Is there sth like [SIPC] law in LSE?

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Topic Author
Jing
Posts: 6
Joined: Wed Jul 03, 2019 10:07 am

Is there sth like [SIPC] law in LSE?

Post by Jing » Wed Jul 10, 2019 10:20 am

Hi
As we know that there is [SIPC] to pretect the investor in the US stock. And is there sth like [SIPC] in London Stock Exchange? And how can I confirm my broker is protected by it?

[Acronym corrected by moderator oldcomputerguy]

Tylenol Jones
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Joined: Mon Sep 14, 2009 6:54 am

Re: Is there sth like [SIPC] law in LSE?

Post by Tylenol Jones » Wed Jul 10, 2019 12:26 pm

If you have an account with a US-based [SIPC]-insured broker than all your holdings are insured no matter what exchange they are bought at. (At least this is what I was told by IB when I enquired shortly after opening an account with them many years ago.)

[Acronym corrected by moderator oldcomputerguy]

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Phineas J. Whoopee
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Re: Is there sth like [SIPC] law in LSE?

Post by Phineas J. Whoopee » Wed Jul 10, 2019 2:35 pm

Tylenol Jones wrote:
Wed Jul 10, 2019 12:26 pm
If you have an account with a US-based [SIPC]-insured broker than all your holdings are insured no matter what exchange they are bought at. (At least this is what I was told by IB when I enquired shortly after opening an account with them many years ago.)

[Acronym corrected by moderator oldcomputerguy]
It's important to note that SIPC insurance only applies to the first $500,000 worth of assets, of which no more than $250,000 in cash is covered.

SIPC insurance guarantees the presence of your securities should your broker fail, not their values. If you buy a share for $100, and its value drops to $1 then your broker somehow absconds with your assets, the SIPC will restore the share, not the $100.

PJW

Topic Author
Jing
Posts: 6
Joined: Wed Jul 03, 2019 10:07 am

Re: Is there sth like [SIPC] law in LSE?

Post by Jing » Wed Jul 10, 2019 7:04 pm

But if I use IB to trade in the LSE,in fact I trade in the IB(UK)company. Can it still be protect by SPIC which is in USA?

Tylenol Jones
Posts: 268
Joined: Mon Sep 14, 2009 6:54 am

Re: Is there sth like [SIPC] law in LSE?

Post by Tylenol Jones » Thu Jul 11, 2019 12:39 pm

Jing wrote:
Wed Jul 10, 2019 7:04 pm
But if I use IB to trade in the LSE,in fact I trade in the IB(UK)company. Can it still be protect by SPIC which is in USA?
You should open an account with their US branch, and double check with them that there is SIPC coverage for the account you want to open.

DXBinvest
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Joined: Sun Jul 07, 2019 2:42 pm

Re: Is there sth like [SIPC] law in LSE?

Post by DXBinvest » Mon Jul 15, 2019 6:53 am

Jing wrote:
Wed Jul 10, 2019 7:04 pm
But if I use IB to trade in the LSE,in fact I trade in the IB(UK)company. Can it still be protect by SPIC which is in USA?
From SIPC (found on another forum): "Interactive Brokers UK (IB UK) is a subsidiary of IB LLC, so it is not a SIPC member. If it failed, SIPC could not intervene to protect any investment it held in its custody for you. If you have an account with IB UK, you may still be eligible for some level of SIPC protection if IB UK acts as an introducing brokers which introduces your account to a SIPC-member clearing broker such as IB LLC. At the risk of oversimplification, the introducing broker provides front-end services, such as opening the account and taking your orders. The clearing broker provides back-end services, such as executing your orders and actually holding on to your investment. In other words, the clearing broker has custody of your investment, not the introducing broker. Because SIPC protects the custody of your investment, this clearing arrangement is important.

If IB UK is serving as the introducing broker and it fails, then SIPC cannot intervene, but your investment should still be in safe custody with the clearing broker (e.g., IB LLC). If the SIPC-member clearing broker failed, then SIPC would protect your account. You should check with Interactive Brokers UK or review your account documents to confirm whether Interactive Brokers LLC is the clearing broker, with Interactive Brokers UK as the introducing broker. From Interactive Brokers' website, it sounds like this may be the case, but because SIPC does not regulate the securities industry, we cannot independently confirm this arrangement. The securities regulator overseeing Interactive Brokers UK may also have more information about its clearing agreements and protections for your account."

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