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Interactive Brokers - No Margin for Aussies

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If one is starting new and go the Company route (if that is the only way to get a Margin T A/c in US and other benefits ) then the additioanl downside is ASICand accoiunting charges and hassle of having another entity .
ALternative
Pay higher brokerage. have limited access to no of markets and open an individual a/c with somebody like OPtions Express!

Think Of Swim which many regard is a very good for Options trading still does not accept Australian COmpany the Compnay has to a US LLC
Correct me If I am wrong
 
If tax is a consideration, IB also offers margin to trust accounts as long as the trustee is not a natural person. That will give you the benefit of spreading income/still receiving CGT discount etc.
 
McLovin said:
IB also offers margin to trust accounts as long as the trustee is not a natural person.
Click to expand...

Not too sure about this ... I have a trust account (SMSF) with IB using a corporate trustee and I get no margin. No probs with the corporate account though.
 

Hi Trader,

You can BPAY in AUD and then no restrictions in converting to USD as its an LLC (US Company) No need to create a USD bank account if you don't want to.

You will need an EIN when you create the LLC.

My LLC's are relatively new so I cant give you any tax advice.
I do use a second broker (Options Xpress), however IB has best execution and best price and is my primary

Thanks
 
CanOz said:
Agree, this is the advice I was given at Radges conference in Noosa as well.
Click to expand...

Are there many people here utilising this option?

I spoke with IB the other day regarding this and they said margin is offered to Pty Ltd companies.

I think discussed this with an accountant friend, as I told him I would be establishing a company via Cleardocs shortly but he advsied I would be the trustee of the company? (As I would have 100% ownership)

Does this sound correct, or do I have my wires crossed.
 
bingk6 said:
Not too sure about this ... I have a trust account (SMSF) with IB using a corporate trustee and I get no margin. No probs with the corporate account though.
Click to expand...

I created a trustee as per the above, and it was the worst thing I've ever done.
Once you are classified as a corporate, and not a person, ALL the costs (esp. for data) go up by huge amounts. Not only do you have to pay data fees, but you also have to set these up with the exchange directly (for NYSE anyway).

If there is any other workaround, I would recommend it (i.e. setting up an entity in Singapore or Delaware).

IB have gone from being a great service provider and broker, to being super inflexible - most likely caused by the stupid regulations - and now, somewhat expensive.
 
Hi JM,

I'm pretty sure you can trade with IB with out subscribing to data, if you that suited you.
 

It is really helpful to hear what you have been through as I did think about going down this road as well.

It appears that it is not worthwhile after all, for Australian residents to go down this road.

while looking around for an alternative broker I came across Sharedirect365 who offer cheaper brokerage rates compared to the Brokers operating in Australia and wondering if anyone has experience with it? It would be great to hear (maybe should be a new post!)
 
I set up a corporate trustee and haven't had too many issues. The extra paperwork/compliance was a bit of a pain and yes the data fees are higher but not crazy absorbent in my view.
 
kid hustlr said:
I set up a corporate trustee and haven't had too many issues. The extra paperwork/compliance was a bit of a pain and yes the data fees are higher but not crazy absorbent in my view.
Click to expand...

Why does IB not clean up this mess sort out thing with ASIC and offer same things that Options express does!
 
mjim said:
Why does IB not clean up this mess sort out thing with ASIC and offer same things that Options express does!
Click to expand...

Agreed it's not ideal but I don't have an answer.

There's 350 million punters in the USA and 20 in Australia - we just aren't worth their time.

ASIC is ASIC and i don't think they will ever 'get it'
 
kid hustlr said:
Agreed it's not ideal but I don't have an answer.

There's 350 million punters in the USA and 20 in Australia - we just aren't worth their time.

ASIC is ASIC and i don't think they will ever 'get it'
Click to expand...
I take your point about our size
However I am not blaming ASIC, it is a fashion to blame regulators but the fact of the matter is if other brokers can comply with ASIC ...why can't IB > Other major overseas brand which have gone through compliance here are Saxo/ Oanda/ FXCM/ Options Express etc I think it is a case of head in the sand by IB
and also it is not that IB does not have business here.. they have other large trader groups who have bulk a/c with IB
It is weird!
 

IB is not alone..TD/Ameritrade which is a way bigger company than the likes of FXCM or OX pulled out while IB gradually scaled back their services.
 
Hi guys,

I am new to IB, just set up an account hoping to trade ASX equities with margin.

Looking at this thread, it seems that margin is not available for aussies? or has this changed recently?

Otherwise i might need to look at DMA CFD providers for margin.


Cheers,
leyy
 

Not for individuals, but it is available for some other structures, such as companies, trusts etc. You might want to give them a call and ask if they are making any progress in relation to making it available for individuals once more. The last I heard (a few years ago) was that they were working on it but no timeframe was given
 
After doing a load of reading about the IB margin restriction for Aussies I created a Reg-T Margin account from an Australian registered Pty Ltd earlier this year.

Here's what I found;

1. Although you can access Reg-T margin rates, expect to pay significantly higher fees for data and other services by using a company account. Depending on your account size and volume this may or may not be a concern for you.

2. The signup process took several hours and was a total pain in the nuts. Their website user experience is particularly poor and in some cases buggy. I'm very technical and had to flip browsers a number of times to deal with things like broken document uploads.

3. Although you can access Reg-T margin for stocks, you're still unable to use their CFD products. This was a deal breaker for me as I trade a long-short strategy and ideally wanted a single broker to execute from.

4. Regarding the above; I tried several times to get a straight answer out of their support staff about the reasons for this and any possible timeline for remediation and was just fed one-liners.

IB has a killer platform / products and I'd genuinely like to trade with them but, unfortunately, Australia just isn't their target market. Ultimately I gave up and moved to a broker that actually wants my business and gives me straight answers when I ask them questions
 

Which broker did you end up going with?

Sounds like I'm in a similar situation to you - looking to run a strategy involving Australian equities, a margin facility and the ability to short the ASX200 index (preferably through CFDs) and it would be ideal to execute from a single platform.
 

A few people have asked me the same thing via DM and I've avoided answering here so as to avoid sounding like a shill. For disclosure, I'm a private trader who has never worked in the financial industry and has absolutely no affiliation with any broker or other financial services company.

I ended up with IG Markets and I've been very happy with them.

The key features for me are;

1. They answer the phone and are always very helpful and knowledgeable.

2. The information they publish about client funds management and corporate governance seems robust.

3. The L2 Dealer platform is reasonable enough for executing and managing L2 positions and Pro Real Time charting is included for active traders which is useful for a whole range of things (eg. if you want to code bespoke indicators / market screeners)

4. You can fund CFD positions from stock holdings, which is super useful for trading pairs where you want to trade stocks for the long side and DMA CFDs for the short side.

Again, I've got absolutely no affiliation with any org. mentioned in this thread and apologies in advance if the post reads as advocacy - it's just my personal opinion / experience. Do your own research.
 
What exactly is the problem that IBKR is having with ASIC? Does ASIC find IBKR unsafe and is protecting Aussies from losing their savings? However, if IBKR is deemed unsafe, does it mean that all the other brokers operating in Australia today are deemed safer and financially stronger? The cynical people might suspect that ASIC is trying to protect local businesses using regulation as an excuse. What exactly is the real situation? Any good, educated guess?
 
Big 4 banks and their broking subsidiaries argue that foreign competitors should be subject to the same regulations as they are (an easy line to peddle to pollies) , thus govt pressure on ASIC to act even if this results in less protection for the consumer.
 
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