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JohnC

Potential no PDT rule for IB uk/eu clients

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IB look set to move their London office, eliminating the PDT rule for UK and EU clients.

See link for full details but from FAQ, 

Q: Will I be subject to the U.S. Pattern Day Trading Rule once my account is migrated?

A: Accounts maintained with IBUK are subject to the U.S. Pattern Day Trading (PDT) rule as the accounts are introduced to and carried by IBL, a U.S. broker. The PDT rule restricts accounts with equity below USD 25,000 to no more than 3 Day Trades within any 5-business day period.

As accounts migrated to IBLUX, IBIE or IBCE will not be introduced to IBL, they will not be subject to the PDT rule.

 

But FAQ also say..

Q: What happens if IBKR does not receive the regulatory approval necessary to migrate accounts by December 31, 2020?

A: IBLUX, while approved, it is subject to constraints on the permitted scale of its business and licensing for either IBIE or IBCE is therefore necessary to complete the migration prior to December 31, 2020. If a determination is made that neither will receive licensing in time, clients will be contacted with an explanation as to how their account will be treated at the end of the Brexit transition period.

See here for full details.

https://ibkr.info/en/article/3515?

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So after my initial excitement  it turns out that the migration from IBUK is only for Europe clients, clients based in the UK will still be IBUK clients.

IBUK only stops being able to provide service to residents of EEA. PDT rule still holds for UK residents but good news for Europe clients migrated to the new IB offices will benefit from the new PDT rule.

 

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Hi john

When you say the new PDT rule, do you mean that a variant of the PDT rule still exists for the migrated clients or completely ceases to exist? Also do you think the same would apply to European residents opening new accounts with IBLUX, as in no PDT rule?

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Hi DC

Completely ceases to exist is my understanding. 

So I think it all depends on where you are a resident as to where you can open IB account. If resident in the UK it will be IBUK so PDT rule applies. If you are in Europe then it will be IBIE or IBLUX so PDT rule will not apply.  Hope that makes it clearer.

 

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18 hours ago, JohnC said:

Hi DC

Completely ceases to exist is my understanding. 

So I think it all depends on where you are a resident as to where you can open IB account. If resident in the UK it will be IBUK so PDT rule applies. If you are in Europe then it will be IBIE or IBLUX so PDT rule will not apply.  Hope that makes it clearer.

 

I am excited to investigate this because I am living in Norway at the moment (originally from the uk) and if it applies to where I am, that would mean

1) I can finally move away from my offshore broker to a more established broker with better functionality and

2) I will have access to the IB API which will allow me to finally automate my trading strategies thus eliminating my biggest weaknesses in trading (the psychological side of trading) by taking me out of the equation

Thanks John 👍

 

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I'm not sure how it works with Norway since they aren't in the EU.

Good luck with this, keep us posted how you get on.  

 

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On 1/9/2021 at 2:35 PM, DC said:

I am excited to investigate this because I am living in Norway at the moment (originally from the uk) and if it applies to where I am, that would mean

1) I can finally move away from my offshore broker to a more established broker with better functionality and

2) I will have access to the IB API which will allow me to finally automate my trading strategies thus eliminating my biggest weaknesses in trading (the psychological side of trading) by taking me out of the equation

Thanks John 👍

 

DC

Have you been in contact with IB to follow up on your question.  I am also in Norway (and also originally from UK) and currently trading with CMEG and ideally would like to move to IB if these changes are implemented.

Cheers

JC

 

 

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From the IB european website:

Brexit Notification

Interactive Brokers clients located in the European Economic Area (EEA) are required to migrate their account from Interactive Brokers (UK) Limited to one of our new European entities. If you are an EEA client, you can start the migration process by logging in to your account via the "Log In" button on our website.

So the new rule applies not only to EU residents, but to EEA residents, which is EU + Iceland, Liechtenstein, and Norway.

This is my understanding, I hope I'm right 🙂 

UPDATE: My account has been transferred to IB Ireland, however my buying power is gone now (zero leverage). Anyone else has the same issue?

 

 

Edited by Mars

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On 1/11/2021 at 7:57 PM, Mars said:

From the IB european website:

Brexit Notification

Interactive Brokers clients located in the European Economic Area (EEA) are required to migrate their account from Interactive Brokers (UK) Limited to one of our new European entities. If you are an EEA client, you can start the migration process by logging in to your account via the "Log In" button on our website.

So the new rule applies not only to EU residents, but to EEA residents, which is EU + Iceland, Liechtenstein, and Norway.

This is my understanding, I hope I'm right 🙂 

 

 

 

Stupid question probably but hopefully can be answered easily.  Are the various IB European companies charging the same in terms of commissions and fees and the US / Canadian counterparts?

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On 1/13/2021 at 3:35 AM, JC said:

Stupid question probably but hopefully can be answered easily.  Are the various IB European companies charging the same in terms of commissions and fees and the US / Canadian counterparts?

After checking the European and US sites it appears that the fees are the same. I put below the Tiered prices, which are the same in both places. I hope this is what you meant.

USA.pngUnited States - Tiered
VOLUME (PER MONTH) 2, 7, 8 IB COMMISSION PER SHARE
US STOCKS, ETFS, ETPS AND WARRANTS MINIMUM PER ORDER MAXIMUM PER ORDER
<= 300,000 Shares USD 0.0035 USD 0.35 1.0% of trade value
300,001 - 3,000,000 Shares USD 0.002 USD 0.35 1.0% of trade value
3,000,001 - 20,000,000 Shares USD 0.0015 USD 0.35 1.0% of trade value
20,000,001 - 100,000,000 Shares USD 0.001 USD 0.35 1.0% of trade value
> 100,000,000 Shares USD 0.0005 USD 0.35 1.0% of trade value
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On 1/14/2021 at 2:40 PM, Mars said:

After checking the European and US sites it appears that the fees are the same. I put below the Tiered prices, which are the same in both places. I hope this is what you meant.

USA.pngUnited States - Tiered
VOLUME (PER MONTH) 2, 7, 8 IB COMMISSION PER SHARE
US STOCKS, ETFS, ETPS AND WARRANTS MINIMUM PER ORDER MAXIMUM PER ORDER
<= 300,000 Shares USD 0.0035 USD 0.35 1.0% of trade value
300,001 - 3,000,000 Shares USD 0.002 USD 0.35 1.0% of trade value
3,000,001 - 20,000,000 Shares USD 0.0015 USD 0.35 1.0% of trade value
20,000,001 - 100,000,000 Shares USD 0.001 USD 0.35 1.0% of trade value
> 100,000,000 Shares USD 0.0005 USD 0.35 1.0% of trade value

Exactly what I wanted to get confirmation on Mars.  Many thanks!

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so my account has been migrated from IBUK to IBIE and the PDT limits are gone. I will test it later today and post. Anyway my buying power is twice the size i had in IBUK too.

Be aware that the protections of your account is also very lower. only 20k is protected. it was 500k in IBUK.

 

edit: so no PDT for EU citizens. yay!

Edited by peterB
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On 1/11/2021 at 8:57 PM, Mars said:

UPDATE: My account has been transferred to IB Ireland, however my buying power is gone now (zero leverage). Anyone else has the same issue?

 

Hi,

My account also shows that my leverage is zero(no buying power)? Did you find out why? Or how to fix this?

 

 

Edited by Ville

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