Financial Reliability

When using a broker for your investments, it is essential that your broker is reliable and can stand by, even in non profitable situations. We offer financial statements of Interactive Brokers LLC on our website for review.

Note that Interactive Brokers LLC and its associations are owned by IBG LLC.

Important strengths and security facts about Interactive Brokers LLC

  • On a consolidated basis, IBG LLC surpasses $8.1 billion in ownership assets, and over $6.0 billion in excess of regulatory demand.
  • IBG LLC holders are our public company of choice, with Interactive Brokers Group (18.5%) and the firm’s employees and their associates (81.5%). Unlike other firms, we cooperate considerably in loss just as much as in profit. Due to this entrusted interest, we run our business carefully.
  • We run our brokerage and market making businesses in separate corporations, which are registered and secured. We carefully manage organized and procedural separation between the two business lines and do not combine or make use of client-segregated assets for copyright operations. Although certain associates of IBKR trade for their own account, our client-facing businesses do not engage in copyright trading. We have finalized the narrowing down of the bulk of our market making operations.
  • No material positions are held in over-the-counter securities or derivatives. Nor CDOs, MBS or CDS are held.
  • Our positions are placed to market on a daily basis and the resulting payables / receivables are reunited to external sources automatically.
  • Our real-time margining system continuously places all client positions to market.
  • All investments are carefully examined before being carried out and positions in accounts with insufficient margin deposits are liquidated automatically.
  • IBG LLC reported a pretax profit of $1.2 billion for 2019
  • IBG LLC has no long-lasting debt.
  • Interactive Brokers LLC have a rating of BBB+, Outlook positive by Standard & Poor’s.

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Important advantages and security facts about Interactive Brokers LLC

How We Handle Client Assets

Client money is separated in special bank or protected accounts, which are selected for the exclusive benefit of clients of IBKR. This protection (the SEC term is “reserve” and the CFTC term is “segregation”) is a key principle of securities and materials brokerage. By carefully separating the clients assets, if no stock or money is borrowed and no futures are held by the client, then the clients assets are accessible to be returned to the client in the event of bankruptcy of the broker or a default by.

A chunk of client funds are usually invested in U.S.Treasury securities. Given the credit concerns over foreign sovereign debt, IBKR does not currently invest any client money in money market funds-although permitted by CFTC regulations.

To protect all clients, IBKR holds a large amount of its own money in reserve and segregated accounts-to be certain that there is more than enough cash.

Transparent accounts with no borrowing of cash or securities

Securities client money is protected as follows:

  • A large amount is invested in U.S.Treasury securities, Treasury Notes, Treasury Bills, direct investments and reverse repurchase agreements, where the collateral received is in the form of U.S. Treasury securities. These transactions are regulated with third parties and guaranteed through a main counterparty clearing house (Secured income Clearing Corp, a secondary of the Depository Trust & Clearing Corp.). The collateral rests in the possession of IBKR and held at a custody bank in a separate Reserve Safekeeping Account for the complete benefit of clients. To support client margin requirements on securities options positions, U.S. Treasury securities may also be pledged to a clearing house.
  • Client funds are maintained on a net basis in the reserve accounts, which reflects the long balances of some clients and loans to others. To the extent that any client who maintains a margin loan with IBKR, will be fully secured with the loan’s stock being valued up to 140%. The security of the loan is increased by MEXEMs conservative margin policies, which restrict the loaner to collect a margin shortage within days, as authorized by regulation. Instead, IBKR monitors act on a real-time basis to automatically repay the loan and liquidate positions. This places the loaner back into margin compliance without putting IBKR and other clients at risk.
  • A Chunk is deposited mainly with large U.S. banks in special reserve accounts for the complete benefit of IBKRs clients. These deposits are distributed across a number of banks with investment-grade ratings so that concentration risk with any solitary institution can be avoided.

    No solitary bank holds over 5% of total client funds held by IBKR. From March 2020, the following banks held deposits from IBKR (this list is subject to differ over time at IBKRs discretion). Certain banks which are associates or branches of foreign financial establishments, are subject to regulated miscalculation by the Office of the Comptroller of the Currency and the Federal Reserve.

