Broker and Brokerage Information Exchange

We have lots (a really lot) of messaging that deals with various brokers and what is allowed/not allowed by them in terms of buying/selling new issues on the Over The Counter (OTC) markets and many other issues.

For instance some brokers allow pretty much any transaction. I personally like eTrade as I have never had a trade rejected by them–while I have an account with Fidelity it restricts my ability to buy Fixed-to-Floating rate issues.

This area is for an exchange of information on all the various brokers–good, bad and otherwise.

Like all the various discussion pages if folks could ‘stay to topic’ the page will be more valuable to all, but staying to point.

If you want to start a new thread go to the bottom of the page and do a comment–instead of a reply.

578 thoughts on “Broker and Brokerage Information Exchange”

  1. I hold a position in Energy Transfer LP 6.500% Series H Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units, cusip 29273VAN0. As many of you know, this is an ‘institutional’ issue: no ticker, you buy it at the bond desk, but it trades flat (no accrued interest paid by purchaser), $1000 liquidation preference issue.

    I hold a position at two brokers: Vanguard and Fidelity
    – Vanguard characterizes the income as dividends
    – Fidelity characterizes the income as interest

    Which is correct?

    The prospectus ( says “We will treat distributions on the Series H Preferred Units as guaranteed payments for the use of capital that will generally be taxable to the holders of Series H Preferred Units as ordinary income…” It consistently refers to ‘distributions’, carefully avoiding either the term ‘dividend’ or ‘interest’.

    1. My understanding is ET is a MLP. MLP’s do not pay “dividends”. Typically this falls under “K-1” status.
      From ET….
      ET is a publicly traded master limited partnership. Unitholders are limited partners in the Partnership and receive cash distributions. A partnership generally is not subject to federal or state income tax. The annual income, gains, losses, deductions and credits of the partnership flow through to the unitholders, who are required to report their allocated share of these amounts on their individual tax returns as if they’ve received these items directly. You will receive a K-1 tax package summarizing your allocated share of the partnership’s reportable tax items for the tax year. We estimate that Schedule K-1 tax packages will be distributed to unitholders of record in March for the preceding calendar year.

      If you should have questions regarding the Schedule K-1, contact our K-1 Tax Support Center at:

      ET Common Units K-1 Tax Support Center: 800-617-7736 Monday-Friday 8am-5pm (CST)

      ET Preferred Units K-1 Tax Support Center: 833-608-3511 Monday-Friday 8am–5pm (CST)

    2. Neither broker has it correct..
      It is “ECI” distribution that will be reported to you on the K-1 in box 4b.

  2. Today TD listed the value of AGRIP as $0.0001 per share in the holdings table. The last trade was on 5/15/23 at $100.06. No trades today but their qoute screen shows a bid at $100. Does this make sense?
    Does anyone know if AGRIP is on the expert market or affected by Rule 15c-2-11? and if the 0.0001 listing is related? and if this could create difficulty in selling it?

    1. MFZ, It is not an expert market issue. However it was IPO’d as a 144a preferred. Over time it has become a pink sheet for whatever reason. But its origin may cause some “goofiness” as you encountered several brokerages as recently as a couple years ago wouldnt allow trading if it. But their financials are publicly available so there will be no “expert market” issue anyways.

      1. Many Thanks Scott, it gets corrected on and off at TD.
        And thanks to Grid who is always generous with his valuable input.

        1. If you access the quote, and your position, in ‘Think or Swim’, you will find the data on AGRIP is reported correctly. ( at least I did so ). The standard display is often mixed up.

  3. Nasty surprise today at Schwab.
    they had posted a note a few days ago that they were going to change how they showed “buying power” in an account, and today they posted “Balances now reflect open orders. For more information, view details by clicking Buying Power.” on the order page. Sounds pretty benign – but there is a nasty change they didn’t talk about.

    What they didn’t say anywhere is that effective today, you can no longer place orders backed by funds in money market accounts. You have to sell the money market account (and settle to cash) before you can place an order.

    This is a huge change.

    I have been keeping essentially all of my cash in MM funds, and for many years I could place orders backed by the MM fund balances (and if an order filled, I had to sell the MM fund to cover). That is no longer allowed. Of course, Schwab didn’t announce that. They just did it.

