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Interactive Brokers - experiences and opinions

  • #741
  • May 2, 2016 1:02am May 2, 2016 1:02am
Quoting NorthTrader
Just done my first third party withdrawal from IB. Bloody hell, what a drama! It was only EUR200 to a bank in Barcelona, but I can't believe the number of security hoops I had to jump through before they would authorise it. Really not sure if this is a good thing or not So, if you're planning on doing any third party withdrawals with IB then give yourself plenty of time... and patience!
Third party withdrawals?

I thought under AML/ATF rules that 3rd party withdrawals have been outlawed.

Deposits and withdrawls have to go back through the exact bank account.

Well if you have found a loop hole good luck
  • #742
  • May 2, 2016 1:13am May 2, 2016 1:13am
It's shocking that a broker of good repute..like IB can allow 3rd party withdrawals.
practising coitus interruptus
  • #743
  • May 2, 2016 1:44am May 2, 2016 1:44am
Why wouldn't it be allowed? It's my money in my account, and I can send it to whoever I like! Certain IB account types don't allow it though, so maybe that's what lasty is thinking of.
You reap what you sow.
  • #744
  • May 2, 2016 1:55am May 2, 2016 1:55am
Quoting NorthTrader
Why wouldn't it be allowed? It's my money in my account, and I can send it to whoever I like! Certain IB account types don't allow it though, so maybe that's what lasty is thinking of.
Hi NT, I hope you don't mind me asking.. How long did it take to eventually do the transaction ?
Memories caught in time but never forgotten
  • #745
  • May 2, 2016 6:59am May 2, 2016 6:59am
Quoting j4d
{quote} Hi NT, I hope you don't mind me asking.. How long did it take to eventually do the transaction ?
Sure ja, the authorisation process took four working days for me, and consisted of several emails and phonecalls. After that it takes between one and four working days for the funds to arrive. So altogther you should probably allow eight working days to be safe.

I should mention that I was unlucky to mess up at least one of my security questions on the phone (I think it was the shoe size one ) and had to send them a scanned copy of my passport as further proof. But I was away at the time and couldn't send it until one working day later. After that there was another phonecall with a different security question (this time no problem ), and then it was OK. So it took one extra working day because of that.

It was also my first ever third-party withdrawal. Hopefully it will be smoother next time.

Cheers,
NT
You reap what you sow.
  • #746
  • May 2, 2016 7:25am May 2, 2016 7:25am
Quoting NorthTrader
{quote} Sure ja, the authorisation process took four working days for me, and consisted of several emails and phonecalls. After that it takes between one and four working days for the funds to arrive. So altogther you should probably allow eight working days to be safe. I should mention that I was unlucky to mess up at least one of my security questions on the phone (I think it was the shoe size one ) and had to send them a scanned copy of my passport as further proof. But I was away at the time and couldn't send it until one working day later....
Thanks for taking the time to answer NT..
Memories caught in time but never forgotten
  • #747
  • May 2, 2016 2:36pm May 2, 2016 2:36pm
Quoting NorthTrader
Why wouldn't it be allowed? It's my money in my account, and I can send it to whoever I like! Certain IB account types don't allow it though, so maybe that's what lasty is thinking of.
You should update your knowlegde of anti money laundry regulations!

Regards
  • #748
  • May 2, 2016 6:35pm May 2, 2016 6:35pm
Quoting Forex37
{quote} You should update your knowlegde of anti money laundry regulations! Regards
Yes, I think I will. I guess I'm being too naive about it. I can easily transfer money to an international account from my banks in the UK, and from my banks in Japan, and even from my offshore accounts in the Isle of Man - so why wouldn't I be allowed to do so from my brokerage account in the US?

I'm pretty sure IB aren't doing anything illegal though, so maybe we should all update our AML knowledge!

I'll post back after digging a little deeper (but please don't rely on my info alone).
You reap what you sow.
  • #749
  • May 2, 2016 9:58pm May 2, 2016 9:58pm
Anti-Money Laundering Regulations

I've had a quick look on the internet and tried to digest the wealth of information on international anti-money laundering regulations. It's pretty complicated, and varies by country, but my conclusion is that there is nothing illegal about sending money overseas to a third party, provided that the sending institution complies with the necessary laws. In practice this means following a process called Know Your Customer (KYC), and recording every financial transaction for future inspection. KYC basically involves the rigourous identification of your customer (security questions, passport scans, proof of address, etc.), keeping track of their activities, and reporting anything unusual to the authorities.

This explains why the IB authorisation process is so rigourous! And also why many brokers don't allow third-party withdrawals. It would be a lot of hassle and expense for them so they simply refuse to do it. Personally I think IB should be applauded for their flexibility on this

Here are some links if anyone requires further reading:

Wikipedia's pages:
https://en.wikipedia.org/wiki/Money_laundering
https://en.wikipedia.org/wiki/Know_your_customer

UK government's page:
https://www.gov.uk/guidance/money-la...s-introduction

US Patriot Act:
https://www.fincen.gov/statutes_regs/patriot/

CFTC's page:
http://www.cftc.gov/IndustryOversigh...ring/index.htm

IB's instructions for third-party withdrawals:
https://www.interactivebrokers.com/e...hird_party.htm

Please feel free to add more information or contradict anything I've said. Clearly I am not an expert on this!
You reap what you sow.
  • #750
  • May 3, 2016 5:45am May 3, 2016 5:45am
Quoting NorthTrader
Anti-Money Laundering Regulations I've had a quick look on the internet and tried to digest the wealth of information on international anti-money laundering regulations. It's pretty complicated, and varies by country, but my conclusion is that there is nothing illegal about sending money overseas to a third party, provided that the sending institution complies with the necessary laws. In practice this means following a process called Know Your Customer (KYC), and recording every financial transaction for future inspection. KYC basically involves...
decent sum up
  • #751
  • May 3, 2016 8:12am May 3, 2016 8:12am
I would think IB has a pretty big and well funded Compliance department and the last thing a Compliance officer likes is hassle when it can be easily avoided. So if they offer 3rd party payments you can bet it's Ok re the Regulations.

