Responsibilities of Introducing Broker & Clearing Broker Apex 01/12/2022

Further, the Commission believes that it and NFA, entities with industry-wide perspective and responsibilities, are the appropriate bodies, rather than any individual exchange, to decide issues relating to registration status, which can affect a person’s ability to function in the industry well beyond the jurisdiction of a particular exchange. Thus, NFA’s role is in no way related to review of exchange sanctions for particular conduct, but rather it is the entirely separate task of determining whether an FB’s or FT’s conduct should impact his or her registration. The Commission believes that a person enjoined from acting in a certain capacity as described in section 8a, even if the order of injunction is entered into pursuant to an agreement of settlement, similarly should be prohibited from acting in any other capacity which requires registration with the Commission. Therefore, the Commission does not intend to limit its authority under section 8a of the Act. The Commission hereby delegates, until such time as it orders otherwise, to the Director of the Division of Swap Dealer and Intermediary Oversight or his or her designee the authority to grant or deny requests filed pursuant to § 3.12.

Is regulated by the Central Bank of Ireland , registered with the Companies Registration Office , and is a member of the Irish Investor Compensation Scheme . 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. Find third-party, institutional-caliber research providers and access research directly through Trader Workstation . Advertise your services at no cost and reach individual and institutional users worldwide. Charge markups to clients based on IBKR stock borrow rates, entered as a variable or fixed percentage of our borrow rate.

It is important to note that exceptions applicable to banks under the Exchange Act, as amended by the GLBA, are not applicable to other entities, including bank subsidiaries and affiliates, that are not themselves banks. As such, subsidiaries and affiliates of banks that engage in broker-dealer activities are required to register as broker-dealers under the Act. Also, banks that act as municipal securities dealers or as government securities brokers or dealers continue to be required to register under the Act.

Introducing brokers help increase efficiency and lower the work load for futures commission merchants. The arrangement allows for specialization where the IB focuses on the client while the FCM focuses on trading floor operations. Full BioAkhilesh Ganti is a forex trading expert who has 20+ years of experience and is directly responsible for all trading, risk, and money management decisions made at ArctosFX LLC. He has earned a bachelor’s degree in biochemistry and an MBA from M.S.U., and is also registered commodity trading advisor . 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.

  • The kind of certification that is appropriate depends on where you will be doing your work.
  • To apply for registration, you must file one executed copy of Form BD through the Central Registration Depository (“CRD”), which is operated by FINRA.
  • Customs Broker means that individual, partnership, entity or corporation licensed by the Canada Border Services Agency, or other authorized body, to engage in the business of a customs broker and who is named as the Customs Broker in the Agency Agreement and Power of Attorney.
  • Apex does not verify information provided by your firm regarding your account or transactions processed for your account.
  • A person acting in accordance with paragraph of this section remains subject to section 4o of the Act, but otherwise is not required to comply with those provisions of the Act and of the rules, regulations and orders thereunder applicable solely to any person registered in such capacity, or any person required to be so registered.
  • Creating uniform order marking requirements for sales of all equity securities.

Sales by a broker-dealer of mutual fund shares and variable insurance product units are deemed to constitute participation in the distribution of a new issue. Therefore, purchase of mutual fund shares or variable product units using credit extended or arranged by the broker-dealer during the distribution period is a violation of Section 11. However, Exchange Act Rule 11d1-2 permits a broker-dealer to extend credit to a customer on newly sold mutual fund shares and variable insurance product introducing broker units after the customer has owned the shares or units for 30 days. You can obtain copies of Form U-4, as well as information on securities qualification examinations, from an SRO. FINRA’s website at contains detailed information and guidance for individuals who wish to obtain a series license through FINRA. Also note that individual states have their own licensing and registration requirements, so you should consult with the applicable state securities regulators for further information.

Advanced Markets

This requirement does not apply, however, to broker-dealers that sell only certain securities that are not ordinarily evidenced by certificates or to persons who do not sell securities, have access to securities, money or original books and records, and do not supervise persons engaged in such activities. A broker-dealer claiming an exemption must comply with the notice requirements of Rule 17f-2. Broker-dealers may obtain fingerprint cards from their SRO and should submit completed fingerprint cards to the SRO for forwarding to the FBI on behalf of the Attorney General. Broker-dealers must notify customers purchasing securities on credit about the credit terms and the status of their accounts. A broker-dealer must establish procedures for disclosing this information before it extends credit to a customer for the purchase of securities.

