About Interactive Brokers.
Interactive Brokers conducts its broker/dealer and proprietary trading businesses on over 100 market destinations worldwide. In its broker dealer agency business, IB provides online trade execution and clearing services to institutional and professional traders for a wide variety of electronically traded products including stocks, options, futures, forex, bonds, CFDs and funds worldwide
IB recently slashed the brokerage charges in India and the new pricing is in line with other leading discount brokers of the country.
Compare Brokerages had an interaction with IB and were able to ask pertinent questions on behalf of the Indian Investor. Hope you find the Q&A helpful in choosing your next broker.
1. How does an Indian citizen open an account with you?
An Indian citizen can open an account with Interactive Brokers for trading on
Indian and overseas markets (120 markets across 24 countries). One account is
opened with Interactive Brokers LLC that provides them access to a cash account
and allows them to purchase equities and Exchange Traded Funds around the
world. The other account is opened with Interactive Brokers (India) Pvt Ltd and
allows them to have access to the National Stock Exchange of India (NSE) to trade
stocks, options, futures and currency futures. The process to open the global
markets account is 100% online. You need to complete an online application and
submit scans of your pan card and address proof. The local markets application is
also filled out online. In addition, clients sign some physical documents.
2. What are all the exchanges/ segments one can trade on your platform?
Global – 120 markets across 24 countries for stocks and ETFs.
See the exchange list here.
India – NSE for trading on stocks, futures, options, currency futures.
See the product list here.
3. Is there any charge to open an account with Interactive Brokers?
No
4. What is usually the time taken to open an account?
For global markets anywhere between 1-3 business days. For local Indian
markets, anywhere between 5-8 days.
5. Is there any Annual Maintenance Charge?
Monthly minimum activity fee of US$ 10 for global markets, waived for those
whose account sizes are more than US$ 100K and waived for all clients for the
first three months.
Monthly minimum activity fee of INR 200 for Indian markets, waived for those
whose account sizes are more than INR 10 lakhs and waived for all clients for the
first three months.
6. Do you provide margin funding? Can one pledge shares for margin?
Yes, on NSE we do provide margin funding for stocks as per SEBI regulations.
7. How does Fund transfer/ Withdrawal work? What is the time taken for the
same?
Global – International Wire Transfer under the Reserve Bank of India’s liberalised
remittance scheme, which allows every Indian resident to wire up to US$ 250,000
per financial year (This is subject to change by the RBI).
India – Cheque / NEFT / RTGS – Time to arrive is from 1 – 4 business days.
8. How big is your team in India?
Interactive Brokers has more than 65 employees based in India. Interactive
Brokers Group employs more than 1,000 people globally.
9. What channels of are available?
Our customer support number and details of support services are available here.
Interactive Brokers offers 24-hour weekday customer service via regional Client
Services located around the world. In addition to a wide range of answers
available online, we offer client services via phone, chat, email, fax, mail.
10. What platform and tools will be available for our Indian users? Is there a demo
available?
Our platform and tools are available here.
Interactive Brokers offers the web trader, mobile trader and Trader Workstation
(TWS), a global trading system which let you use a suite of online trading tools.
A free trial is available here.
There is no commitment and you can use the free trial for as long as you want.
11. Is there any charge for data on your platform or any charge associated with
technology/tools.
One of the things that sets Interactive Brokers apart is the broad range of
technology and tools the company provides for free. IB also offers information
from numerous research and news services at no cost.
A list of free research and news services can be viewed here
IB also provides other information sources via subscriptions.
Those can be viewed here.
For those that trade the NSE, there is currently no charge for NSE data.
12. Since your primary market has been institutional sales, how does IB plan to
pivot towards attracting retail participants?
We have been building online trading technology for more than 40 years and
provide competitive pricing, a broad global product line, and advanced trading
tools for our clients. Our new, lost cost pricing for the Indian markets world class
technology and breadth of products, is attractive to retail participants. As we do
globally, we believe that our customers will bring in more customers in India as
well.
13. At comparebrokerages we publish the financials of brokers so that our
customers are aware of the financial health of a broker – IB financials show that
they have a very active prop trading, with over 100 crores in profits. Curious to know who is trading, are these through traders in India or abroad? and finally,
does this put risk to retail clients?
Interactive Brokers June 2016 metrics and other financial information can be
viewed here
We do not comment specifically on our proprietary trading business.
As you are aware, most brokers in India have their proprietary trading along with
client trading. SEBI has already set regulations protecting the clients’ interest and
we respectfully comply with them. We can say that is there is a clear segregation
of proprietary and client trading activities.
