CME Group is the world’s leading derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange’s rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX. To become an Introducing Broker, you need to meet specific requirements such as registration with the appropriate regulatory body. At the same time, you need to have good knowledge and a network within the financial industry. It’s also necessary to work under a clearing broker’s umbrella or find one willing to allow you to operate under them.

IBs typically offer a specific service and tend to maintain a long-term relationship with their clients. The type of service they provide varies, but it can be anything from providing educational courses to 1-to-1 live training and cashback sites. All content on this website, including dictionary, https://www.xcritical.com/ thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.

Regulation Best Execution at a Glance

(18), (19). 106–554, § 1(a)(5) [title I, § 101(1)], redesignated pars. (10) and (11) as (18) and (19), respectively.

Introducing brokers – also called IBs for short – are individuals or companies who act as an agent between the broker and the client. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before forex white label agreement making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. An Introducing Broker (IB) is a professional or firm that introduces prospects to a broker, typically in the investment, insurance or derivative industry. They usually receive a commission in return.

Introducing Broker (IB) Members

(47)(F)(i), is title VII of Pub. 111–203, July 21, 2010, 124 Stat. 1641, which enacted chapter 109 (§ 8301 et seq.) of Title 15, Commerce and Trade, and enacted and amended numerous other sections and notes in the Code.

An introducing broker is a broker-dealer that contracts with a clearing firm to handle the execution and settlement of orders that the introducing firm receives from its clients or its own trading desk to buy and sell securities. Initially, an introducing broker is an intermediary between a client who wants to sell different assets and the financial market. IBs can either act as recommendation providers or execute trades directly on the customers’ behalf. Generally, the term mainly referred to land-based service providers. However, with the evolution of technologies and brokerage platforms.

Benefits of the Axi Introducing Broker programme

Online IBs are becoming increasingly popular. The Complete IB Handbook has guided the industry with exclusive insights for years. Recently released, the ninth edition of the Complete IB Handbook offers a full guide to doing business as an introducing broker ‒ sponsored by CME Group and written by Melinda Schramm, Founder and Chairman of the National Introducing Brokers Association (NIBA). The handbook compiles survey data from National Futures Association (NFA) registered introducing brokers and provides an updated view of the IB community. The term “market” is interpreted broadly for purposes of existing requirements and would be broadly defined under Regulation Best Execution as well, including other broker-dealers, exchanges, alternative trading systems (ATSs), and other venues that become known. The scope may also include a variety of mechanisms operated by markets used by broker-dealers to transact for or with customers (including auction mechanics and other execution protocols).

IBs should test out the broker they are looking to work with by opening a live account themselves and actively using it. Every broker will ask new IBs for some documents to prove their identity. This might be a passport, driver’s license, or identity card. When applying to become an IB as a company, you might need to provide the appropriate documentation for that, such as a certificate of incorporation and a bank statement in the company’s name. Despite being quite long (440 pages), the proposal is short on details and definitions and would benefit from clear statements of SEC expectations. We expect continued robust comment and criticism up to and after the March 31, 2023 comment deadline.

Benefits of Working with an Introducing Broker

The Commission shall promulgate regulations to establish factors with respect to the making of this determination to exempt. The term “swap data repository” means any person that collects and maintains information or records with respect to transactions or positions in, or the terms and conditions of, swaps entered into by third parties for the purpose of providing a centralized recordkeeping facility for swaps. The term “security-based swap dealer” has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)). AxiTrader Limited is a member of The Financial Commission, an international organization engaged in the resolution of disputes within the financial services industry in the Forex market.

The information presented here is intended to call attention to key compliance issues. This is not a complete list of requirements. For complete information, visit the NFA Rulebook and CFTC Regulations. The main idea of cooperating with IBs is to increase the efficiency of a particular trading strategy. In other words, they are here not only to provide recommendations but also to help you fine-tune specific approaches or even run and execute them for you. Read more about the community’s response to global issues such as the COVID-19 pandemic and industry issues like the rise of the discount broker.

Introducing Brokers (IBs)

Amendment of this section and repeal of Pub. 110–234 by Pub. 110–246 effective May 22, 2008, the date of enactment of Pub.

• The Farm Credit Act of 1971, referred to in par.
• The Dodd-Frank Wall Street Reform and Consumer Protection Act, referred to in par.
• Recently released, the ninth edition of the Complete IB Handbook offers a full guide to doing business as an introducing broker ‒ sponsored by CME Group and written by Melinda Schramm, Founder and Chairman of the National Introducing Brokers Association (NIBA).
• This means that broker-dealers would be required to use reasonable diligence to ascertain the best market for the security, and buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions.
• The introducing broker, who earns a commission on the transaction, typically pays a fee for each trade and interest on margin loans the clearing firms make to the clients it introduces.
• 111–203.

106–102 which is set out as a note under section 78c of Title 15, Commerce and Trade. Section 25 of the Federal Reserve Act, referred to in par. (39)(A)(vii), is classified to subchapter I (§ 601 et seq.) of chapter 6 of Title 12, Banks and Banking. For purposes of this subparagraph, the term “Secretary” means the Secretary of the Treasury. The term “security” means a security as defined in section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) or section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)). The term “hybrid instrument” means a security having one or more payments indexed to the value, level, or rate of, or providing for the delivery of, one or more commodities.

The Complete Introducing Broker (IB) Handbook, 2021: now available

The arrangement allows for specialization where the IB focuses on the client while the FCM focuses on trading floor operations. The first exemption is included in FINRA’s existing best execution rule. The second may be consistent with FINRA’s best execution rule, but is not expressly discussed therein.

IB

110–234, except as otherwise provided, see section 4 of Pub. 110–246, set out as an Effective Date note under section 8701 of this title. (12)(A)(i)(II) to (IV). 111–203, § 721(a)(7)(A)(ii), (iii), added subcl.

The term “security-based swap” has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)). For purposes of subparagraph (A), a person may be designated as a major swap participant for 1 or more categories of swaps without being classified as a major swap participant for all classes of swaps. The term “foreign exchange forward” means a transaction that solely involves the exchange of 2 different currencies on a specific future date at a fixed rate agreed upon on the inception of the contract covering the exchange. The term “cleared swap” means any swap that is, directly or indirectly, submitted to and cleared by a derivatives clearing organization registered with the Commission. Online trading brings a broader introducing broker definition. Today, it can also be a broker partner or affiliate as well as a signal provider (copy master) in the copy trading ecosystem.