I'm trying to transfer assets from my account at Fidelity via ACATS but can't find that broker on your dropdown list.

Overview: 

Fidelity Investments uses its National Financial Services affiliate for certain clearing, custody and brokerage services including ACATS transfers.  To initiate a full or partial ACATS transfer from a Fidelity account, select  National Financial Services (DTCC No 0226) from the drop down broker list.

Are the funds I deposited today considered for buying power calculations?

Overview: 

The answer is yes.  To calculate buying power IB compares Current Equity with Loan Value to Previous Day Equity with Loan Value.  Whichever figure is lesser is used.  From the lesser of these two figures, the Initial Margin Requirement on the positions you currently hold in the account is subtracted.  The difference is then multiplied by the current leverage amount (at present 4:1), which results in your intraday buying power.  Funds deposited today are now considered as part of Previous Day ELV. 

Please understand that funds deposited today will not be considered until they have cleared all appropriate funds and banking channels and are officially in the account. 

Also note that this calculation of buying power applies to Regulation T margin type accounts and not to Portfolio Margin type accounts. 

The Previous Day ELV check is done once an account is labeled as a "Pattern Day Trader" account.  This occurs when the account has completed 4 day trades in a 5 day period.  If the account is not labeled as a PDT, then the Previous Day ELV check doesn't apply. 

Background: 

The equation used is:

 

((Lesser of: Equity With Loan Value or Previous Day Equity With Loan Value) - Initial Margin)*4 for accounts labeled as PDT accounts.

(Equity With Loan Value - Initial Margin)*4 for accounts not labeled as PDT accounts.

IRA: Understanding Rollovers

Interactive Brokers offers three IRA account types for U.S. persons:  Traditional IRA, Roth IRA, and Simplified Employee Pension plan IRA (a.k.a. SEP-IRA).  Rollover transaction options may be available into or out of each account type.

The term IRA Rollover refers to several different movements of funds between U.S. retirement accounts.  Select from the list below for a brief description of each rollover type available, as well as the their guidelines.

 

IRA to IRA Rollover

Direct Rollover

IRA to Employer Sponsored Retirement Plan Rollover

12-Month Rule

60-Day Period

 

Rollover Types

1. IRA to IRA Rollover

Funds withdrawn from an IRA and re-deposited into an IRA within 60 days may be eligible for treatment as a 60-day rollover contribution.  If eligible, this movement of funds may qualify as an IRA withdrawal of funds without any penalty or taxes.   

Tax Reporting - IB will report the withdrawal of funds as an IRA distribution and the re-deposit of funds as an IRA rollover contribution to the IRS.   The IRS receives Form 5498 (IRA Contributions) and Form 1099-R (IRA Distributions).  US investors do not include the Form 5498 with their tax filing, but do include the 1099-R.  Click 2012 Tax Reporting for details.

2. Direct Rollover

Funds received or withdrawn from an employer-sponsored retirement plan and deposited directly into an IRA.  The 20% tax withholding of funds by the plan sponsor is waived when funds are rolled directly into an IRA. 

Tax Reporting - IB will report the deposit of funds from an employer-sponsored retirement plan as an IRA rollover contribution to the IRS.  The IRS receives Form 5498 (IRA Contributions).   US investors do not include the Form 5498 with their tax filing.  Click 2012 Tax Reporting for details.

3. IRA to Employer Sponsored Retirement Plan Rollover

Funds moved directly from an IRA into an employer's retirement plan are deemed rollover contributions.  Not all retirement plans accept rollovers from IRAs.  Investors should consult the plan sponsor to determine eligibility.

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Limitations & Guidelines 

12-Month Rule

Distributed funds from an IRA may be rolled into another IRA only once every 12-month period.  The rule applies to funds withdrawn from each separate IRA.  The 12-month period begins the date funds are received, not on the date funds are deposited into another IRA. (See IRS Publication 590 for limited exceptions to the rule.)

60-Day Period

Distributions from an IRA or Employer Sponsored Retirement plan may remain eligible for the tax-free rollover treatment only when contributed to another qualified plan within 60 days of receipt.  Generally, funds re-deposited outside of 60 days are not tax-free.  The withdrawal of funds is taxable. The deposit into another IRA is treated as a regular contribution.  (See IRS Publication 590 for limited exceptions to the rule.)