Do introducing brokers need a license

The Commission’s rules are premised upon the judgment that requiring FTs and FBs to have sponsors to ensure their compliance with conditions is both appropriate and useful. The Commission interprets the term “self-regulatory organization” to include, in addition to a contract market and a registered futures association, any self-regulatory organization as defined in section 3 of the Securities Exchange Act of 1934. Thus, a self-regulatory organization includes any national securities exchange, any registered securities association, any registered clearing agency and the Municipal Securities Rulemaking Board.

Subpart E – Delegation and Reservation of Authority

An oral hearing shall be conducted pursuant to such sections of the Commission’s Rules of Practice, 17 CFR part 10, as the Administrative Law Judge deems necessary and in a manner which shall ensure that the proceeding is resolved expeditiously. An event has occurred leading to a required disclosure on the applicant’s Form 8-R. Is signed by a person authorized by such certifying firm to make such certification. For purposes of this paragraph , the following terms shall have the meanings set forth below.

If the limit order is for a price that is better than the specialist’s or market maker’s quote, the specialist or market maker must publicly display it. The rule benefits investors because the publication of trading interest at prices that improve specialists’ and market makers’ quotes present investors with improved pricing opportunities. The Quote Rule requires specialists and market makers to provide quotation information to their self-regulatory organization for dissemination to the public.

Each Form 7-R filed in accordance with this paragraph must be accompanied by a Form 8-R, completed in accordance with the instructions thereto and executed by each individual who is a principal of the applicant, and each individual responsible for entry of orders from that applicant’s own account. Each Form 8-R filed in accordance with this paragraph must be accompanied by the fingerprints of the applicant on a fingerprint card provided for that purpose by the National Futures Association, except that a fingerprint card need not be filed by any applicant who has a current Form 8-R on file with the Commission or the National Futures Association. The CIP must include procedures for determining whether a customer appears on any list of known or suspected terrorists or terrorist organizations issued by any Federal government agency and designated as such by Treasury in consultation with the Federal functional regulators.

H. Penny Stock Rules (Rules 15g-2 through 15g-9, Schedule 15G)

In addition, a person that is engaged in the business of providing investment advice to others or issuing reports or analyses regarding securities, for compensation, would be considered an investment adviser and be required to be registered as such, unless an exemption is available. Any person that issues securities and is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or that owns or proposes to acquire a certain amount of investment securities is required to be registered as an investment company, unless an exemption is available. The CCO Annual Report should include an explanation of the standard the Registrant used to determine a non-compliance event’s materiality. In addition, this section of the CCO Annual Report should contain a description of each material non-compliance issue identified either through self-assessment procedures conducted within the Registrant, or noted by any external entities which conducted a review of the Registrant (such as a designated self-regulatory organization). The description should also include the corresponding actions taken, described in reasonable detail, as well as specific references to the Commission regulation or regulations that are implicated by the non-compliance event. Specifically, the Commission recommends that the CCO Annual Report include a discussion of the Registrant’s deliberations on a course of remediation, how the implementation of the remediation is being or was executed, any follow-up testing of the remediation, and any noteworthy results from such testing.

Do introducing brokers need a license

Affiliated registrants may submit one annual report that addresses the requirements set forth in paragraphs , and of this section with respect to each affiliated registrant. Prior to furnishing the annual report to the Commission, the chief compliance officer shall provide the annual report to the board of directors or senior officer of the futures commission merchant, swap dealer, or major swap participant for its review. Before it begins doing business, a broker-dealer must become a member of an SRO. If a broker-dealer restricts its transactions to the national securities exchanges of which it is a member and meets certain other conditions, it may be required only to be a member of those exchanges. If a broker-dealer effects securities transactions other than on a national securities exchange of which it is a member, however, including any over-the-counter business, it must become a member of FINRA, unless it qualifies for the exemption in Rule 15b9-1.

Deposits and Withdrawals

An amendment must contain the certification required under paragraph of this section. If the substituted compliance regime does not specify a date by which the comparable annual report must be completed, then the annual report shall be furnished to the Commission by the date specified in paragraph of this section. Only the board of directors or the senior officer of the futures commission merchant, swap dealer, or major swap participant may remove the chief compliance officer. 3 Section 9 prohibits particular manipulative practices regarding securities registered on a national securities exchange. Section 10 is a broad “catch-all” provision that prohibits the use of “any manipulative or deceptive device or contrivance” in connection with the purchase or sale of any security. Section 15 prohibits broker-dealers from effecting transactions in, or inducing the purchase or sale of, any security by means of “any manipulative, deceptive or other fraudulent device,” and Section 15 prohibits a broker-dealer from making fictitious quotes.

