IBKR Australia Account Types and Products Offerings

Interactive Brokers Australia Pty Ltd (“IBKR Australia”), which holds an Australian Financial Services License (“AFSL” No. 453554), is headquartered in Sydney and provides services to Australian clients. IBKR Australia clients, products and services have some unique characteristics when compared to the Interactive Brokers (“IBKR”) global account and product suite. The purpose of this document is to outline these characteristics of the IBKR Australia offering.

Account Types

IBKR Australia offers both cash accounts and margin accounts to all types of clients, including Individual / Joint account holders as well as trust account holders and corporate clients.

For Self-Managed Superannuation Fund (“SMSF”) account holders, IBKR Australia only offers cash accounts.

Natural Person v Non-Natural Person

Under IBKR Australia clients will be categorised as either natural persons or non-natural persons.

A natural person client would include individuals / joint account holders, as well as trusts with at least one natural person trustee. A non-natural person client would include corporate entities as well as trusts with only non-natural person trustees. Please note that with regards to IBKR Australia trust accounts, it is imperative to understand that if there exists individuals (natural persons) that are nominated as trustees in your account, then even if you have an additional corporate trustee, that trust itself would be considered a natural person trust. The difference between a natural person and non-natural person margin account can be significant as shown here.

Australian Regulatory Status

Under IBKR Australia clients will be classified as either a retail, wholesale or professional investor. All new clients of IBKR Australia default to being classified as a retail investor unless they produce the required evidence to enable IBKR Australia to treat them as a wholesale or professional investor.

Refer to this link for information regarding Australian regulatory status under IBKR Australia.

Please click here to download the wholesale investor booklet, and click here to download the professional investor booklet.

Cash Accounts

IBKR Australia offer three different types of cash accounts (i.e. accounts involving no borrowing of funds):

  • Investment account

  • Trading account

  • SMSF account (only available to Australian Tax Office regulated Self-Managed Superannuation Funds)

Investment Account: The IBKR Australia Investment account is a cash account that does not allow you to short securities or to borrow funds, i.e. your account cannot have a debit balance. Moreover, only a limited number of options strategies will be available (up to options level 3, see here for more details).

  • This account is not eligible for reduced intraday Futures margin.

  • This account is available for all clients except SMSF clients.

Trading Account: While this is also a cash account that does not permit you borrow funds, you will be permitted to short stock and trade any of the available option strategies (options level 1 through to 4, see here for more details) in the Trading Account, provided that you have the requisite trading experience and expertise, which is outlined here.

If you currently have an Investment Account, you can submit a change of account type to change to a Trading Account by logging into the Client Portal and clicking the User menu (head and shoulders icon in the top right corner) followed by Settings. Under Account Configuration, click Account Type. This may take 2-3 business days to review.

  • This account is available for all clients except SMSF clients.

SMSF: This is only available to SMSF clients. This is a cash account that does not permit you to short securities or to borrow funds, i.e. your account cannot have a debit balance. Moreover, only a limited number of options strategies will be available (up to options level 3, see here for more details).

Margin Accounts

IBKR Australia offers margin accounts (i.e. accounts that allow borrowing of funds to buy marketable securities) that will provide all clients excluding SMSF clients with the ability to create portfolios subject to the degree of risk taking/leverage allowed by IBKR Australia. Please note that margin accounts offered by IBKR Australia may be different from client to client depending on various factors. Please refer to this link for more information regarding margin accounts offered by IBKR Australia.

CFD Product Offering

As a client of IBKR Australia, provided that you have the requisite trading experience and expertise, which is outlined here, you will be able to trade all of exchange traded products available (including local and global stocks, options, futures, bonds, ETFs etc.) through our award winning trading platform and software.

In addition, IBKR Australia issue Contracts for Difference (“CFDs”) over global shares, indices, metals and FX. These are only available to IBKR Australia clients. For further information on IBKR Australia's products and services, please see our website.

Refer to this link for information on IBAU’s share CFDs.