    • Branch Banking and Trust Company
    • Bank of the West
    • BMO Harris Bank, N.A.
    • Citizens Bank, N.A.
    • KeyBank National Association
    • Standard Chartered Bank
    • SunTrust Bank
    • The Bank of Nova Scotia
    • US Bank, N.A.

Current SEC regulations require broker-dealers to perform a complete resolution of client money and securities (known as the “reserve computation”) at least on a weekly basis to guarantee that client funds are properly separated from the broker’s funds. In order to further increase the protection of clients assets, Interactive Brokers sought and received approval from FINRA (the Financial Industry Regulatory Authority), to report and execute the reserve computation on a daily basis, instead of a weekly basis. IBKR launched daily computations in December 2011 along with daily adjustments of the money put aside in safekeeping for our clients. Reconciling our accounts and client reserves daily instead of weekly is just another state of the art protection that Interactive Brokers seek for our clients.

Fully-paid and client owned securities are protected in accounts at custodians and depositories that are precisely identified for the complete benefit of clients. IBKR coordinates positions in securities owned by clients daily to guarantee that these securities have been received at the custodians and depositories.

Click below for the Interactive Brokers Firm Specific Disclosure Document required by CFTC Rule 1.55(k).

Interactive Brokers LLC Firm Specific Disclosure Document pursuant to CFTC Rule 1.55(k) and NFA Rule 2-36(n)

Securities accounts with margin loans

For clients who borrow money from IBKR to purchase securities, IBKR is authorized by securities regulations to utilize for financing purposes up to 140% of the loan value of the stock held by clients of IBKR. In simple terms, money is borrowed from a third party by IBKR (such as a broker-dealer or a bank), using the margin stock as security that belongs to the client, which the client borrows those funds in order to finance their margin purchases. Usually, IBKR lends
out a small chunk of the total stock that is authorized to lend out. When IBKR lends stock to its clients, it must place extra funds into the special reserve accounts set aside for the clients benefit.

Secured Bank Deposit Sweep Program

With the Insured Bank Deposit Sweep Program, entitled IBKR clients can acquire up to $2,500,000 of FDIC insurance in addition to the existing $250,000 SIPC coverage for total coverage of $2,750,000. IBKR sweeps each engaging client’s free credit balances daily to one or more banks, up to $246,000 per bank, allowing for the collection of interest and staying within the FDIC secured threshold. Fund balances above $2,750,000 stay subject to shielding under the SEC’s Customer Protection Rule 15c3-3, supported by the firm’s equity capital, which surpasses $8.1 billion.

https://www.interactivebrokers.com/en/index.php?f=27462

Mexem takes a dynamic approach when it comes to client protection. Mexem decides the amount of funds and securities owed to clients daily and separates funds for the maximized benefit of clients, along with a large safeguard. IBKR was the first broker-dealer approved by FINRA to determine its client reserve commitment (under Rule 15c3-3) on a daily basis, while the quality of the industry is to perform this estimation on a weekly or monthly basis.

MEXEM intensified client protection lowers the risk of clients not receiving a full refund in the event of the company’s liquidation.At almost all other broker-dealers, the amount owed to clients is decided weekly or monthly. This causes a risk to clients funds deposited in the interim, since those firms usually will only protect what was on deposit as a calculation was performed last time. MEXEM decides what is owed to clients and supersedes funds to cover our commitments every business day. In the highly doubtful event of our disbandment, administrators would be able to calculate more effortlessly what is owed to each client. At other broker-dealers, administrators would have to revive the past week of activity which, as evidenced by the Lehman bankruptcy, would considerably set back the payment of assets.

MEXEM seeks real-time risk margin prerequisites to client accounts, considering most the rest of the industry applies end-of-day risk margin. If a client is considered to have inadequate assets to cover the risk of their open positions, IBKR will naturally engage real-time liquidations of their positions to return the account to margin residency. Other broker-dealers usually allow clients to carry the risk over numerous days.

