No, that is wrong. You can't trade CFDs. But yes you can trade futures, the problem is that the Aussie SPI futures have a 25 multiplier so the minimum exposure you can take is 1 contract = $140,000 worth and of course that is also the increments as you go from 1 to 2 to 3 etc.. Totally useless for most smaller players.
Interactive Brokers - No Margin for Aussies
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No Ordinary Duck
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Er No its a single contract at $25 a tick.
1 contract is $140K of shares.
Standard
What do you want $1 a tick?
Guess its no forex for aussie's now too cant even do a simple currency conversion hope this is fixed quicky guess these bans have something to do with this.
http://www.abc.net.au/news/2015-02-12/foreign-exchange-traders-fight-to-save-millions/6087976
I'm starting to worry it wont be that long and I wont even be able to trade futures on retail account.
http://www.abc.net.au/news/2015-02-12/foreign-exchange-traders-fight-to-save-millions/6087976
I'm starting to worry it wont be that long and I wont even be able to trade futures on retail account.
CanOz
Home runs feel good, but base hits pay bills!
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This whole thing sounds like a big bluffing game between IB and ASIC. No doubt, some government jerk has his nose in a trough somewhere...i doubt its about protecting traders and investors.
Australia is such a dud when it comes to trading....:frown:
CanOz
Spot On!
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So this came through a couple of hours ago, ASIC doing harm to competition and Australian consumers:
IMPORTANT NOTICE REGARDING FOREX TRADING FOR AUSTRALIAN CLIENTS OF IB
Interactive Brokers holds a license to act as a foreign exchange dealer in Australia, and IB has offered forex trading in Australia for roughly ten years.
However, in 2013, the Australian Securities & Investments Commission ("ASIC") told Interactive Brokers that IB needed an additional license (as a "market maker") to continue to offer foreign exchange trading in Australia. IB respectfully disagreed with ASIC's conclusion, but the firm nevertheless applied for the type of license ASIC required, through a newly formed local brokerage affiliate, Interactive Brokers Australia.
While our additional license application has been pending, Interactive Brokers has been offering foreign currency trading to Australian clients under a "no-action" letter issued by ASIC. Unfortunately, ASIC has informed us that it has decided to withdraw the "no-action" letter covering IB's forex offering in Australia.
We are in discussions with ASIC and we hope to be able to resolve this matter and continue to offer forex trading to Australian clients. For now, however, we are required to make the following changes to our platform for Australian clients. The changes will become effective over the coming days:
Things Australian IB Clients Cannot Do:
• Interactive Brokers will no longer display to Australian clients real-time, executable forex prices on the IB Trader Workstation or through API’s.
• We will no longer allow Australian clients to initiate new forex positions (for example, a long currency position offset by a short currency position being financed through IB).
• We will no longer allow Australian clients to convert Australian dollars into another currency and hold the other currency in their IB account.
Things Australian IB Clients Can Continue to Do:
• Australian clients can continue to trade international products such as stocks and exchange-traded futures and options that are denominated in foreign currencies.
• You may continue to incur foreign currency balances in connection with purchases and sales of international investment products denominated in foreign currencies.
• You may close foreign currency balances (e.g., by converting them into Australian dollars).
If IB is required to convert Australian dollars into a foreign currency (or vice versa) in support of any of the allowable transactions just described, IB will use its best efforts to arrange to execute on your behalf a foreign exchange transaction with one of our forex liquidity providers.
Again, we are hoping to be able to restore our full forex product offering to Australian clients as soon as possible and appreciate your patience while we resolve this issue.
Interactive Brokers Client Services
So what does ASIC do? It goes after Interactive Brokers and its few thousand clients, while allowing the banks to continue a highly illegal, anticompetitive racket where they strip 3% off all foreign travelers (billions of dollars worth, including the poor). The illegal anti-competitive cartel is so strong that you can't find a single bank that doesn't charge at least 3% to convert, despite them having the same forex rates as those offered by IB. Pure cartel activity.
