Futures regulation
What is an Introducing Broker (IB) and how does its business model interface with an institutional clearinghouse?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
An Introducing Broker solicits futures customer accounts but does not hold customer funds, instead routing trades through a registered FCM for clearing and custody.
How it works
IBs must register with the CFTC and be NFA members, earning commissions while relying on their guarantor FCM for execution and fund segregation.
An example
An IB refers a client to open an account at an FCM.
Risk & limitations
IBs are not permitted to directly hold or control client funds.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.