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7210B Definitions

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Brokers must utilize a clearing firm to enable their customers to execute trades and traders need a broker in order to place trades. Clearing firms then take on the financial risk of the trade settlement. In that vein, the clearing firm is financially responsible for the completion of the trade sequence. There is no single best commission plan for Introducing Brokers. Your choice of plan will depend entirely on the number and quality of your referrals (high volume long term against small time and short term). Ideally you should find a leading broker with a reliable affiliate program and check them out.

MetaTrader trading platforms (4th and 5th versions) customized to corporate needs and demands. Furthermore, White Label programs are characterized by more flexible revenues and commissions, making it possible to establish different partnership levels. Technical support is one more important aspect – primary brokers are ready to solve all the troubles and headaches of companies who have integrated WL components.

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Aggregate uncollateralized outward exposure in general means the sum of the current exposure, obtained by marking-to-market using industry standard practices, of each of the person’s swap positions with negative value in a major swap category, less the value of the collateral the person has posted in connection with those positions. (2) The person’s aggregate uncollateralized outward exposure for positions that are not reflected in any report of exposure from a swap dealer (including all swap positions it holds with persons other than swap dealers) shall be calculated in accordance with paragraph (2) of the definition in this section of substantial position. (2) For purposes of section 1a(33) of the Act, 7 U.S.C. 1a(33), and the definition of a major swap participant in this section, the term highly leveraged means the existence of a ratio of an entity’s total liabilities to equity in excess of 12 to 1 as measured at the close of business on the last business day of the applicable fiscal quarter.

  • However, reputable registered brokers are choosy about who they accept as introducing brokers.
  • My paper addresses the history and development of the federal regulatory framework and the policy reasons that motivated the SEC to facilitate the establishment of such a framework in terms of the uniform regulation of clearing brokers nation-wide for the benefit of public investors.
  • (ii) Not held to hedge or mitigate the risk of another swap or security-based swap position, unless that other position itself is held for the purpose of hedging or mitigating commercial risk as defined by this definition or § 240.3a67–4 of this title.
  • An application fee for principals and APs is not required if the individual is currently registered with the CFTC in any capacity or is listed as a principal of a current CFTC registrant.
  • This term references both a Cleared Swaps Customer Account and a Futures Account, as defined in this section.

Also, the best brokerages have marketing assistance to affiliates and IBs with banners, landing pages, and embeddable materials for websites. Contracts for difference are popular assets for traders globally as they provide a way to access a wide variety of financial markets. As well as being a trader, Milan writes daily analysis for the Axi community, using his extensive knowledge of financial markets to provide unique insights and commentary. He is passionate about helping others become more successful in their trading and shares his skills by contributing to comprehensive trading eBooks and regularly publishing educational articles on the Axi blog, His work is frequently quoted in leading international newspapers and media portals.

Related to Introducing Brokers

Such a model would, not only be in conflict with the federal regulatory framework and caselaw, but would substantially increase the cost of clearing services for thousands of introducing firms and their customers for the benefit of only a small number of introduced customers whose introducing firms may have become insolvent after committing the misconduct and thus may have become incapable of responding in damages. My paper addresses the history and development of the federal regulatory framework and the policy reasons that motivated the SEC to facilitate the establishment of such a framework in terms of the uniform regulation of clearing brokers nation-wide for the benefit of public investors. In calculating its aggregate uncollateralized outward exposure and its aggregate potential outward exposure, the person shall not consider its swap positions with counterparties that are majority-owned affiliates.

define introducing broker

This term has the meaning provided in § 22.1 of this chapter. Traders can trade on the industry leading MT4
trading platform. They can also make use of
MT4 WebTrader and our Copy Trading platform. You can simply open an IB account through the
site by filling out a short registration form and
start enjoying the program’s features in just a
few seconds. Sets of trading tools and groups tailored to a specific account type.

