This is surely done because of legal requirements and is definitely in the client s own interest. These forms are in context with the tax-aspect of the investment. They document, that the income gained in the US is liable for taxes in the investor s home country. American investors do not need this form, as they are registered via their Social Security Number. Lombard Institutional Brokerage , for example, offers detailed instructions.
Some brokers also accept the transfer of securities to the corresponding counter-value.
Here one should weigh up the costs and the duration of a transfer against the profits. Until then, no transactions will be executed, simple as that. The stylish description for this type of portfolio maintenance is 'cash only accounts'. Should you wish to engage yourself in the highly speculative options- and futures area, this deposit increases accordingly. This is justified by the fact of increased risks with these types of transactions for the Brokerage company, being the mediator between the exchange and the customer, thus making the request for additional deposits understandable.