    It is not a huge problem in my taxable accounts (because of margin), but in my retirement accounts (traditional, inherited, Roth), it is a big issue because they can’t have margin.

    Fundamentally, Schwab is ripping off clients by not allowing us to keep money in MM accounts and instead forcing us to keep money in their crappy bank that pays essentially no interest.

    I just spent an hour on the phone with Schwab and nobody I talked to could tell me where this change came from, only that it is real. A couple of guys tried to tell me it has always been this way, but it wasn’t as recently as yesterday.

    It is a significant problem for me because I keep a lot of GTC orders backed by MM funds, so I can earn interest on my money while I wait for speculative orders to fill (or not).

    One more sign that Schwab is feeling the pressure, and is picking customers pockets to line theirs.

    1. I need to pull back a bit on my post above.

      While I did have the conversations with Schwab I mentioned and some of my retirement accounts act as I described, a couple are acting like they did before (allowing me to place orders backed by MM fund balances). It makes no sense.

      To test things, I just placed a couple of orders totaling over $2000 in an inherited IRA account (can’t have margin) that has $49 cash ) and way over $2000 in MM funds. The orders went through.

      So, I have no idea what schwab is doing. The reps said things have changed to require cash in the account to back all trades. Some of my accounts are acting that way and others aren’t.

      I am supposed to get a call back from a “specialist” at schwab. No idea what to expect.

      1. Though I do not have a Schwab account, to the best of my knowledge this has been the way it’s been working at their TDAmeritrade for a long while….. I know I moved money into the MM accounts out of the sweep accounts because of the sweeps paying essentially nothing…… There is a workaround that you can use in the non-margin eligible accounts, though. If you place the order intended for your IRA in your margin account, you are allowed to transfer the purchase to your IRA as long as you do it on the same day, possibly the next day too ….. So once trade is executed, sell MM funds to cover it, and transfer your margin account trade to the IRA….. I’ve had no trouble doing that at TDA.

        1. Yep, that’s my experience w TDA as well. Sounds like Schwab may be aligning on TDA’s policy as part of the acquisition (“hmm, two different policies, we need to align them, which yields us more revenue/less expense?”).

        2. Thanks 2WR. I may have to try that. I didn’t even think of changing an order to another account.

          I am actually a bit embarrassed about this thread.

          In a further bizarre development, I got a call back this afternoon. The guy wasn’t a “specialist”, but he is a senior broker.

          He said he was not aware of a change, other than that the trade ticket tool will now tell you how much money you have available to trade (as it has in the past), but it will subtract the amount you have already “committed” in open orders So, just a change in what it shows, not what it does.

          I told him what we had tried earlier with the other schwab guys on the phone and he was mystified why it didn’t work with them on the phone, but more confused about why it didn’t work in one account but did work in others later in the day.

          We walked through the examples I had tried with the earlier guys, and they all seemed to work OK, including the one that wouldn’t work this morning. I was shocked.

          It was after the market had closed (he didn’t think that should matter). We set up trades in several other accounts and all worked just like they did last week.

          Baffling to me.

          His one thought was that the broker on the earlier call may have set up a trade in the account we were using as our “test bed”, and never cancelled it, so I couldn’t set up a trade in that account (as a test with the guys on the phone) because the MM value in the account was “tied up” by the broker’s order. (I am not quite sure I understand that, and I am not sure I captured it correctly). Anyway, when we tried it hours later it worked – maybe because the first broker’s uncompleted order had timed out(?).

          He was also surprised that the earlier guys told me I had to sell MM funds and wait for them to settle before I could place a trade. He said he had seen no announcement of anything like that, and he would have expected an announcement about something that fundamental. He did say there was an announcement (about 4 months ago?) that changed how you can place orders for MM accounts if you have open orders. I was aware of that announcement. It “re-ordered” the “preference” for funds in your account so that the system “tied up” cash in the account to cover open orders as first priority. So, to place a MM purchase, you had to cancel open orders so the cash was available to place a MM order. then you could re-enter the cancelled orders and they would be backed by MM funds. (Its annoying, but it is at least a set of rules I can understand).

          From his comments, it sounded like maybe the guys I talked to this morning simply didn’t know anything about the topic we were discussins but wouldn’t say so. So, as I asked them increasingly difficult questions, they made up answers and backed themselves into a corner they couldn’t talk their way out of (hence the need to “have a specialist call me back”).

