Customers' money safety

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.

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.

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).

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.