Customers' money safety
in brokerage accounts
For many years of trading in the financial markets, the managers of Masters Trade understand that the main requirement for a broker is the complete safety of the client's funds and prompt withdrawal and deposit of funds from the trading account to the client's bank account.
Correct servicing of client funds is the responsibility of the brokerage company!
An investor or trader should not worry about the safety of his funds in his brokerage account, but calmly work in the markets. The client should choose a reliable broker who can ensure the safety. As our experience shows, clients of our company do not worry about the safety of their funds, because they have chosen the right broker and trust us.
All of our clients are backed by funds safeguards, account insurance and full capital protection for our broker, Interactive Brokers (IBKR). Our clients' money is stored and serviced by our broker, Interactive Brokers (IBKR). Our clients send money to Interactive Brokers (IBKR), the broker is responsible for the safety of the funds and only the broker sends money back to our clients.
Interactive Brokers is safer than a bank
Here are some of the reasons why our broker Interactive Brokers Group (IBG) is safer to store money than a bank:
Financial strength. The market capitalization of IBG LLC exceeds $ 32 billion and is constantly growing, and the net worth of IBG LLC is more than $ 10.01 billion, which exceeds the regulatory requirements by $ 6.2 billion. IBG LLC's annual net income before taxes exceeds $ 1.5 billion.
The credibility of the company. With over 1 million clients, the IBG broker is a public company with full financial statements, the broker's shares are listed on the NASDAQ stock exchange ticker IBKR. Interactive Brokers LLC has been rated 'A- / A-2' by Standard & Poor's, with a positive outlook. IBKR has been recognized many times as the best broker in the world by reputable independent experts and magazines.
The globality of the company. IBG is headquartered in Greenwich, Connecticut, and has offices in the United States, Switzerland, Canada, Hong Kong, United Kingdom, Australia, Hungary, Russia, Japan, India, China, Luxembourg, Singapore, Ireland and Estonia. IBG has 2,400+ employees and supports its clients in all languages.
Insurance and safety. IBG is under the supervision of the world's leading regulatory bodies , such as SEC, FINRA, NYSE, FCA and other regulatory bodies in the countries where the IBG office is open and a prerequisite is the presence of a national license of the regulator of the country where the office is located.
Each client account is held in accordance with the strict rules of the Securities Investor Protection Corporation. The amount of $ 500 corresponds to a sublimit of $ 250, the account is also insured by IBG - the London company Lloyd's for the amount of $ 30 million, where the sublimit is $ 900 thousand, taking into account the total level of $ 150 million. These guarantees protect the account of any client, as well as provide protection against broker-dealer failures, company ruin or bankruptcy.
Securities Investor Protection Corporation is a non-profit member of the financial markets corporation that oversees and monitors broker-dealers that are part of this company. So that you are confident in our guarantees, and can directly ask your questions about the work of SIPC, as well as the specifics of ensuring guarantees and much more, go to the following sites:
We trust only the best and therefore our partner in insurance is the world market leader Lloyd's in London.
Where are our clients' assets?
Our clients' money is held separately in bank or custody accounts that have been specifically set up for the sole benefit of IBKR clients. Protecting funds (the SEC uses the term "reserve" and the CFTC uses the term "segregation") is the primary focus of a securities and commodity broker. If properly separated from each other, assets can be immediately returned to clients in the event of insolvency or bankruptcy of the broker, if they do not include borrowed money or stocks or futures positions. Clients usually invest part of their funds in US Treasury securities and FDIC-insured bonds. While this is not prohibited by regulation, IBKR is not currently investing clients' finances in money market funds, given concerns about external public debt.
In addition, IBKR maintains its own funds in the aforementioned reserved and segregated accounts, so that more than the necessary amount of cash is available to protect the interests of clients.
Accounts without the ability to borrow cash or securities
Investments in securities are protected as follows:
Most of the funds are invested in US Treasury securities, including direct investments in short-term Treasury bills and repurchase agreements, which are collateralized by Treasury securities. These transactions are mediated by third parties through a third party clearing house (Fixed Income Clearing Corp. or "FICC"). The collateral remains in the possession of IBKR and is deposited with a custodian bank in an isolated reserve account for safekeeping, for the sole benefit of the client. Treasury securities can also be pledged to a clearing house if it becomes necessary to maintain margin levels on the client's options positions.
