Funding Accounts (Europe)

To support the launch of Alpaca Europe, our funding infrastructure utilizes a dual-ledger architecture to comply with European regulatory requirements while providing a seamless Local Currency Trading (LCT) experience. All end-user deposits, account balances, and withdrawals are conducted exclusively in Euros (EUR).

Note: At launch, Alpaca Europe will exclusively support the Direct Funding model. Other funding methods are on the strategic roadmap as post-launch additions.

Direct Funding (Supported at Launch)

The direct funding mechanism for Alpaca Europe allows your end users to send funds directly from their personal bank accounts to Alpaca. To facilitate this under the European regulatory framework, the system utilizes a single Omnibus IBAN for all incoming European transfers. To ensure the funds are accurately routed and credited to the correct end user, every transfer must include a specific account identifier in the payment reference field.

When an end user wants to fund their account, the payment reference must be formatted precisely as your Correspondent ID followed by a dash and the end user's Account Number. Once the funds arrive at the Alpaca Omnibus account, our internal systems read this unique reference code to map the deposit to the corresponding fully disclosed European account and update the user's ledger balance accordingly.

From an engineering and integration standpoint, the direct funding model requires minimal backend API overhead. There is no need to call a specific API endpoint to generate or retrieve a unique funding reference for each user deposit. Your Correspondent ID is a static four-letter code assigned to your firm, which is readily available in your Broker Dashboard. The Account Number is automatically generated and returned when you successfully open a user's account via the POST /v1/accounts endpoint. Your application simply needs to concatenate these two known values and display the resulting string to the user as the required transfer reference.

Sandbox Testing for Direct Funding

Because real bank transfers cannot be processed in the testing environment, the sandbox provides a specific simulation endpoint—POST /testing/incoming_wires—to mimic the direct funding behavior.

When you hit this sandbox endpoint with the simulated deposit details, it acts as a mock wire transfer and updates the account balance in the system. This manual trigger provides your engineering team with full control over the testing lifecycle. Because you determine exactly when the system registers that the funds have landed, you can effectively test various latency scenarios (for example, delaying the call to the simulation endpoint by 15 minutes to verify your application correctly handles pending transfer states).

Local Currency Trading (LCT) and Foreign Exchange

Under the European LCT model, end customers never directly interact with US Dollars (USD).

While users deposit EUR and place trades in EUR (e.g., "Buy $100 EUR of AAPL"), the underlying trades on the US market are executed in USD. Alpaca handles the real-time conversion to a share quantity for execution. The foreign exchange risk is absorbed intraday by Alpaca's US broker-dealer, and the actual currency conversion is handled internally during our daily end-of-day inter-entity settlement process.

Post-Launch Funding Roadmap

Following the initial launch, Alpaca Europe plans to roll out additional funding methods to expand platform capabilities:

• Instant Funding / JIT (Just-in-Time) Funding: Building out an API functionality to allow trusted partners to grant buying power to users without an initial cash deposit, creating an inter-company liability that is settled daily.