@kilyn that is wrong! IBRK UK is an introductory broker for IB LLC. Excluding futures or options on futures for US exchanged securities you are covered by SIPC. I got that confirmation from IB Support and I’ve also found documentation in the IB website confirming it.
I am not wrong. There is no SIPC protection in the UK. Period. UK’s scheme is FSCS with far less generous limits.
Some client assets at IB UK may or may not also be covered by SIPC in the US, but the deciding factor for non-US brokers is not the country. Hence my reply that I don’t see how your alleged change from UK to LU would significantly alter the relationship with SIPC.
If they continue keeping your assets at the US entity, yes, they probably should be covered. Then again, you’re trusting the broker at their word that they do so and what if they don’t - you don’t have one of the key benefit of SIPC of protecting against broker fraud, in neither country. Sorry to take you rose tinted glasses off but you’re putting more faith into SIPC than you should.
FWIW you can rejoice that you’re still doing better than people invested with swiss brokers - there’s no securities protection scheme whatsoever here
@kilyn alright exactly! I think we are trying to explain the same by different words. The only thing I’m worried about is that for the IBRK UK they have that explanation public and detailed while for IBRK Luxembourg they haven’t that information public which worries me a little bit. Even if in both cases I’ll have to trust the brokers word I’ll be better by having them publicly claiming it. Maybe I’m trusting SIPC more than I should but my portfolio is larger than 100k and I’m investing for the long term, so in case I have the chance to choose I’ll try to be covered by an institution that proven to be able to work more than one time already.
Publicity of information unfortunately does nothing in the case of broker fraud. Only whether they deposited the securities with US entity or not.
In case of broker fraud I’m afraid your stocks they showed you had in your account might not exist anywhere, including the US, so there would be nothing for SIPC to cover. Only in the funny case of the US entity defrauding its UK / LU entity maybe would you get something, but c’mon.
If SIPC and its insurance against broker fraud is really that important to you, find a US-only broker.
That’s a bank not a broker. In the US brokerages and banks are always different legal entities. A US brokerage would not provide you with a US bank account. Its affiliated bank (if it has one, e.g. Schwab and Schwab Bank) might, but not the brokerage.
Client assets are supposed to be segregated from firm’s assets, both in UK and US. So firm’s insolvency in principle should not endanger cash in your account, it should be safe from its creditors. But of course as broker approaches default they may play dirty and grab onto client money and comingle it with own assets, c.f. MF Global bankruptcy