          So, to recap:
          the broker confirmed this afternoon that the statements from the guys earlier in the day were incorrect:
          -There is no need to sell MM funds and wait for them to settle before placing a trade “backed” by the MM funds.
          -I can place buy orders against the value of MM funds and continue to earn MM interest until I sell to cover purchases that go through.
          -Schwab is not requiring customers to hold cash in accounts to place trades, or to keep trades open. they would love to have us do that, but it’s not required.

          So, this whole thread may have been a nothing-sandwich based on bad information from the first group of Schwab representatives.
          Ridiculous waste of half a day.
          I will see what happens.

          1. Wow, today I learned you can use MMF as buying power at Schwab. I had no idea this was possible with any broker other than Fidelity (which is still better insofar as they auto sweep in / out of the MMF to cover all trades).

            So since MMF settles in T+1 , you have until the next day to sell enough MMF to cover trades. But what happens with Schwab if you don’t sell the next day?

            1. If you don’t deliver funds by settlement, you’ll have a negative cash balance. If it’s in a margin account, congratulations, you have a margin loan. Otherwise, you’ll see a red “funds due” warning. If you deal with that within a few days, nothing bad will happen. They do have the right to sell your positions to satisfy the balance, but I’m sure they will try to call you first.

              A couple of notes:

              Options and mutual funds also settle on T+1, so you don’t have an extra day. Can definitely be tricky if a limit order fires near the close.

              You can sign up for “limited margin” on some retirement accounts, but not all. For example, I don’t think inherited IRAs are eligible. For those, you do have to sell your MMFs ahead of time in order to buy something else.

              1. Thanks, good to know nothing dire happens if you miss selling the MMF the next day.

                To be honest, I wasn’t 100% sure this would work on my IRA account with limited margin. But just bought an MMF yesterday (settlement today) and it does appear to available for making trades today 🙂

                I’m not sure how well this is known about Schwab MMF being available for buying power. Although it’s not quite as customer friendly as Fidelity / Vanguard, it’s pretty close. And I prefer Schwab for my trading account due to Street Smart Edge.

              2. I agree with you, David. Good summary of how it works in taxable accounts.

                For better or worse, I have about 90% of my money at schwab in some kind of IRA, so I am intimately familiar with how they treat those kinds of accounts.

                In non-taxable accounts (like IRAs), if you don’t settle the cash due by the settlement date, they flag the account for a trading violation and will require you to have cash up front in the account for future trades. You can settle amounts due by selling MM accounts or by selling something other stock that generates a positive balance in the account (I think this latter kind of “buying against unsettled sales” is the “limited margin” you mentioned).

                FYI – You can buy at Schwab in an inherited IRA (or inherited Roth) using MM fund support just like in a regular IRA. I have several of each and I don’t have to sell MM in advance of purchases. However, I have really old (10+ years) inherited accounts, so the rules may be different for newer inherited accounts (there was a huge change in the tax laws about how inherited accounts work about 5 years ago, but my old accounts are “grandfathered”).

                I don’t remember signing anything to enable these limited margin or MM support features, but I may have. Schwab is the most paper-driven broker I have ever dealt with – I moved several accounts there when ScotTrade went away and I walked out with more than an inch stack of paper.

                It is common for a buy order to execute near closing in an IRA and push the account balance negative, even if I placed a MM sell order to cover purchases made earlier in the session. I get little trades pretty regularly where the notice arrives after the market has closed (trade time is often something like 3:59:59 – so it has to be some algo trade). I also regularly miss being around at the end of the trading day to enter MM sell orders to cover trades that occurred during the day.

                In my experience, Schwab won’t give you a trading violation if you enter a MM sale order sufficient to cover the shortfall either after the market closes or during the next trading day. Broker told me that so long as the MM sale (+1 settlement) closes at the same time as the stock purchase (+2 settlement), you are OK. I don’t do options or mutual funds in my IRAs, so I don’t know how those would be handled.

                FYI – If you are about to get a trading violation for a purchase you haven’t paid for and you get a call from Schwab, the best way to clear it is to sell something other than the shares you purchased. If you re-sell the shares you just bought (and didn’t pay for) to try to settle the payment violation, you get a different kind of trading violation for a “free ride” trade. If you have a good broker on the phone, s/he will usually tell you this – but some of the less experienced/less smart folks won’t.