Customers' cash is held in reserved accounts on a net basis that takes into account both long positions and cash advances to other customers. As long as the IBKR client has an obligation to IBKR to repay the margin loan, the loan will be backed by shares at a rate of 140% of the loan amount. Credit security is ensured by IBKR's conservative approach to margin trading. Despite regulatory approval, IBKR does not authorize its clients to remedy any resulting margin shortfall within a few days. Instead, IBKR monitors margins in real time and automatically liquidates positions as needed to repay the loan. This practice helps to ensure compliance with margin requirements without jeopardizing the interests of IBKR and other clients.
Current SEC regulations require broker-dealers to carefully reconcile clients' cash balances and their securities register (a procedure known as "reserve counting") at least once a week to ensure that client funds are properly segregated from the broker's own funds. dealer.
Part of the funds is mainly deposited with major US banks in special reserve accounts, which are served solely for the benefit of IBKR customers. These deposits are distributed among several investment grade banks to prevent concentration of funds in any one institution. No bank holds more than 5% of IBKR's total customer funds in custody. IBKR has deposits with the following banks (this list is updated periodically at IBKR's discretion). Some banks that are partners or affiliates of foreign financial institutions are supervised by the Federal Reserve and the Office of the Comptroller of the Currency.
- Branch Banking and Trust Company
- Bank of America, N.A.
- Bank of the West
- Citibank, N.A.
- Fifth Third Bank
- HSBC Bank USA, N.A.
- JPMorgan Chase Bank, N.A.
- KeyBank National Association
- Manufacturers and Traders Trust Company (M&T Bank)
- Standard Chartered Bank
- SunTrust Bank
- The Bank of Nova Scotia
- US Bank, N.A.
To further protect our clients' assets, Interactive Brokers has been authorized by FINRA (Financial Institutions Regulatory Agency) to calculate and report the reserve on a daily basis rather than weekly. IBKR has begun calculating its client asset reserve on a daily basis, along with daily adjustments to the amount of stabilization funds. Monitoring the status of proprietary accounts and client reserves on a daily basis is another step in Interactive Brokers' mission to provide our clients with the most advanced level of protection.
Fully paid securities owned by customers are securely held in depositories and custodian banks solely in the interests of the customers themselves. IBKR checks clients' securities positions every day to ensure that the relevant securities have been deposited with the correct custodian or custodian bank.
Commodities trading accounts
Commodity investments are protected as follows:
Most of the funds are invested in US Treasury securities held by a custodian bank in an isolated safekeeping account held solely for the benefit of customers.
A portion of the funds is deposited in short-term US Treasury securities and pledged to clearing houses to support futures and options futures margins.
The other part is kept with banks or brokers engaged in the clearing of commodity transactions in segregated accounts, which are maintained solely for the purpose of maintaining the margin requirements presented to the client.
According to the legal regulations governing commodity transactions, client funds are protected in real time. IBKR carefully reconciles customer equity on a daily basis to ensure that customer funds are adequately segregated from the company's equity. A report on the status of the client's reserve is sent to the supervisory authorities every day.
Please click the link below to view the Interactive Brokers Firm Special Notice as prescribed by CFTC Rule 1.55 (k).
Margin accounts for securities trading
In accordance with the requirements of the regulatory authorities, IBKR has the right to provide loans for the purchase of securities up to 140% of the value of the pledged shares held in the client's IBKR account. In simple terms, IBKR borrows money from a third party (such as a bank or broker-dealer) using the client's shares as collateral and lends the funds to the client to fund the margin purchase. Typically IBKR lends only a small portion of the shares it is allowed to lend.
We are not resting on our laurels and in order to improve the safety of your funds have received approval from FINRA (the financial regulator in the industry) to carry out and report reserve calculations and balances every day. IBG itself initiated the daily monitoring, along with the day-to-day adjustments of the funds that were set aside for our clients. Even the very fact of initiating, not a weekly, but a daily check, testifies to the fact that we confidently ensure the safety of client funds.
The IBG LLC brokerage / operating platform is audited annually by independent third party auditors based on a Systems and Organization Controls (SOC) plan. An audit of the IBG LLC brokerage platform includes an assessment of security, availability, processing integrity and confidentiality in accordance with the trust principles of SOC 2 and 3 reports.