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Click here to return to the Retirement Account Resource page.

Disclaimer:  IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a q

Will IB delay liquidation while I deposit funds in my account?

Overview: 

IB's margin compliance policy does not allow for transfers or other deposits if there is a margin violation/deficit in the account.  In the case of a margin violation/deficit, the account in deficit is immediately subject to liquidation.  Automated liquidations are accomplished with market orders, and any/all positions in the account can be liquidated.   There are cases where, due to specific market conditions, a deficit is better addressed via a manual liquidation.

Funds deposited or wired into the account are not taken into consideration from a risk standpoint until those funds have cleared all the appropriate funds and banking channels and are officially in the account.  The liquidation system is automated and programmed to act immediately if there is a margin violation/deficit. 

Note for Prime Clients: Executing away is not a means to resolve real time deficits as away trades will not be taken into consideration for beneficial margin purposes until 9 pm ET on Trade Date or when the trades have been reported and matched with external confirms, whichever is later. Trading away for expiring options, on expiration day, is also discouraged due to the potential for late or inaccurate reporting which can lead to erroneous margin calculations or incorrect exercise and assignment activity. Clients who wish to trade expiring options on expiration day and away from IB, must load their FTP file no later than 2:50 pm ET, and do so at their own risk.

Why does the system not recognize my SWIFT code?

Overview: 

S.W.I.F.T  stands for Society for Worldwide Interbank Financial Telecommunication.  It is a non-profit organization comprised of member financial institutions.

Only SWIFT codes which are part of the SWIFT network are recognized as SWIFT codes.

Why does IB place a hold on the funds deposited via check when my bank has already debited the funds from my account?

Overview: 

 

IB, like any bank customer, is subject to the hold periods that banks by regulation are allowed to place upon check deposits. While these regulations generally provide for full availability to be provided within 2 to 5 business days, banks in certain instances may not make the funds available until the 11th business day, and a key factor in determining the availability timeframe is whether the check is drawn upon an institution whose Federal Reserve check processing office is local relevant to IB’s bank (which is determined based upon the routing transit number or ABA bank code listed on the check).  As it is not operationally feasible to distinguish and track the clearance of individual checks given a large and geographically diverse client base, IB has opted to use a uniform hold period of 7 business days for check deposits (with funds made available on the 8th business day).  This timeframe had been selected based upon a review of historical data which suggests that the risk of non-payment of funds to be sufficiently minimal after that period.

 

To minimize any delays associated with the receipt and crediting of deposits, IB strongly recommends that clients deposit funds via wire transfer as this process introduces few of the credit risks or operational overhead typically associated with checks.  In addition, funds deposited in this manner are immediately credited to your account upon arrival and are not subject to any processing fee by IB.

Why do certain cash deposit and withdrawal requests require that an instruction be created while others do not?

Overview: 

 

Whether or not an instruction is required is a function of both the transaction type (i.e., deposit or withdrawal) and its underlying method (i.,e. check, ACH initiated at IB, ACH initiated at sending bank or wire).  In general, if the deposit method dictates that IB pull funds directly from the client’s account or if the withdrawal method dictates that IB push funds directly to the client’s account, an instruction will be required in order to obtain the necessary account specific information and authorization to act.  Outlined in the chart below are the possible scenarios.

 

 

 

INSTRUCTION REQUIREMENTS BY TRANSACTION TYPE & METHOD (Yes/No)

 

Check

ACH – at Bank

ACH – at IB

EFT

Wire

Deposit

No

No

Yes

Yes

No

Withdrawal

No

N/A

Yes if instruction is  created as  Debit/Credit, no  if  Credit only

Yes

Yes

 

How do I transfer my US securities positions from my current broker to IB?

Overview: 

Broker to broker transfers for US securities are conducted via a process known as the Automated Customer Account Transfer Service or ACATS.  This process generally takes between 4 to 8 business days to complete in order to accommodate the verification of the transferring account and positions. The request is always initiated via the receiving broker (IB in this case) and can be prompted by following the steps below.