My understanding of the matter is for most brokers one can only pay/deposit money from a designated account. So Joe Bloggs designates his London HSBC account (number 1008745) and that's the only one allowed for money in or out.

But IB will accept/repay money to any bank account in the world as long as the name is the same as on the account. So Joe Bloggs can send cash to IB from an HSBC account in London called Joe Bloggs and then IB can send money to Joe Bloggs's account at Standard Chartered in Hong Kong for example.

But to pay money from an IB account to a true 3rd party like Susan Smith in Aus (from Joe Bloggs), that wouldn't be allowed as then it would be easy to launder money to a certain extent.

I stand to be corrected though.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #752
  • May 3, 2016 9:28am May 3, 2016 9:28am
Quoting Calculus
But to pay money from an IB account to a true 3rd party like Susan Smith in Aus (from Joe Bloggs), that wouldn't be allowed as then it would be easy to launder money to a certain extent. I stand to be corrected though.
Thanks for the info, Calculus. However, the bolded statement above is exactly what I did. Except the names and country were different of course!

Yes, it could be construed as money laundering but it was only a small amount (about EUR200), and it's first and last time I'll probably have to do it. So in that context they'd be crazy to think I was a money launderer.

It's all about the context, as far as I can gather. And you're right, they're so big on security and compliance it's inconceivable that they wouldn't know the rules, or try to break them.
You reap what you sow.
  • #753
  • May 3, 2016 11:24am May 3, 2016 11:24am
The average IB account-size is $125K. Much higher than the average retail FX account. I suppose thats one of the reasons IB jumps (or economically can jump) through the AML hoops for their clients while the others don't.
  • #754
  • May 4, 2016 2:19am May 4, 2016 2:19am
Quoting NorthTrader
{quote} Thanks for the info, Calculus. However, the bolded statement above is exactly what I did. Except the names and country were different of course! Yes, it could be construed as money laundering but it was only a small amount (about EUR200), and it's first and last time I'll probably have to do it. So in that context they'd be crazy to think I was a money launderer. It's all about the context, as far as I can gather. And you're right, they're so big on security and compliance it's inconceivable that they wouldn't know the rules, or try to break...
I said I was there to be corrected and I was!

Interesting that they would allow clients to do this.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #755
  • May 4, 2016 4:36am May 4, 2016 4:36am
Quoting shrike
The average IB account-size is $125K. Much higher than the average retail FX account. I suppose thats one of the reasons IB jumps (or economically can jump) through the AML hoops for their clients while the others don't.
i m not a fan of IB but i never had any issue with withdraw, i actually withdraw £24K few days ago (also i m from UK so it might be why)
  • #756
  • May 6, 2016 4:50am May 6, 2016 4:50am
Why Interactive Brokers doesn't provide 50% deposit bonuses like many other brokers?
  • #757
  • May 6, 2016 5:08am May 6, 2016 5:08am
Quoting Borowikbo
Why Interactive Brokers doesn't provide 50% deposit bonuses like many other brokers?
Because no proper broker offers bonuses, only the bucket shops.

It's a great litmus test, if you're interested in a broker and it offers bonuses, you're probably being setup (somehow).
Road To Wisdom? To err and err and err again, but less and less and less...
  • #758
  • May 6, 2016 5:17am May 6, 2016 5:17am
Almost all br000kers on this page http://www.forexfactory.com/brokers.php offer bonuses. So it means majority of them have some evil plan with me to get my money?

I am currently on the demo and have started to look for a broker where to open LIVE account. I have started to get a feeling I am getting myself involved in not some real investment industry but in some sort of gambling industry where I have to start dodging the bullets that can effectively come from any side.
  • #759
  • May 6, 2016 5:30am May 6, 2016 5:30am
I'm not saying there's an evil plan, nevertheless, brokers who offer bonuses are after attracting a certain type of client. Brokers who don't offer signup bonuses are also after attracting a certain type of client.

Both are good business models, just depends what type of brokerage business you want to build.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #760
  • May 6, 2016 5:43am May 6, 2016 5:43am
Quoting Borowikbo
Almost all br000kers on this page http://www.forexfactory.com/brokers.php offer bonuses. So it means majority of them have some evil plan with me to get my money? I am currently on the demo and have started to look for a broker where to open LIVE account. I have started to get a feeling I am getting myself involved in not some real investment industry but in some sort of gambling industry where I have to start dodging the bullets that can effectively come from any side.

Interactive broker is the rolls royce of the broker, i had to deposit a minimum of 10K when i did open my account (they might have lower it nowdays) but they spreads r so good that you ll make more money than you have got if you had signup to a broker offer bonuses.

IAs i mentioned in the past , i hate their costumer service but the rest is ok
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