With the help of an independent certified accountant, IBG LLC generates SOC 1 (Type 2) and SOC 3 reports to provide customers and contractors with information about the processes for the provision and control of the company's services.
Typically, a SOC 1 report can be obtained as follows:
Customer auditors - submit an inquiry via www.confirmation.com
Customers - contact your sales agent
The SOC 3 report is publicly available. www.interactivebrokers.com/download/IB_SOC_report_3.pdf
- Understanding SOC 1, 2, and 3 Reports
The American Institute of Certified Public Accountants (AICPA) has developed a plan called Systems and Operations Control (SOC), a standard by which the effectiveness of operational controls is guaranteed. It is similar to the International Standard on Assurance Engagements (ISAE) applicable to international service organizations.
The SOC audit is divided into two categories, SOC 1 and SOC 2 & 3, applicable to IBG LLC brokerage services.
A SOC 1 review for auditing firms that audits financial statements examines the appropriateness and effectiveness of IBG's internal control systems.
The SOC 2 review evaluates the IBG brokerage platform and its divisions based on the structure and operational effectiveness of the company's controls, which are subject to the current AICPA Trust Services Principles and Criteria.
Upon completion of the SOC 1 or SOC 2 review, the auditor expresses his opinion in a SOC 1 (Type 2) or SOC 2 (Type 2) report, where he describes the brokerage activities and platforms of IBG, and also determines how objectively IBG characterizes its control systems. It also assesses whether the IBG control systems are optimally designed, whether they functioned on a specific date, and how effective they have been over a specified period of time.
A SOC 3 report, a shortened version of a SOC 2 report (type 2), is generated, allowing IBG to provide assurances about its control systems without disclosing details of their design.
The Auditing Standards Statement and the International Standards for Assurance of Information (ISAE) are the standards within which auditing is carried out and which serve as the basis for SOC 1, 2 & 3 reports.
Licenses and regulations Interactive Brokers
- United States
- Interactive Brokers LLC
Interactive Brokers LLC is a member of NYSE FINRA SIPC and is regulated in Hong Kong by the SFC and in Australia by ASIC (AFSL 245574, ARBN 091191141).
- Interactive Brokers Canada Inc.
Interactive Brokers Canada Inc. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and Member - Canadian Investor Protection Fund. Interactive Brokers Canada Inc. is an execution-only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities or derivatives.
- United Kingdom
- Interactive Brokers (U.K.) Limited
Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Conduct Authority. FCA Register Entry Number 208159. Products are only covered by the UK FSCS in limited circumstances.
Your account is cleared and carried by Interactive Brokers LLC and for certain limited products by Interactive Brokers (U.K.) Limited. Interactive Brokers LLC is regulated by the US SEC and CFTC and is a member of the SIPC (www.sipc.org) compensation scheme. Interactive Brokers (U.K.) Limited is authorised and regulated by the FCA and regulated products are covered by the UK FSCS.
Certain financial products are not suitable for all investors. Customers should read the relevant risk warnings before investing. Your capital is at risk and your losses may exceed the value of your original investment.
- Interactive Brokers Luxembourg SARL
Is a member of The Luxembourg investor compensation scheme (Système d’indemnisation des investisseurs, SIIL) and regulated by the Commission de Surveillance du Secteur Financier (CSSF).
- Interactive Brokers Ireland Limited
Is regulated by the Central Bank of Ireland (CBI) and is a member of the Irish Investor Compensation Scheme (ICS).
- Interactive Brokers Central Europe Zrt.
Is licensed and regulated by the Central Bank of Hungary (Magyar Nemzeti Bank) under no. H-EN-III-623/2020. Registering Court: Company Registry of the Metropolitan General Court.
- Interactive Brokers Australia Pty. Ltd.
Interactive Brokers Australia Pty. Ltd. is licensed and regulated by the Australian Securities and Investments Commission (AFSL: 453554), is a participant of ASX, ASX 24 and Chi-X and is a member of the Australian Financial Complaints Authority (member number 38492).
- Interactive Brokers Hong Kong Limited
Interactive Brokers Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission and is a member of the SEHK and the HKFE.
- Interactive Brokers Singapore Pte. Ltd.
Interactive Brokers Australia Pty. Ltd. is licensed and regulated by the Monetary Authority of Singapore (Licence No. CMS100917).