Mexem real-time risk margin demand and secure liquidations substantially minimize our clients vulnerability to losses attributable to other clients trading, and the risk that client failure constitutes to Mexem. The execution of other broker-dealers to determine risk at the end of the day increases the probability that unstable market conditions could make their clients vulnerable to risk compared to IBKR clients in similar market conditions. Companies that do not inflict real-time liquidations, and authorize clients to bring in funds at a future date in order to cover the risk.

Another crucial benefit of doing business with MEXEM is that it does not carry any copyrighted inventory. MEXEM simply acts as a moderator for client trading and does not engage in any directional bets. Two of the most consequential broker-dealer bankruptcies of the past decade (Lehman Brothers and MF Global) were caused by the risk created from copyrighted holdings.

Since MEXEM does not make copyrighted bets, the risk of IBKR going bankrupt and client assets being immersed in liquidation is significantly less than other broker-dealers that take copyrighted positions. Furthermore, MEXEM clients do not have to carry concern over their broker making copyrighted bets against them.

All broker-dealers are authorized to loan client securities (called “rehypothecation”) if a client borrows on margin. When MEXEM occupies in rehypothecation of client securities, it supersedes 103% of the market value of client securities rehypothecated, on a daily basis. Most other broker-dealers supersede the money only once a week.

By cancelling client funds daily, MEXEM makes certain that there is segregated cash in excess of the market value of securities rehypothecated to make clients whole. For other broker-dealers that only execute this calculation weekly, client assets and funds are put through to an expanded risk that the company has not shielded its clients for intraweek use of client assets, which would result in losses to clients.

Comparably, unlike other broker-dealers, IBKR segregates cash on a daily basis to cover securities owned to clients that for the moment lack control positioning. This is a typical circumstance in the industry, known as “segregation deficit”. Other broker-dealers may allow these deficiencies to carry on for several days before taking necessary action.

MEXEM lessens clients’ risk by guaranteeing that the market value of all securities not appointed in a good control location are carefully segregated in funds daily. This permits MEXEM clients to maintain a high level of confidence that will accurately segregate all their assets. Many other broker dealers will convey the shortage for several days without taking any additional steps to shield clients.

Furthermore, MEXEM is not associated with a bank, which is far from most comparably capitalized broker-dealers. Not being associated with a bank supplies MEXEM, with a more secure platform for our clients should a marketwide crisis emerge.

Broker-dealers associated with banks are affected by further administration by banking regulators, which results in further unreliability as to who has rights to the assets in the event of bankruptcy. Since MEXEM is not a bank, we believe clients’ assets would be restored in a more timely fashion than for bank-owned broker-dealers. Furthermore, in a financial crisis situation, MEXEMs financial resources would be committed exclusively to guaranteeing the continued trouble-free operations of the broker-dealer. Bank associated broker-dealers, on the contrary, are capitalized by their bank associate, and are usually set-up as a subsidiary of a bank holding firm associate. Unlike IBKR, these bank-associated broker-dealers are not self-contained, self capitalized units adding a layer of extra risk for their clients. In a financial crisis those broker-dealers are competing with their banking associates for capital and liquidity. This could result in the capital being drawn out of the broker-dealer and funds being positioned at the associated banking entity to the disadvantage of brokerage clients. Bear Stearns and Lehman Brothers are documented examples of entities that raided their broker-dealer associates for capital in an attempt to save the banks, which were the main cause of their financial issues. Both entities filed for bankruptcy, As a result, their clients encountered consequential delays in accessing their assets and transferring them to an up and running broker-dealer. Indeed, during the peak of the financial crisis, while clients were withdrawing funds and equity from these bank-associated broker-dealers, those clients were depositing assets with IBKR as a refuge. As a result of IBKRs secure financial position, client funds and client equity increased by 77% and 65% respectively from November 2008 until November 2009.

Account Protection

Client securities accounts at IBKR LLC are protected by the Securities Investor Protection Corporation (“SIPC”) for a maximum coverage of $500,000 (with a cash sublimit of $250,000) and under IBKR LLC’s excess SIPC policy with certain underwriters at Lloyd’s of London 1 for up to an additional $30 million (with a cash sublimit of $900,000) subject to an aggregate limit of $150 million. Futures and options on futures are not covered. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities.