1.      Log into Account Management and select the Funds Transfer and then Position Transfers menu options.

2.      From the Transfer Method drop-down list select ‘ACATS'.

3.      From the Type drop-down list select either ‘Full’ or ‘Partial'.

a.       Note that the ‘Full’ election does not require that you specify any assets as an attempt will be made to transfer your account in its entirety.  Account holders should note, however, that certain positions may not be on the list of securities eligible to trade at IB and others, while transferable, may be subject to a house margin requirement higher than that of the delivering broker.  In the event IB receives an asset list from the delivering broker which includes ineligible positions or the aggregate of the positions transferred are such that a margin deficit would exist were the transfer to occur, IB will attempt to contact you to remedy the situation within the allocated time frame after which an automatic reject of the full transfer would take effect.  Account holders may wish to minimize potential delays or problems associated with a ‘Full’ transfer request by verifying security eligibility and margin requirements via the Contract Search link located at the upper right hand corner of the IB homepage prior to initiating the transfer.

b.      Note that the ‘Partial’ election will require that you specify the positions you wish to transfer on step 5.

4.      From the Source drop-down list select the delivering broker.  Note that certain brokers maintain multiple Participant account numbers with DTCC and account holders are encouraged to confirm with their delivering broker the account number to be associated with the transfer request.

5.      On the Deposit & Transfers/ACATS Request form enter the account number as reflected on your delivering broker account statement and respond to questions regarding the existence of a margin loan, short positions and option positions. Note that certain short stock positions may not be transferable if IB is unable to locate and borrow.  In the event of a ‘Partial’ election, you will need to provide additional detail (product identification, number of shares/contracts, long/short designation) as to the stock, option, mutual fund, bond or cash position you wish to transfer.

6.      Provide electronic signature authorizing the transfer.

 

Please note that brokers generally freeze the account during the transfer period to ensure an accurate snapshot of assets to transfer and may restrict the transfer of option positions during the week prior to expiration. You may wish to check with the delivering broker to verify their policy in this regard. In addition, please note if your IB account is currently maintaining positions on margin, any cash withdrawals or adverse market moves could increase the likelihood that your account falls out of margin compliance during the transfer period which may delay or prevent completion of the transfer. 

 

IMPORTANT NOTICE

Applicants may meet the initial account funding requirement through the transfer of securities positions and/or cash via the ACATS system.

Does IB accept third party deposits?

Overview: 

 

Third party deposits are defined as those deposits which originate from or are drawn upon an account at a financial institution which is titled in a name other than that of the receiving IB account holder(s).  Third party deposits also include check deposits made payable to the IB account holder and endorsed over to IB.

 

As third party transfers have historically been viewed by the financial services industry and its regulators as being highly susceptible to acts of fraud and money laundering, they are strongly discouraged and, in most instances, rejected by IB. 

 

In the case of deposits made by check, IB will not accept any checks which require endorsement to IB and will only accept check deposits having IB as the direct payee where the party who writes the check either:

 

1. Has the same last name as the individual account holder (e.g.; spouse or, child); or

 

2. In the case of organization/institution accounts, maintains an affiliation with the account (e.g.; officer, trader or owners).

 

In the case of electronic transfers (Wire, ACH or EFT) account holders should note that IB reserves the right to reject any third party deposit and those of a large dollar amount or frequent in nature are most susceptible to compliance inquiry and/or rejection. 

 

IMPORTANT NOTICE

Account holders who are uncertain as to whether a particular check qualifies for acceptance should contact IB’s Funds & Banking Department for clarification prior to remitting the check.

Does a deposit subject to a "Credit Hold” accrue credit interest during the hold period?

Overview: 

The answer depends upon the method of deposit.  In the case of deposits made via ACH, any interest accrues from the date the deposit arrives through the four business day credit hold period after which it is credited to the account.  In the case of check deposits other than Bank Checks, no interest is accrued during the credit hold period.  Bank Checks and wire transfers are credited to the account effective upon receipt and are therefore not subject to any credit hold.

Interest paid to you varies with market conditions.  For information regarding the amount of interest currently paid on credit balances see www.interactivebrokers.com/interest

Glossary terms: 
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