There are two ways to allocate dividends and interest in an STL account:
These are described below.
Using the Net Method, all account holdings are netted across all client accounts for the purpose of calculating interest and dividends. The result is booked to the master account. The Net Methois the easiest way of reflecting the charge for the entire STL account family.
Using the Gross Method, every client account is handled separately. Each client account is charged interest and dividends according the assets in the client account. Since the STL account family’s total charge is based on the Net Method, the difference the Net Method and the Gross Method is booked to the master account. The Gross Method allows an STL account family to track the constituent’s performance for dividends and interest.
All STL accounts opened after December 2012 will default to the Gross Method. To change the dividend and interest allocation method, contact your IB sales representative or submit a Customer Service ticket in Account Management.