For the purpose of determining an IBKR LLC client account,accounts with like names and titles (e.g. John and Jane Smith and Jane and John Smith) are combined, but accounts with different titles are not (e.g. Individual/John Smith and IRA/John Smith).

SIPC is a non-profit, membership corporation funded by broker-dealers that are members of SIPC. For more information about SIPC and answers to frequently asked questions (such as how SIPC works, what is protected, how to file a claim, etc.), please refer to the following websites:

http://www.SIPC.org

https://www.finra.org/investors/have-problem/your-rights-under-sipc-protection

Client securities accounts at IBKR LLC are protected by the Securities Investor Protection Corporation (“SIPC”) for a maximum coverage of $500,000 (with a cash sublimit of $250,000) and under Interactive Brokers LLC’s excess SIPC policy with certain underwriters at Lloyd’s of London 1 for up to an additional $30 million (with a cash sublimit of $900,000) subject to an aggregate limit of $150 million. Futures and options on futures are not covered. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities.

For the purpose of determining an IBKR LLC client account, accounts with like names and titles (e.g. John and Jane Smith and Jane and John Smith) are combined, but accounts with different titles are not (e.g. Individual/John Smith and IRA/John Smith).

SIPC is a non-profit, membership corporation funded by broker-dealers that are members of SIPC. For more information about SIPC and answers to frequently asked questions (such as how SIPC works, what is protected, how to file a claim, etc.), please refer to the following websites:

 

Shielded Login System

MEXEM is committed to shielding your account and your account assets from illegal practices. The Protected login System provides an additional layer of security to your account at no cost through the use of a free physical security device or IBKR Mobile Authentication, our interactive security application designed for smartphones. Even though it requires an additional step when logging into your account, the simple engagement of entering a randomly generated security code along with your username and password successfully protects your account.

Consider this: If an Identity thief or Internet hacker somehow manages to obtain your MEXEM username and password, they will be unable to access your account without physical possession of your Secure Login System device or full access to your smartphone. Secure Login System advantages may include:

  • The security device provides a layer of extra protection to your MEXEM account.
  • Engagement in the software results in higher daily and weekly withdrawal limits.
  • If you have multiple accounts, you’re not required to have multiple devices. You can share a security device among numerous usernames registered to the same person.

Provisional Smartphone Two-Feature Authentication

During the account application process, you will be asked to verify a smartphone number in order to continue. This will authorize two-feature security through SMS. MEXEM will send you a one-time passcode when you attempt to log in.

The smartphone two-feature authentication is provisional and will be removed once you activate one of the physical or digital security devices listed below.

Physical Safety Devices

Click the link below to find out more on the physical protection device:

Digital Security Card +- Available to accounts with a balance larger than $500,000, this card adds another layer of protection through the use of a PIN number, a challenge code and a high count of attainable code combinations.

MEXEM Smartphone Authentication

MEXEM Smartphone Authentication supplies two-feature authentication for your IBKR account app downloaded to your Android or iOS smartphone device. IBKR Smartphone Authentication requires a fingerprint or PIN code to operate. You can use your MEXEM Smartphone Authentication exclusively or as an alternative to your existing physical protection device.

How to Request a Safety Device

  • New Clients – Register and confirm your smartphone number or activate the IBKR Smartphone Authentication – download the Android version from Google Play or the iOS version from the App Store. For further instructions, see IBKR Knowledge Base article KB2260.
  • Existing Clients – Accounts with value above $500,000 may seek a Digital Secure Card+ as a complementary device to their IBKR Smartphone Authentication. To do that, please follow the instructions here.

When will I Acquire My Device?

We ship physical safety devices daily. Estimated delivery times range from several business days to several weeks, depending on local delivery options and your shipping address. MEXEM Smartphone Authentication is downloaded from Google play or the App Store.

