Cash accounts maintained with IBUK are subject to the U.S. Free Riding Rule as the accounts are introduced to and carried by IBL, a U.S. broker. According to the Free Riding Rule, in a Cash account, an investor must pay for the purchase of a security (meaning, the trade must settle) prior to selling that security. If an investor buys a security and then sells that same security without paying for the security in full by settlement date, the investor is considered to be "free riding." Accounts that commit free riding violations will be restricted for 90 days, during which time the account can only purchase securities using settled funds.
As accounts migrated to IBIE will not be introduced to IBL, they will not be subject to the Free Riding Rule.