Client Protection - Strength and Security

Strength and Security

Strength and Security

Client Protection

Client Protection at Interactive Brokers Ireland

Interactive Brokers Ireland ("IBIE") takes a proactive approach to customer protection. IBIE determines the amount of cash and securities owed to customers daily and segregates funds for the exclusive benefit of customers in bank accounts correctly identified as client segregated accounts.

IBIE performs a reconciliation of customer money at least daily to ensure that customer monies are properly segregated from the IBIE’s own funds. Customer-owned, fully-paid securities are protected in accounts at depositories and custodians that are specifically identified for the exclusive benefit of customers. IBIE reconciles positions in securities owned by customers daily to ensure that these securities have been received at the depositories and custodians.

IBIE applies real-time risk margin requirements to customer accounts. If a customer is deemed to have insufficient assets to cover the risk of their open positions, IBIE typically will perform real-time liquidations of their positions to return the account to margin compliance.

IBIE's real-time risk margin requirement and protective liquidations minimise customers’ exposure to losses attributable to other customers’ trading, and the risk that customer losses pose to IBIE.

Another major benefit of doing business with IBIE is that it does not carry any materially significant proprietary inventory. IBIE does not make any directional bets and only holds proprietary inventory to facilitate client trading on the IBIE Systematic Internaliser and to facilitate client trading in certain OTC products. Two of the most significant bankruptcies of the past decade (Lehman Brothers and MF Global) were caused by the risk generated from proprietary holdings.

Since IBIE does not make proprietary bets, the risk of IBIE going bankrupt and customer funds being tied up in a liquidation is significantly reduced.

Finally, IBIE is not affiliated with a bank. This provides IBIE with a more stable platform for its customers should a market-wide crisis arise.

Since IBIE is not a bank, it is likely that customers' assets would be returned in a more timely fashion than for bank-owned entities..

Account Protection

Certain clients of Interactive Brokers Ireland Limited are protected by the Irish Investor Compensation Scheme ("ICS").

The ICS is intended to help private individuals and does not cover institutions and professional clients. Compensation under the ICS is limited to 90% of the amount lost, subject to a maximum of €20,000 to each investor. The coverage provides protection against the failure of the investment firm, not against loss of market value of financial products.

The ICS is administered by the Investor Compensation Company DAC ("ICCL"), which is an independent body set up under Ireland’s Investor Compensation Act, 1998. For more information about the ICS and answers to frequently asked questions (such as how ICS works, what is protected, how to file a claim, etc.), please refer to the following website:

Irish Investor Compensation Scheme

Or contact the Investor Compensation Company DAC at:

The Investor Compensation Company DAC
c/o Central Bank of Ireland
PO Box 11517
Spencer Dock, North Wall Quay Dublin 1, Ireland
Phone: +353 1 244 4485

Interactive Brokers Ireland Limited ("IBIE") custodies certain of your securities positions with its US affiliate, Interactive Brokers LLC ("IBLLC"), which is licensed by the US Securities & Exchange Commission and a member of the US Securities Investor Protection Corporation ("SIPC'). To the extent that your securities (or cash balances, to the extent they are acting as margin in support of a short stock or option position carried by IBLLC) are custodied at IBLLC, they are protected by SIPC for a maximum coverage of $500,000 (with a cash sublimit of $250,000) and under Interactive Brokers LLC's excess SIPC policy with certain underwriters at Lloyd's of London for up to an additional $30 million (with a cash sublimit of $900,000) subject to an aggregate limit of $150 million. Futures and options on futures are not covered. This coverage provides protection against failure of a broker-dealer, not against loss of market value of securities. In the unlikely event it should ever become necessary to assert a claim in a SIPC insolvency proceeding as a result of a failure of IBLLC, Interactive Brokers Ireland Limited will make the claim on your behalf.