LYNX collaborates with Interactive Brokers (IBUK) which is located in the United Kingdom. Via LYNX you have access to IBUK’s order executions, where you currently hold your investment account. In preparation of a potential (hard) Brexit, we anticipate a number of changes from Interactive Brokers Group (IBKR) with regard to our services to European clients before or after the end of the current Brexit transition (31st of December 2020).
IBKR has expanded its European activities through the following three entities: Interactive Brokers Ireland Limited (“IBIE”), Interactive Brokers Luxembourg SARL (“IBLUX”) and Interactive Brokers Central Europe Befektetési ZRt (“IBCE”). As part of our Brexit planning, investment accounts held by EU customers with IBUK are expected to be migrated by IBKR to IBLUX or IBIE within the foreseeable future.
Migration to IB entity within the EU
IBKR has established Interactive Brokers Luxembourg SARL (“IBLUX”), which was licensed in November 2019, but with constraints on the permitted scale of its business. In addition, IB is in the final stage of obtaining a license from the Central Bank of Ireland (CBI). It is expected that this process will be finalized soon, whereupon investment accounts can be migrated in a short period of time. You will be informed about the exact timing of the (expected) obtainment of a license with the CBI.
We want to make our clients aware that in the event of a hard Brexit we may not be able to migrate investment accounts to an IB entity within the EU in time, restrictions may apply after December 31, 2020 on submitting new orders and transferring positions and/or funds to the investment accounts.
If these restrictions do occur and you wish to avoid them, we advise you to be prepared early to transfer your investment account and positions to another broker of your choice. We will cooperate at all times and will keep you informed if it becomes certain that restrictions are going to occur.
Follow-up steps migration
At this moment, no further steps are required from you in the migration process. In a following message, we will communicate more details regarding the migration of your investment account and, if applicable, ask for your approval to have the investment account migrated by IBKR to one of the European entities.
It is therefore important to keep a close eye on the communication from LYNX and IBKR about the migration process in the coming weeks.
The migration process from an IBUK investment account to an IBKR account in the EU takes two days from start to finish. However, the functionalities on your account will only be limited by a maximum of 15 minutes, which is scheduled outside of regular trading hours. The actual migration process is fully automated by IBKR and is initiated after a client has granted approval through the administrative section of the investment account. A migration does not affect the positions on the investment account and all account settings remain the same.
1. Preparation for migration
In preparation, your current investment account at IBUK will be replicated at IBIE or IBLUX. All settings and login details will be taken over so that the migration is possible in a very short period of time.
2. Permission for migration
You will be informed of the contractual and operational changes and subsequently asked to authorize the migration in the administrative section of your investment account.
3. Synchronization for migration
An internal control takes place after which the current investment account is synchronized with the new account. Then the new account is activated.
4. Transfer positions and funds
All your positions and cash will be transferred from the current investment account to the new account. After a successful migration, your old account will be closed under IBUK. The account will still be available for viewing and downloading statements.
5. Completion migration
After the migration is completed, an internal check takes place to verify a successful migration of your account.
From the initial update on the Brexit planningto the completion of the migration to IBLUX or IBIE, we continuously inform our clients. It is therefore important to keep a close eye on the communication from LYNX and IBKR about the migration process in the coming weeks. Below we provide insight into the different moments when LYNX will inform you.
1 Initial notification
Brexit planning – Initial update
You have been informed of the organizational changes within the framework of the Brexit planning, where the aim is to have accounts held at IBUK migrated by IBKR to one of its entities in the EU. Read the initial update here.
2. Notification of migration process
Brexit planning – Notification of migration process
You have been informed of the most recent developments in planning. In addition, insight is given into the operation of the migration process and the consequences for your investment account.
3. Approval of migration
Brexit planning – Approval to migrate your investment account
You will receive the details of the migration and you will be asked for approval to migrate your account to IBLUX or IBIE after signing the new agreements.
4. Migration process
Brexit migration – The migration process
After you have given permission for the migration, you will receive a notification with the start date of the migration process and more information about when the functionalities on your account may be limited by 15 minutes.
5. Welcome letter
‘Your new investment account’
After the successful migration of the account, we welcome you to the new IBKR entity and again give you insight into all the differences. You will then be asked to log in to the administrative section of the account before it can be used.
Since its founding LYNX in 2006 has offered its services through the United Kingdom based Interactive Brokers (IBUK). LYNX receives orders and passes them on to IBUK. Your cash and positions are therefore held on a investment account with IBUK.
Why does LYNX cooperate with Interactive Brokers?
LYNX clients have, thanks to the cooperation with Interactive Brokers, access to IBUK’s order execution of IBUK, which connects up to 125 exchanges in 31 countries. On most exchanges, clients can invest directly in shares, options, futures, leveraged products, bonds, commodities, ETFs and CFDs. In addition, clients have access to 22 different currencies.
IBUK has a very advances order routing system (SmartRoutingSM), which is connected to a large number of exchanges and markets. With this technology, the various stock exchanges are scanned and the order routing based on the best market, based on execution price, speed and total cost of execution. As a result of this SMART routing, clients get faster and better order execution.
In short, thanks to the cooperation with IBUK, LYNX is able to let its clients trade worldwide using the most advanced infrastructure.
What is the impact of the migration on the protection of your investment account?
At the moment, your investment account at IBUK is legally composed of three different segments. This account structure allows you to trade in all kinds of financial instruments all over the world. The custody and protection of your funds and positions depend on the segment of the account. As a result, in the event of an unforeseen bankruptcy, you will fall partly under the US Securities Investor Protection Corporation and partly under the UK Financial Services Compensation Scheme. For more information see www.lynx.nl/service/bescherming.