Introducing Broker portal ​

Each Advisor, Proprietary Trading STL and Multiple Hedge Fund master account holder can add client, sub and hedge fund accounts as required. The Investors’ Marketplace lets individual traders and investors, institutions and third-party service providers meet and do business together. IBKR Lite provides retail clients with USD 0 commissions on US listed stock and ETF trades. IBKR offers multiple options for adding clients and migrating to our platform, including fully- and semielectronic account applications, a mass upload feature and support for customized client account applications using our application XML system.

FCMs supply trading platforms on which clients have the ability to place trades online and are responsible for account management. However, the majority of FCMs would find it financially impossible to open offices around the country to serve their customers. This is where IBs excel since they typically operate out of smaller offices located all over the country.

An application fee for principals and APs is not required if the individual is currently registered with the CFTC in any capacity or is listed as a principal of a current CFTC registrant. Only one application fee is required if the individual is filing an application as both an AP and principal. For purposes of paragraph (4) of this definition, the term State means any state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, or any other possession of the United States. This term means an account that is maintained in accordance with the segregation requirements of sections 4d(a) and 4d(b) of the Act and the rules thereunder.

While errors with trade settlements are rare, it’s good to know any problems can be handled quickly and efficiently under one roof. This is great for customers as there is complete accountability in a one-stop shop model without having to work through layers of middlemen. Brokers that cater to specific types of customers like active traders further elevated their value since more trades means more clearing with a single point of contact for the customer and back office. Brokers are the conduit which enables customers to access the stock markets and place trades. Once that buy or sell button is hit and the trade is executed, the clearing firms handle the back-office duties to ensure that the trade and monies are settled and cleared. Options involve risk and are not suitable for all investors.

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The actual trades are made by the brokerage with whom the introducing broker partners. The introducing broker brings clients in, provides consultation and services and receives a commission for every trade the brokerage makes on behalf of these clients. The Advisory highlights that swaps intermediaries that facilitate the execution of swaps need to carefully consider if they fall within the SEF definition. Even where the swaps IB directly intermediates the swap between the client and the counterparty, the Advisory suggests that the IB may need to register as a SEF.

Registration Requirements for Principals and Associated Persons (AP) of IBs

Up-to-date CRM systems tailored to brokerage needs – such software helps business owners manage their referral programs. Accounts are accepted from citizens or residents of all countries except citizens or residents of those countries or regions that are on the sanction list of the US Office of Foreign Asset Controls or similar lists, or other countries determined to be higher risk. All fees, commission and interest owed to the broker are first sent to the broker’s Master account and then swept nightly to the Proprietary Account for Broker-Dealers. The Shortable Instruments (SLB) Search tool is a fully electronic, self-service utility that lets clients search for availability of shortable securities from within Client Portal. The Mutual Fund Marketplace offers an extensive availability of mutual funds from around the world.

The clearing broker dealer will maintain all of the customer accounts, clear all trades and in most cases, will send the customers confirmations and statements. A broker dealer who introduces all of its customer accounts on a fully disclosed basis will not be required to send the customer confirmations and statements, this will all be done by the clearing broker dealer. If the introducing broker maintains an omnibus account at the clearing firm, the introducing broker will be required to send customer confirmations and statements. In order to pass the series 24 or series 26 exam you must have a comprehensive understanding of the roles of the introducing and clearing broker dealers and their net capital requirements. All of this information is covered completely in our series 24 and series 26 exam prep software, textbooks and video training classes. Make sure you are ready to pass your exam with our Greenlight exam pass guarantee.

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Before trading, please read the Risk Warning and Disclosure Statement. If you are working with a reliable affiliate program – and you’re delivering clients – you should expect to receive help as an introducing broker. This can include trading apps and access to platforms for your clients. You should also be able to give potential clients demos and tours.

define introducing broker

(5) Insured depository institution swaps in connection with originating loans to customers. Swaps entered into by an insured depository institution with a customer in connection with originating a loan with that customer shall not be considered in determining whether the insured depository institution is a swap dealer. (1) Solely for purposes of determining whether a person’s swap dealing activity has exceeded the $25 million aggregate gross notional amount threshold set forth in paragraph (4)(i)(A) of this definition for swaps in which the counterparty is a special entity, a person may exclude utility operations-related swaps in which the counterparty is a utility special entity.

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