Activation

Once you have obtained your physical safety device, log into Account Management and follow the instructions here to activate your device.

MEXEM Smartphone Authentication users must initially install the application from the specific smartphone application store. For more instructions, see MEXEM knowledge Base article KB2260.

Once your safety device or interactive security app is activated, every time you log in to the account management, WebTrader, TWS or MEXEM Smartphone, you will be needed to enter two authentication features – Your username and password combination along with the security code that is generated by your device. When you log in successfully, your account will be secured with complete perimeter coverage, protecting both your positions and funds from unauthorized access.

How to Request a Renewal for your Safety Device

In the event that your physical safety device has been misplaced, stolen or is unusable, follow the instructions in IBKR Knowledge Base article KB1943.

Withdrawal Limitations

Clients who engage in the Secure Login System enjoy upgraded withdrawal capabilities, while clients who do not take part are subject to daily and weekly withdrawal limitations. The amount that an engaging client may withdraw or transfer over a given one- or five-day period increases correspondence with the protective value of the device and is shown in the table below.

Security DeviceMaximum Withdrawal per DayMaximum Withdrawal in 5 Business Days
None50K USD100K USD
SMS200K USD600K USD
MEXEM Mobile Authentication200K USD600K USD
Security Code Card*200K USD600K USD
Digital Security Card*1M USD1.5M USD
Digital Security Card+UnlimitedUnlimited
Platinum*/Gold*UnlimitedUnlimited
Notes:
*Represents a legacy device that is no longer being provided and in the process of being replaced with the Digital Security Cared version. See IBKR Knowledge Base article KB975 for more details.
[1] Please note that while IBKR exploits no fee to use a device, a renewal fee is associated with certain devices if damaged, lost or otherwise not returned should the account be closed.

How We Keep Your Account Protected

As soon as you log in, our account security features are there to verify that your account remains protected.

Two-Feature Authentication

Feature One: In order to access an account, a unique username/ password is required.

Feature Two: Protected login System. Members receive a personal security device which supplies a randomly-generated security code. This code is used in coexistence with the username and password to access secure areas. Click here for more details.

Two-Feature Authentication

MEXEM limits account access following a defined number of failed login attempts

Automatic Logout

We have built in an automatic logout feature that logs you out of the application after a defined period of inactivity.

Secure Socket Layer

  • MEXEM distributes 2048-bit EV Certificates, TLS 128-bit or increased encryption to organise a secure connection and make certain the integrity and confidentiality of information passed between MEXEM and your computer. Activate SSL by examining the “Use SSL” box on the TWS login dialog. Using SSL may impact the performance of your PC relying on its capabilities.
  • Operated monitoring systems to make certain that only strong encryption algorithms are used.
  • MEXEM ensures that all website traffic uses encryption.

EV (Extended Validation) technology confirms that you are on a secure website.

Restrict Login Via IP Limitations

Limit access to TWS to a particular list of IP addresses. In scenarios where numerous traders have access to an account, these restrictions can be set at the independent trader level.

Statements

All Statements are accessed through protected login to account Management.

Security Team

We take on state-of-the-art transaction monitoring systems and sustain a committed security team that is incharge of detecting suspicious activity. If a suspicious or unfamiliar transaction is noted, a member of the team may contact you to ensure the validity of the transaction. If contacted, you will never be asked to supply your password and we encourage that you call back and request to speak to a member of the security team via our free number 1-877-422-2757 in order to first confirm their identity. You should notify IBKR immediately via our free number 1-(887)-422-2757, if you believe that your account has been compromised

Know the Threats

Spyware

This implies software unintentionally downloaded from the internet when you visit certain websites. Spyware secretly gathers information from your computer without your consent. Once installed, spyware keeps track of user activity on the internet and transfers that information (including usernames and passwords) to an unauthorized recipient. It is recommended that you install anti-spyware on your computer to detect and remove spyware.