                Sorry for the long post.

                  1. Thanks David,

                    I think there must be something screwy with Schwab’s systems (surprise, surprise). I looked at the page you linked.
                    -I tried on several IRAs (roth, and regular). It doesn’t show me my status, but it does invite me to apply for limited margin. On my Inherited accounts, it says they are not eligible for limited margin (like you said in your original post). Funny thing is that I am already trading in all of those accounts as if they have limited margin (so I think I must have it). Maybe I applied many years ago and am grandfathered in? maybe the system that checks status for this page and the one in the trading system are different? I don’t understand, but it is working to my benefit, so I won’t ask any questions.
                    -Similarly, the linked page doesn’t show status for my taxable individual account and invites me to apply, even though I already have full blown margin on that account.
                    -For my trust account (where I also already have margin), it says I have to apply for margin on paper (I now remember having to do that many years ago because they require all trustee’s signatures).

                    No idea why it shows me something different than it shows you, or why it is letting me trade with limited margin in my inherited accounts. Maybe they figured I couldn’t understand it so they put me in the special class.

                    I love schwab and its mysteries.

    2. Private to add to your theory, recall that literally half of Schwab’s earnings come from THEM earning interest off of customer’s cash holdings. So they have a ton of incentive to force/coerce customers to maintain cash balances that are not in their money market funds.

      Related to this is that last I heard, their Roboadvisor maintains a cash balance of ~ 5%, regardless of where the risk knob is set. You want max, pedal to the metal, aggressive allocation, you still hold 5% cash. IIRC, the SEC took issue with this and fined them.

    3. > It is not a huge problem in my taxable accounts (because of margin), but in my retirement accounts (traditional, inherited, Roth), it is a big issue because they can’t have margin.

      I mentioned this in another comment, but this is not completely correct. Vanilla retirement accounts can have “limited margin”, so you can buy before you sell the MMF, but you can’t have a margin loan. I can’t find a statement of exactly which accounts are eligible, but I don’t think inherited IRAs and trusts qualify.

      1. Hi David,
        Sorry, I just put up a ridiculously long post on retirement accounts at schwab, but let me clarify about trusts:

        You can have margin on trust accounts at schwab. My biggest taxable account is a trust account (revocable family trust) and it has regular margin enabled. You definitely have to sign up for it.

        I remember that because I didn’t have margin enabled when I opened the account and a helpful broker who was helping me avoid a trading violation asked me “why don’t you just sign up for margin in this account and you won’t have this kind of problem any more”. Silly me – of course it would, but I didn’t know that they would allow margin on a trust account. So, I signed up for margin that day.

    1. I called and was told it’s a known problem they are working to fix. Able to login from another browser.

  4. If anyone has a qualified dividends reported incorrectly as interest in 1099, it may help others that may have missed it by posting it here.
    My Merrill Edge 1099 for 2022 incorrectly reported the CMS-C distribution as interest rather than as qualified dividend.

    1. I appreciate if anyone can shed light on following.

      Merrill reported CMS-C distribution in 1099-INT. Merrill rep agreed that it should be reported in 1099-DIV. It does not seem that I will get a corrected 1099 on time to file by 4/18.

      Does anyone know if it would be ok to file by making the changes (deduct CMS-C distribution amount from 1099-INT and add to 1099-DIV) ?

      Or should I pay due tax, file an extension and wait for Merrill to issue the 1099C ?
      If I request an extension, would I be able to e-file return (TurboTax) ?

      Thank you and best regards

      1. Personally, I would file the extension.
        -you can file an extension in Turbotax. It will record whatever you pay with the extension and it will show in your final return.

        -You will then be able to submit the final return with turbotax when you are ready.

        I do the extension every year because I get corrected 1099/k-1s every year. I then file the final return in October based on whatever info I have. If I get more corrected 1099/k-1s after I file, , I have to decide whether to file an amended return. Usually, I just don’t. Not worth my time to file a 1040X if the changes are negligible.

        One dirty little secret about Turbotax – always (1) buy the disk version (not the download) , (2) save the disk (and install code), and (3) save the turbotax file (not just the .pdf files). If you ever have to open an old tax return, you will need that year’s turbotax program to open the tax file.

