Interactive Brokers: Changes in currency conversion for Cash accounts in April 2024

Recurring investments already work that way. It does facilitate ’ buy the dip’ or limit orders in general without having to convert in advance. So it adds more flexibility.

Just got an email from IBRK saying the above. Did others get it too? Surely there must be a mistake, because April 26 is TODAY!?

Nothing in my inbox from IBKR apart from the “Annual Cost and Charges Statement”.

I don’t even know what is the “Carried Agreement” and why it is important (also Google doesn’t return much).

Got it, too. Relevant section:

“Interactive Brokers amended the terms of the Client Agreement to reflect the roll out of an automatic currency conversion functionality (“AUTOFX ”) for cash accounts (i.e. accounts that are not margin enabled). In addition, Interactive Brokers have made minor clarificatory updates to the Client Agreement.”

Do you even use AUTOFX?

Or are you just upset they can announce new terms the day they become relevant?

Not trying to be flippant, but I’d be willing to bet that in the fine print of the terms and conditions you already agreed to, they state that they can do this.

I should maybe amend that AUTOFX is typically used for hedging. The company I work for uses it with some of their brokers for automated hedging of hedged share classes in other currencies.

It’s something the company and the portfolio managers typically prefer (as they otherwise have to do it manually, which is error prone and usually comes with worse FX hedging conditions).

Got it as well. Maybe it has something to do with what happened some days ago with the other email I posted.

Upset is a strong word, but I find it incredible to announce a change the same day. They might as well omit the section Continuing to maintain an account with us after 26 April 2024 shall constitute your acceptance of the Client Agreement as amended.


No idea what that is :smiley: but according to the email it affects cash (i.e., not margin-enabled) accounts, so it probably does not even affect me. Again, just surprised about the timing.

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Indeed, it’s only for cash accounts.
Here is the relevant part:

A2.3 Automatic Currency Conversion Functionality (AUTOFX) of Cash Accounts
A2.3.1 If you incur an obligation in a cash account (i.e. a cash account opened with IBUK that is not enabled for margin trading) in a
currency as a result of a purchase denominated in such currency (the “Purchase Currency”), and if insufficient funds exist in
the account in that currency, IBUK will automatically convert the necessary amount of your long currency balance(s) to the
required amount of the Purchase Currency for settlement by the same date as the date on which the purchase settles.
A2.3.2 IBUK will effect each automatic currency conversion at a rate derived from prevailing market conditions at the time of the
execution (i.e., for the purposes of AUTOFX, IBUK will engage in “spot” currency transactions on your behalf). The conversion
rate set by IBUK for automatic conversions may be adjusted from the rate that otherwise would apply to compensate for
differences between the agreed settlement cycle for the trade and the standard settlement cycle for that currency pair. The
fees IBUK applies for automatic currency conversion trades are detailed on the Pricing section of the IBUK website.
A2.3.3 AUTOFX does not apply to (i) funds received into your cash account where those funds are in a currency supported by IBUK
(however, you can manually convert those funds into another currency if desired) or (ii) to margin accounts (however, you can
manually enter currency conversion orders on your margin accounts). However, if, you receive funds into your cash account
which are in a currency that is not supported by IBUK, AUTOFX will apply to those funds.
A2.3.4 If you do not wish for AUTOFX to be applied in respect of your cash account, you will need to determine what amount
of Purchase Currency is required to execute your buy order and have sufficient settled funds in that Purchase
Currency before placing any order. If you do not do so, funds will be automatically converted in the manner set out
in this Section


That would be in line with how (at least) institutional broker clients use it with hedged share classes and associated cash accounts.

The broker/bank hedges your position in the non-base currency of the fund/ETF based on a set of rules automatically, and ideally with better spot exchange conditions, versus you managing those hedges yourself.

So, probably (a) nothing you as a retail investor care about much and (b) basically a new / extended product offering IBKR wants to announce to their customers? (And you as an existing customer, retail or not, are informed about)

Have to wonder: if you hold several different currencies, how do they choose which one(s) to auto-convert to perform the trade?

Also mind that the 0.03% commission they charge for this service can be significantly higher than the $2 / 0.002% they charge for manual conversions, particularly for large trades. For trades less than $6,666 however, the 0.03% commission ends up being less than the $2 min commission on manual conversions…

Good question, so far I always only had one other currency so the issue didn’t came up…
I only use the automatic conversion by now, since my regular orders are <6666.

I guess few people will want to automate regular >6666$ orders, so I feel like its actually very cool upgrade. I’m not so used anymore to get better deals at online services over time. Usually they become shittier/more expensive (Netflix,…).

So if you get 10000 USD of an ETF you either:

  • exchange it earlier and pay 2chf ( higher than 0.2 chf)
  • let them exchange and pay 3chf.

1chf difference. BUT.

  • you have to login earlier to do the exchange
  • the exchange rate might fluctuate in the “wrong” direction.

All in all I’m not sure it’s worth even if you buy more than 6k USD of stocks or funds.


You even have to wait 2 days for settlement, otherwise auto fx makes back and forth transactions as mentioned by others.

Can anyone confirm that nothing changes for margin accounts?
Haven’t bought anything in a while…