With the new IBKR entities, both IBLUX and IBIE, the account only consist of a single segment. Within this segment, all your funds and securities are held and protected. Depending on the entity to which your account is migrated, either the Luxembourg (Système d’indemnisation des investisseurs) or Ireland (Investor Compensation Scheme) will apply. The investor compensation schemes of both Luxembourg and Ireland reimburse up to a maximum of EUR 20.000.
LYNX cooperates with IBUK in order execution and holding investment accounts for clients. Currently IBUK makes use of the so-called European passport, with which the services can also be offered on the European mainland with permission. We expect that, in case the Brexit transitional period has ended and no deal has been made between the United Kingdom and the European Union, IBUK will no longer be able to use the passport. In concrete terms, this means that as of January 1, 2020 it is expected that IBKR has to make some changes regarding the applicable legal entity to where your account possibly will be migrated.
Clients affected by the migration plan include EU residents or business accounts opened in a country that is part of the European Union. These accounts are currently served by Interactive Brokers (U.K.) Limited (“IBUK”).
As soon as we are ready to migrate your account, you will receive a message asking you to log in to the administrative section of your account. As soon as you log in, you will be provided with the necessary disclaimers and the customer agreement after which you can electronically agree to the migration of your account. Clients who do not respond to the initial email will receive a number of reminders.
If you do not consent to the migration of your account to the designated IB entity in the EU, your account may be restricted from submitting new orders and transferring positions and/or funds to your account. Of course, you also have the possibility to transfer your account and positions to a broker outside the IBKR group at any time.
If you do not respond to our request for approval, your account will eventually be subject to the same trade and transfer restrictions as if you decided to not approve the migration. In addition, your account will remain subject to the terms of your current agreement (including fees and margin policy) until is it migrated to a designated EU Broker, transferred to a broker outside IBKR , or closed.
Transactions executed by you, after the account migration has taken place, are covered by the new customer agreement between you and IBLUX or IBIE (depending on which entity your account is migrated to). A copy of the new Customer Agreement will be shared with you online, whereupon you will have the opportunity to approve the migration of your account.
Currently, your assets are protected against loss under the UK Financial Services Compensation Scheme and the US Securities Investor Protection Corporation (see https://www.lynx.nl/service/bescherming/) for more information. Following the migration of the account, the Luxembourg or Irish investor compensation scheme will protect your assets against loss in the even that IBLUX or IBIE defaults and is unable to meet its obligations towards you.
Both the Luxembourg and Ireland investor compensation scheme reimburse up to a maximum of EUR 20.000.
The current expectation is that most of the products that can be traded on the IBUK account will also be offered by IBLUX and IBIE. However, there are a number of limitations in case your account is hosted by IBLUX. The following products are not supported by IBLUX
- OTC Precious metals
- OTC Metal futures
In addition, IBLUX does not offer the possibility to trade with a leverage in foreign currencies or to participate in the Stock Yield Enhancement Program, which is currently available to you. Finally, clients resident in Luxembourg are excluded from trading bonds. We will inform you personally in case the latter applies to you.
If you have provided IBUK/IBLLC with securities with an advanced payments or as collateral, it will be transferred to IBLUX or IBIE at the time of migration of your account. We do not expect you to have to take any actions to implement the beneficiary change. However, it is possible that IB goes through some administrative steps to update the securities registers as a result of this migration. However, this does not directly affect your account.
First of all your positions will be transferred. Accruals, such as accrued dividends or interest, follow at a later point in time after they have been converted into cash. Your current account will be closed one all your positions, including accruals, have been transferred to the account that has migrated. Once closed, the account will no longer be accessible for trading purposes. However, the account will remain accessible via Account Management for administrative purposes, such as requesting historical statements.
After the migration, the settings of the account are identical to the settings of your current account, to the extent permitted by laws and regulations. This included matters such as margin capacity, price data, additional users and alerts. In a limited number of cases, an account will be migrated to a jurisdiction where the range of products cannot be fully offered. Clients holding positions that are subject to these restrictions may hold or close these positions but won’t have the ability to increase these positions.
No, your username, password and any form of two-factor authentication active for your account will remain active after the migration. However, you will be assigned a new account number.
Yes, the migration does not affect the software you use to trade or manage your account.
No, open orders won’t be transferred to the new account. After the migration, LYNX sends clients an overview of (any) orders that are no longer active as a result of the migration. Clients can then submit the orders again in accordance with their trading intentions.
Currently, accounts at IBUK are, for a large number of financial instruments, subject to the U.S. Pattern Day Trading (PDT) rule as the accounts are introduced to the U.S. affiliate IB LLC. The PDT rule limits accounts with an equity of less than 25.000 USD (or an equivalent in another currency) to a maximum of 3 day trades within a period of 5 business days.
Since accounts at IBLUX and IBIE will no longer be introduced at IB LLC, accounts will no longer be subject to the PDT rule.
Yes, the migration does not affect the cost base of your positions.
There will be not significant changes to the way your personal data is processed and protected after the migration of your account to IBLUX or IBIE. There are no material differences in this respect between holding an account with IBLUX or IBIE and IBUK.
No, you will receive an annual statement for your current account for the period from 1 January 2020 until the migration date and a second annual statement for your new account for the period starting on the migration date until 31 December 2020.
No, commissions and fees remain unchanged and do not depend on the broker (IBLUX or IBIE) where your account is held. If your account has migrated to IBLUX, the Stock Yield Enhancement Program will no longer be available and therefore you will no longer receive a fee for securities lending.
No, there are no cost related to giving your consent and also none to the migration of your account to the new entity.