Do introducing brokers need a license

Although Section 8c of the Act states that an exchange shall not disclose the evidence for a disciplinary action except to the person disciplined and to the Commission, Section 8a of the Act allows the Commission to authorize any person to perform any portion of the registration functions under the Act, notwithstanding any other provision of law. The effective discharge of the delegated registration function requires NFA to have access to the exchange evidence. Thus, the Commission believes that Section 8a may reasonably be interpreted to allow the disclosure of information from exchange disciplinary proceedings directly to NFA despite the provisions of Section 8c. However, the Commission is also aware that it has often initiated proceedings in which the sole relief sought was an injunction from engaging in certain conduct. In such circumstances, the Commission has accepted offers of settlement which provide that the findings set forth in the settlement will not form the sole basis for the denial, suspension or revocation of such person’s registration with the Commission. The Commission does not wish to impede the resolution by negotiated settlement of such proceedings.

Trader insurance & profit guarantee​

Where a registrant has changed its form of organization to or from a sole proprietorship, the registrant must request withdrawal from registration in accordance with § 3.33. The Commission hereby delegates to the Director of the Division of Swap Dealer and Intermediary Oversight, or such other employee or employees as the Director may designate from time to time, the authority to grant extensions of time, as set forth in paragraph of this section. Notwithstanding such delegation, in any case in which a Commission employee delegated authority under this paragraph believes it appropriate, he or she may submit to the Commission for its consideration the question of whether an extension of time should be granted. The delegation of authority in this paragraph shall not prohibit the Commission, at its election, from exercising the authority set forth in paragraph of this section. Any records relevant to the annual report, including, but not limited to, work papers and other documents that form the basis of the report, and memoranda, correspondence, other documents, and records that are created, sent or received in connection with the annual report and contain conclusions, opinions, analyses, or financial data related to the annual report. As used in this subpart, a Form 8-R is current if, subsequent to the filing of that form and continuously thereafter, the registrant or principal has been either registered or affiliated with a registrant as a principal.

The IBKR Advantage

The more clients you bring in, the more the brokerage will value your role as an IB, which will build on your mutual profitable partnership. If you have a common name like John Smith , consider using a more distinctive name that Google will immediately hone in on. If you’re operating an honest business, there is absolutely nothing wrong with using a professional name.

Trading Technology to Help Introducing Brokers Succeed

Broker-dealers generally have an obligation to recommend only those specific investments or overall investment strategies that are suitable for their customers. The concept of suitability appears in specific SRO rules such as NASD Rule 2310 and has been interpreted as an obligation under the antifraud provisions of the federal securities laws. Under suitability requirements, a broker-dealer must have an “adequate and reasonable basis” for any recommendation that it makes.

The quote information that the specialist or market maker provides must reflect the best prices at which he is willing to trade . A specialist or market maker may still trade at better prices in certain private trading systems, called electronic communications networks, or “ECNs,” without publishing an improved quote. This is true only when the ECN itself publishes the improved prices and makes those prices available to the investing public. Thus, the Quote Rule ensures that the public has access to the best prices at which specialists and market makers are willing to trade even if those prices are in private trading systems.

Providing a wide variety of trading instruments appeals to every investment style, whether clients prefer ETFs or Forex or to trade cryptocurrencies through CFDs. Therefore, brokerages that are certified by organizations such as the Financial Conduct Authority in the U.K, for example, will most likely require some certification from prospective introducing brokers. The kind of certification that is appropriate depends on where you will be doing your work. Contact local financial regulatory authorities for details about certification. Futures introducing brokers are registered with the Commodity Futures Trading Commission and regulated by the National Futures Association . The US does not have a separate regulatory regime for crypto/digital assets.

Any legal person, individual or company that introduces/refers potential business to a Forex Broker and receives remuneration based on Revenue Share, CPA, CPL or P&L is considered to be an Introducing Broker . Watch as your account is credited in real-time on a trade by trade basis. When describing any material changes to the WPPs, a description of the standard of materiality used should be provided. This description will provide meaningful context for any reported changes to the WPPs. In general, identifying areas in need of improvement and recommending steps to effect those improvements should be a core function of compliance. Accordingly, a CCO Annual Report that makes no recommendations for changes or improvements to the compliance program may raise concerns about the adequacy of the compliance program review intended by the CCO Annual Report process.