Thanks for sharing this Julian.
A bit scary indeed, was always convinced IB was industry top standard.
Eager to hear what the boss would have to say.
Will investigate on my own too.
Any suggestions brokers for european chaps?
Cheers

Thanks for raising this Julian – as a UK resident Brit this has got me thinking as I have all my eggs in the IB basket. I’m thinking that the most easily achievable way to achieve diversification will be to identify an alternative broker for those strategies that don’t require an API.

Wow. That was something!
I was actually amazed by how little documentation they required from me. I filled up a (digital) form and entered my Tax ID number and that was it. Got my account in two days. My bank transfer was more troublesome than actually opening the account with IB. The article does seem concerning though.

One question – Isn’t there a securities insurance of like 500k? and cash insurance too?

This is from the Australian IB website ………………………..

How We Handle Client Assets

Client money is segregated in special bank accounts (Client Money Accounts held in Trust with Authorised Deposit-taking Institutions (“ADI”)) which are designated for the exclusive benefit of Australian clients of IBKR. This segregation is a requirement of Australian Financial Services License (“AFSL”) holders and, Interactive Brokers Australia (“IBKR Australia”), as an AFSL holder, fully complies with these principles.

By properly segregating the client’s assets, if no money or stock is borrowed and no futures positions are held by the client, then the client’s assets are available to be returned to the client in the event of a default by or bankruptcy of the broker.

Client money is NOT invested by IBKR Australia, and is at all times held in these Client Money Accounts held in Trust. In addition, IBKR Australia does NOT hold any excess amount of its own money in these Client Money Accounts held in Trust.