The margin thing was at least understandable. IB was effectively loaning money in pretty major contravention of Australian credit laws (as ridiculous as those laws are, but they're still laws). Even the banning of leveraged forex trading is understandable. But there is zero reason to ban Forex conversions; it's petty and stupid. Makes you wonder if an ASIC executive is getting paid by a competitor. Wouldn't be first the time there's been corruption in a government department.
IMPORTANT NOTICE REGARDING FOREX TRADING FOR AUSTRALIAN CLIENTS OF IB
Interactive Brokers holds a license to act as a foreign exchange dealer in Australia, and IB has offered forex trading in Australia for roughly ten years.
However, in 2013, the Australian Securities & Investments Commission ("ASIC") told Interactive Brokers that IB needed an additional license (as a "market maker") to continue to offer foreign exchange trading in Australia. IB respectfully disagreed with ASIC's conclusion, but the firm nevertheless applied for the type of license ASIC required, through a newly formed local brokerage affiliate, Interactive Brokers Australia.
While our additional license application has been pending, Interactive Brokers has been offering foreign currency trading to Australian clients under a "no-action" letter issued by ASIC. Unfortunately, ASIC has informed us that it has decided to withdraw the "no-action" letter covering IB's forex offering in Australia.
We are in discussions with ASIC and we hope to be able to resolve this matter and continue to offer forex trading to Australian clients. For now, however, we are required to make the following changes to our platform for Australian clients. The changes will become effective over the coming days:
Things Australian IB Clients Cannot Do:
• Interactive Brokers will no longer display to Australian clients real-time, executable forex prices on the IB Trader Workstation or through API’s.
• We will no longer allow Australian clients to initiate new forex positions (for example, a long currency position offset by a short currency position being financed through IB).
• We will no longer allow Australian clients to convert Australian dollars into another currency and hold the other currency in their IB account.
Things Australian IB Clients Can Continue to Do:
• Australian clients can continue to trade international products such as stocks and exchange-traded futures and options that are denominated in foreign currencies.
• You may continue to incur foreign currency balances in connection with purchases and sales of international investment products denominated in foreign currencies.
• You may close foreign currency balances (e.g., by converting them into Australian dollars).
If IB is required to convert Australian dollars into a foreign currency (or vice versa) in support of any of the allowable transactions just described, IB will use its best efforts to arrange to execute on your behalf a foreign exchange transaction with one of our forex liquidity providers.
Again, we are hoping to be able to restore our full forex product offering to Australian clients as soon as possible and appreciate your patience while we resolve this issue.
Interactive Brokers Client Services
As clients we need to do some complaining. The latest news - ASIC banning simple forex conversions - is outrageous. I used IB to convert AUD to Euro/USD to convert at 0.01% rather than the 3% the banking cartel puts on all forex conversion.
So what does ASIC do? It goes after Interactive Brokers and its few thousand clients, while allowing the banks to continue a highly illegal, anticompetitive racket where they strip 3% off all foreign travelers (billions of dollars worth, including the poor). The illegal anti-competitive cartel is so strong that you can't find a single bank that doesn't charge at least 3% to convert, despite them having the same forex rates as those offered by IB. Pure cartel activity.
The margin thing was at least understandable. IB was effectively loaning money in pretty major contravention of Australian credit laws (as ridiculous as those laws are, but they're still laws). Even the banning of leveraged forex trading is understandable. But there is zero reason to ban Forex conversions; it's petty and stupid. Makes you wonder if an ASIC executive is getting paid by a competitor. Wouldn't be first the time there's been corruption in a government department.
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As far as I can tell (they don't explain very well), you can keep current (non-margin/non-leveraged forex) balances, but you can't convert more AUD to USD and hold it in your account, or convert between other currencies.
Thanks for your reply. How do we go about buying more overseas shares now.
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I'd be interested in knowing how to do this as well. I doubt we'd be able to do it via IB as would not be able to perform the currency conversion to buy the foreign shares to begin with!
