When account holders enter into transactions with instruments which are denominated in a non-base currency, the resultant profit or loss along with any interest charges (in the event of a margin loan) will remain in the currency in which the product was denominated until such time the account holder acts to close the currency position(s). This responsibility rests with the account holder as closing the position requires acceptance of a conversion price which is likely to be subject to continuous fluctuation similar to any other financial instrument.
There are limited instances in which we will act to close a non-base currency position, including the following:
- In situations where a margin deficiency exists and the position is closed in an effort to restore margin compliance; and
- If the non-base currency balance is deemed to be nominal. Nominal balances are defined as those below USD 5.00, or equivalent. Such balances are regularly swept once settlement has been completed into the Base Currency as long as no other unsettled activity remains. Note that balances that are accrued but not yet posted, such as interest debits and credits, are not subject to being swept while in an accrual state.
- If the account equity is deemed to be nominal. Here, if the account balance is below USD 80.00 or equivalent, the balance consists solely of cash and there has been no trading activity over the prior 10 business days, all non-base currency balances will be unwound and converted into the base currency. Note that this logic does not apply to accounts managed by a financial advisor or custodial and omnibus accounts carried on behalf of an introducing broker. This logic applies to fully disclosed introducing broker accounts.
- If the account has selected the Close Account option in Client Portal. Here, all non-base currency balances not greater than 1,000 USD equivalents will be automatically converted into the base currency.
We provide an expedited process to assist account holders who wish to close all non-base currency positions collectively. To use this process, start by opening the TWS account window. In the Market Value - Real FX Balance section, right-click on any row and select "Close All Non-Base Currency Positions". You will be guided through a series of steps to create a market order to close any non-base currency positions.
Please Note
- Commissions are charged on Forex conversions initiated by the account holder but not on those initiated by the broker for the purpose of closing a nominal balance as noted above. We will charge a commission if the position was liquidated in order to restore margin compliance.
Additional Information