When a client invests with us, we manage the investments, while the assets are held by Interactive Brokers, LLC. Interactive Brokers is a third-party custodian. Using a third-party custodian promotes transparency and reduces the potential for conflicts of interest. Client Securities Accounts that are held by Interactive Brokers LLC are protected by the Securities Investor Protection Corporation ("SIPC") for maximum coverage in the amount of $500,000.00 (with a cash sublimit of $250,000.00). The Client Securities Accounts are additionally held subject to the Interactive Brokers, LLC. SIPC policy. The Client Securities Accounts are held with certain underwriters at Lloyd's of London for a maximum individual account balance in the amount of $30,000,000.00 (with a cash sublimit of $900,000.00), subject to an aggregate limit of $150 million.
Futures and options on futures are not covered by these policies. As with all securities firms, this coverage provides protection against failure of a broker-dealer, but does not protect against loss of market value of securities. Interactive Brokers, LLC incorporates several checks and balances into the process. As such, their positions are marked to market daily and the resulting payables/receivables are automatically reconciled to outside sources. Their real-time margining system marks all client positions to market on a continuous basis. All orders are credit-vetted before execution and positions in accounts with inadequate margin deposits are automatically liquidated.
In addition, Hercules Investments' platform is supported by comprehensive data management systems and security policies designed to protect client data from external threats. On a consolidated basis, Interactive Brokers Group (IBG) LLC, the parent company of Interactive Brokers, LLC, exceeds $8.1 billion in equity capital and over $6.0 billion in excess of regulatory requirements.