As an aside, I remember chatting to some overseas FX traders who decided to register companies in Central America, transfer their funds to an account under that company and then open a trading account under the company's name.
Could a similar solution be used here? Maybe not in Central America, but I don't see why I couldn't do the same thing in New Zealand? (don't require citizenship and are outside of ASIC jurisdiction).
Any thoughts?
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I am not sure the mechanics of doing it, but the letter seems to suggest that they will use a 3rd party to convert the necessary funds for the transaction....
Things Australian IB Clients Can Continue to Do:
• Australian clients can continue to trade international products such as stocks and exchange-traded futures and options that are denominated in foreign currencies.
• You may continue to incur foreign currency balances in connection with purchases and sales of international investment products denominated in foreign currencies.
• You may close foreign currency balances (e.g., by converting them into Australian dollars).
If IB is required to convert Australian dollars into a foreign currency (or vice versa) in support of any of the allowable transactions just described, IB will use its best efforts to arrange to execute on your behalf a foreign exchange transaction with one of our forex liquidity providers.
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I would be impressed if this were to be offered at the same price as their usual FX trades.
Also, wouldn't FX trading still technically be possible if you bought & sold ETFs in the US market or on the ASX for that matter????
A Bloomberg article about this. Doesn't sound too good.
http://www.bloomberg.com/news/artic...r-blocks-interactive-brokers-currency-trading
http://www.bloomberg.com/news/artic...r-blocks-interactive-brokers-currency-trading
All a bit stupid really and there as bad as each other, ASIC is getting Anal about things but IB has been dragging there heals, and then us the customers/trader are the ones who ultimately suffer
SORT IT OUT………………
Maybe the sudden hike in Aussie futures data is part of this as well? IB blaming ASX for this sudden out of the blue charge
SORT IT OUT………………
Maybe the sudden hike in Aussie futures data is part of this as well? IB blaming ASX for this sudden out of the blue charge
I have had an IB cash account for about 6mths and have been looking for a way to get a margin account. The only solution that I have been able to come up with is to setup an LLC in the US (which can be done online for around $800) and then open an IB margin account using the new LLC as the legal entity for the account.
I actually stumbled across this forum looking for other Aussies that may have already done this. It seems pretty easy to do but before I invest time into setting this up I would love to hear from someone that might have already done it (or from those that say it it won't work).
Surely this is a simple solution that will overcome all the problems/restrictions that we have as Aussie traders on IB?
Cheers
Paul
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Interesting that they've decided to cut FX on the Friday before Greece decided to call a referundum and the Euro gets pulled through the crapper.
Maybe ASICs way of limiting aussie exposure to failed EUR trades next week. Other FX brokers have decided to limit trades in the EUR instruments
Maybe ASICs way of limiting aussie exposure to failed EUR trades next week. Other FX brokers have decided to limit trades in the EUR instruments
You can have a margin account with IB through an Australian PTY company. There is no need for a US LLC just to get a margin account. I'm currently in the process of setting up a margin account with IB through a PTY company registered with ASIC. I had inquired this with IB and below is the response I got:
Dear Sir/Madam,
Please note "Limited or LLC" corporation accounts are eligible to apply for margin accounts. In addition, Australian incorporated company with the "PTY" status will also be eligible as well.
You may refer to the below link for starting a company account application. The documentation requirement can be found on the link as well. Thank you.
https://www.interactivebrokers.com/en/index.php?f=2324
Regards,
Kenny T
AU Client Services
The application says to complete this Certified Copy Certificate:
http://www.interactivebrokers.com/download/Australian_Certified_Copy_Certificate.pdf
Did anyone complete this form? I don't see any option for a company. If anyone has successfully completed this process, please let me know how you filled in this form? Thanks!
I probably did (for a company) but can't remember what I ticked. That form is to be sent to to the IB office with some certified documents.
Quickest and easiest is to get onto the Chat (link inside the online application) and ask them. I think they are there 24hrs.