Refer to this link for information on IBAU’s index CFDs.

Refer to this link for information on IBAU’s FX CFDs.

Please note that the Australian Securities and Investment Commission (ASIC) enacted new rules applicable to retail clients trading CFDs, effective 29 March 2021. Wholesale or Professional Investor clients are unaffected. Refer to this link for more information.

FX Offering

IBKR Australia can only support holding currencies in AUD, USD, HKD, EUR and GBP and you can convert between these currencies. If you have cash balances in currencies other than IBA supported currencies (AUD, USD, HKD, EUR or GBP) these will to be converted into your nominated base currency automatically without any commission charged 1 . Similarly, if an IBKR Australia client using a margin account has any positive or negative cash balances (if permitted) outside of the 5 supported currencies, it will be automatically converted to base currency by day end, once again this is without any commission charged 1.

IBAU clients, when permissioned, can trade in any market available across the IBKR network, even when the financial instruments are quoted in currencies outside the 5 supported currencies above. However, upon your instruction for any market outside the 5 supported currencies, IBKR Australia will automatically execute foreign currency conversions to ensure non-supported cash balances are cleared. Once again this is without any commission charged 1.

For example, if an IBKR Australia client wishes to buy JPY denominated securities, as long as the client has sufficient available funds (for a cash account) or sufficient equity (for a margin account), the trade is permitted. To settle the trade, IBKR Australia will convert the existing cash balances into JPY. Similarly, if the same client wishes to sell their JPY denominated securities, IBKR Australia would automatically convert the JPY proceeds to the base currency by day end, once again leaving no residual JPY cash balances. Once again, these automated FX conversions are executed without any commission charged 1. To illustrate the impact to any IBKR client transaction in a currency that requires an FX conversion compared to many of IBKR Australia’s competitors, please, click here.

IBKR Australia clients, when permissioned, may also initiate foreign currency conversions in any of the 5 supported currencies. These conversions are charged a small commission (see here for more details) using an FX rate without any additional markup.

 

Stock Yield Enhancement Derivatives Program (“SYEPD”)

IBKR’s Stock Yield Enhancement Derivatives Program (“SYEPD”) allows wholesale and professional clients to earn extra income in their IBKR account. The client will need to agree to lend IBKR Australia their shares and in exchange IBKR-Australia will deposit cash collateral into their IBKR account and pay the client a return that is broadly equivalent to the revenue that may be earned were IBKR Australia to on-lend the shares, less IBKR Australia’s fees .1 IBKR Australia’s fees will be 50% of the revenue that could have been earned if the client’s shares were onward lent (unless otherwise agreed by the client explicitly in writing). Granting authority to IBKR-Australia to enter into SYEPD does not limit the client’s ability to sell their shares whenever they like and the client may withdraw their authority to participate in SYEPD at any time. Other eligibility criteria may apply.

To sign up to the IBKR Australia SYEPD program, log into the Client Portal, click the User menu (head and shoulders icon in the top right corner) followed by Settings. Under Trading, click Stock Yield Enhancement Program Derivatives.

Click here for more details on the SYEPD program.

ASX24

In order to ensure continued compliance with our regulatory obligations, IBKR Australia will NOT accept any other form of collateral except cash for the purposes of determining whether you can trade or hold ASX24 products. If the margin requirements of ASX24 products cannot be met using cash, your account will be subject to automated liquidation.

 

Other

• For a full list of the disclosure documents and legal terms which govern the services IBKR Australia will make available please refer to our website.

• For further information on IBKR Australia, click on our Financial Services Guide.

• For more information or assistance, please contact our Investor Services.

• Please note this information is general in nature, meaning it does not take into account your objectives, financial situation or needs. Consider consulting an independent financial and/or tax advisor before making an investment decision.

 

1IBKR’s typically adds or subtracts (at its discretion) 3 basis points or 0.03% to the FX rate that would otherwise apply for the automated currency conversion service.

2IBKR Australia acts as principal when it issues SYEP Derivatives to eligible clients.