        Intuit used to post the old versions of the Turbotax software for free download a year or so after the tax filing deadline (only real use of it would be to open an old file). I always thought that was a nice thing and good customer service. Well, in their desire to maximize revenue and minimize customer satisfaction, Intuit no longer post the old versions for free. They also won’t let you get the old download, even if you bought the download to begin with (hasn’t happened to me, but happened to an acquaintance a few years ago). So, If you need an old version, Intuit wants to make you buy it (unless you can find some curmudgeon like me who saves them all).

        1. Thank you Private! You answered my question. I will do the extension. Thanks for the advice on TurboTax.
          I appreciate all your help. Best regards

  5. Can someone please supply a Charles Schwab referral code? I need it to open a new account and get the bonus promo. I don’t know anyone who has a Schwab account so thanks in advance.
    Simply login to Schwab, hover over “Service,” and select “Refer A Friend.” Then, you’ll see a box that says, “Share your referral code.” Copy and paste here as a reply.

      1. mcg, Thank you the code/link worked. I am not sure if the promo will work since the system recognized that I already have a TD account. I am going to go ahead and try it since there will be a mandatory conversion later this year.

        1. There’s no bonus for moving assets from TDA to Schwab.

          Also, I recommend leaving a small amount of money in the TDA account, so they won’t close it and turn off your online access.

          1. I have been keeping about $20 in a TD account for years just to maintain access. Don’t know what will happen as the Schwab Borg assimilates TD, but it is working for now.

  6. Has anyone here ever used TDs Fully Paid Lending Income Program or similar on other Brokerage accounts? More curious than anything else. Thanks.

    1. InteractiveBrokers has similar program, which I use for years. Give you some extra money for stock/bond you own.

    2. a couple of things to consider:
      1. If you have a margin account, most brokerages won’t let you into their “Fully Paid Lending Income Program” because they can already lend your shares without paying you.

      2. make sure you understand the tax implications – your dividends may be replaced with payments in lieu. For example in a taxable account, you lose the qualified dividend tax break. Not necessarily a deal breaker, but be aware.

      1. I was able to enroll in the Schwab SLFP program with a margin account. That was a long time ago though.

        Anyway, if you are holding enough widely shorted stock to make money this way, please consider that the shorts might be right. Don’t ask how I know this 🙁

  7. Does anyone have experience with JPMorgan’s Self-Directed brokerage? In particular, what are experiences for bonds and preferreds? Thanks!

  8. E: TD Ameritrade – Has anyone else noticed this happening with your accounts at TDA? I own a few securities in my account such as GDLpC that do not trade everyday. If I am looking to see how my overall account is doing on the day, I cannot because of issues such as GDLpC. Using GDLpC as the example, it has not traded since Feb 7. That implies to me that I should not see a profit or loss on the day for this issue. Yet TDA shows me I’m up .77 on GDLpC TODAY. I own GDLpC at Fidelity as well… They show no P or L on the day on GDLpC. IMHO, reporting by Fidelity is accurate. Reporting at TDA is not.

    This is not an isolated event. I’ve noticed this on other issues at different times as well… have others noticed also? I reported it to a rep and she says she believes it’s reporting the way it’s designed but she’ll look into it and report my observation. A variation of this is also occurring today on EBGEF… EBGEF has traded today at an unchanged price from yesterday, but TDA shows me being +1.76% on my position on the day… Phantom performance..

    1. 2WR, I see that often myself. Generally overall amount value usually appears correct. Except for my bond pricing where your bond bros are always trying to slap me with fake news low bond pricing values.

      1. Oh sure, Grid – blame it on the bond bros…. lol… Obviously two different phenomenons as you know but I’m glad I’m not alone in what I see happening… I agree the amount value seems correct, but why make it so difficult for the client to be able to accurately answer that old Ed Koch question, “How am I doing?” when looking at what’s supposed to be his daily report of P&L? It doesn’t happen at Fidelity….

    2. SBNCM is like that for me at TDA. It is showing a 6.35% gain today (and on most days) on an unchanged $15.40 last price.
      I guess I haven’t tracked the value of the position from day to day to see if it’s actually affecting my day’s gain / loss calculations. I’ll start tracking to see what affect, if any, it is having on my overall portfolio value.

    3. TD Ameritrade definitely has issues with reporting P&L accurately. For example, on the overview page it will have one net gain/loss number and on the Positions page it will have another. I’m talking 100s of dollars not pocket change.

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