leave
trading?
>
>
> Hi - I was really worried about this stuff a few months ago when
the whole world started collapsing and did a bit of research. I
ended up distributing my funds better, I have it divided between 4
brokers now, a real PITA for trading but at least only 25% of the
funds are at risk with any one broker. Also ( for US traders ), I
looked for brokers with cash sweeps because in response to an email
from me, SIPC told me that they consider money in a MMF to
be "invested", and as such covered up to $500K, whereas straight cash
is only covered up to $100K. I am thinking that hopefully the MMF
crisis is over now, it seems people have stopped the run on them and
we have some gov't guarantees now... Also all brokers will point
out that they have purchased supplemental insurance that will cover
you up to $10M or whatever, but in the fine print this is subject to
an aggregate limit and it looks to me like that limit is much less
than their total deposits. Also I learned that the $100K coverage
for cash is only for cash which the evidence shows is intended for
*investing*, i.e. if you have been sitting in cash for a while, or
if you have funded a new account but haven't done any trading yet,
they might say that the evidence indicates that your main purpose is
just to earn interest, in which case your cash may not be covered at
all. I am definately no authority here but this is what I was told
by my brokers and by SIPC themselves, if anyone has a different
understanding I would love to hear it. Thanks!
>
> Steve
> ----- Original Message -----
> From: Carl Vanhaesendonck
> To: amibroker@xxxxxxxxxxxxxxx
> Sent: Monday, February 09, 2009 9:56 AM
> Subject: [amibroker] Re: Broker and bank reliability: leave
trading?
>
>
> Guys,
>
>
>
> I appreciate your time and suggestions responding to my post -
it is a bit clearer to me now that the real risk is (was?) in banks,
not in brokers.
>
> When I mentioned 1 M° USD insurance I was speaking of IB, not
the bankers. In France indeed it is up to 70,000 EUR, and in Belgium
100,000.
>
> Re my parent who lost his deposit: it was in Belgium, and at
Citibank. He is suing them because for unknown there the 100,000 USD
didn't apply. he is suying them with hundreds of other investors, it
is a grouped action.
>
> Nevertheless to come back to the risk being in banks,
notbrokers: what if the bank used by the broker goes bankrupt? Will
it really be indemnised when you see the billions of dollars of their
client deposit??
>
>
>
> Risky time, and you were right stating gold lingot in the
safebox of the bank is NOT insured :-(
>
>
>
> Thanks again,
>
> Carl
>
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