I currently have a small us brokerage account with Commsec but I am looking to change due to the high commissions that Commsec charge for US trades.
The reason why I have persisted with Comsec is that is that I know Comsec and it makes me feel secure. I don’t mind using alternative brokers for Australian shares because Chess offers me some sort of security.
I would like to know if there is an equivalent to chess sponsorship for US shares. i.e. if a US broker goes into receivership is there a possibility of losing everything in my portfolio plus the contents of my cash account?
Two US brokers that I am looking at are Interactive Brokers or Schwab. I would appreciate any feedback or thoughts.
Thank you Phillip.
That is very helpful.
I have one further question. I read on Redit that IB does not have SIPC protection for Australians. Is that not the case?
To be sure you should enquire with your preferred brokerage.
When I was with IB, there was a concern with the amount of rehypothecation that they were doing. I got over that, but closed my accounts for other reasons. Most brokers probably do the same.
Questions about residency and citizenship status and SIPC protection
Are non-residents of the U.S protected by SIPC? What about non-U.S. citizens?
Non-residents and non-U.S. citizens are eligible for the same protections from SIPC as all other customers. There is no requirement that a customer reside in, or be a citizen of, the United States in order to be eligible for SIPC protection.
Is a non-U.S. corporation eligible for protection from SIPC?
Generally, a corporation organized under non-U.S. law and/or with its principal place of business outside the United States may qualify as a “customer” under the Securities Investor Protection Act and may be eligible for SIPC protection. A corporation that is a bank or securities broker-dealer acting on its own behalf, not on behalf of customers, however, is not eligible for SIPC protection.