Phishing

Thieves use phishing to gather important information by pretending to be a trustworthy establishment. Phishing is usually carried out via an email that consists of a link to what appears to be a genuine website. These simulated sites prompt you to enter your personal information, which are then used to access your accounts. Note that IBKR will never send an email requesting personal information such as your password or social security number. If you come across a suspicious email which identifies itself as coming from IBKR do not reply, and immediately let our security team know by calling this number-free in the US at (877) 442-2757 or direct at (312) 542-6901

Worms, Viruses and Trojan Horses

These malicious programs can cause severe irreversible damage to your hardware, software or files, and in some cases can leave your system open to unauthorized access and possibly allow sensitive information to be compromised. These programs, which act differently on how they replicate and spread, are best controlled by making sure your operating system is up-to-date and that anti-virus software is installed.

For further information on keeping your personal computer and your privacy protected see:

CERT® Coordination Center Home Network Security
http://www.cert.org/tech_tips/home_networks.html

Security Focus – Securing Privacy, Part One: Hardware Issues
http://www.securityfocus.com/infocus/1568

Security Focus – Securing Privacy, Part Two: Software Issues
http://www.securityfocus.com/infocus/1573

Security Focus – Securing Privacy Part Three: Email Issues
http://www.securityfocus.com/infocus/1579

Security Focus – Securing Privacy Part Four: Internet Issues
http://www.securityfocus.com/infocus/1585

Recommended Network Security Practices

MEXEM reaches great lengths to maintain our clients’ accounts protected. Following these recommended Network Security Practises can provide an additional layer of security from online threats.

Utilize Safe Computing Operations

  • Lock your computer if you’re leaving it unattended for a period of time by setting up a password protected screensaver. Always keep your computer turned off when you’re not using it.
  • Avoid accessing your account from public computers which may have been targeted by hackers. If using a public computer is necessary, remember the following:
    • Use the virtual keyboard on the login window to stay clear from having your keystrokes captured.
    • Sign out after using your account.
    • Never leave the computer unattended while signed in.
    • Clear the browsing cache after signing out so that personal information remains stored on the computer.
  • Do not share data unless it is completely necessary. It’s a good idea to disable the Windows file and printer sharing features, but if you decide to use these, keep in mind configuring the access permissions with strong passwords, and only share to particular users.
  • Pop-ups: We recommend that you have your pop-up blocker turned on and filter set to the highest possible level. Then either disable your pop-up blocker while using this site or add the IBKR web site to your list of “trusted” sites.
  • Use the most current version of your browser and check for security updates and patches on a regular basis.
  • Use email cautiously, and delete messages that don’t belong to a trusted source as they may potentially contain harmful links or attachments, or may be an attempt to fraudulently gather personal information. Keep the “preview pane” turned off in your email system as this function may allow some viruses to be executed even if you never access your email.

Create a Secure Password

  • Use the maximum characters available and avoid duplicate or simple alphabetic and numeric sequences or passwords containing sensitive information.
  • Under any circumstances should you share your password with anyone.
  • Change your password frequently and do not use the same password for multiple systems.
  • Do not leave notes on your desk, keyboard or monitor to assist you in remembering your passwords.
  • Do not enable any application features that would automatically sign you in or pre-fill your username or password fields.

Install protection software

Use/ install protection tools as mentioned below:

  • It is recommended that you install and properly reconfigure a software network firewall on your computer to maintain the flow of traffic to your computer. In addition, it is a good idea to use a hardware firewall. This is also essentially important if you are operating with a broadband connection and therefore maintaining continuous Network access.
  • Use antivirus software to identify and eliminate viruses and other malicious malware that you may have downloaded to your computer involuntarily. As new viruses are continually being created, it is required that you update your antivirus software regularly.
  • Use anti-spyware software to detect and remove spyware applications which can accumulate various types of sensitive information, keep track of your browsing activity and interfere with the control of your computer.

Keep track of your account

  • Check your account balances and position on a regular basis through TWS and daily statements that are available in account management. Immediately report anything suspicious, free in the US at (877) 442-2757 or direct at (312) 542-6901.

Keep track of your account activity

  • Regularly check your account balances and positions through TWS and the daily statements available in Account Management. Immediately report anything suspicious to your MEXEM account manager.