What is introducing broker in forex?
An introducing broker (IB) is an individual or organization that solicits or accepts orders to buy or sell futures contracts, commodity options, retail off-exchange forex contracts, or swaps but does not accept money or other assets from customers to support these orders.
What is the difference between introducing broker and affiliate?
While an affiliate can provide clients access to several types of good or services, an introducing broker is an agent or affiliate who introduces a customer to a broker service. Introducing brokers are usually paid a spread or portion of the commission that is charged to the client.
How do Introducing brokers make money?
Just like any other type of broker, Introducing Brokers earn their revenue based on a commission charged on their clients. In general, an IB can provide extra services compared to a broker, even if the commission is higher in their case.
What is an introducing agent?
Definition of an introduction agent An introduction agent is a person or company in the business of offering an introduction service that aims to match or provide individuals’ details for personal relationships or social outings.
What is a future commission merchant?
A futures commission merchant (FCM) is an entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts money or other assets from customers to support such orders.
How to become an US forex trading broker?
To introduce U.S. residents an Introducing Broker must be registered and a member of the National Futures Association (NFA). Introduce your customers to 80+ FX pairs as well as gold and silver Benefit from our award-winning trading platforms, plus MT4
What does an Introducing Broker ( IB ) do?
An introducing broker (IB) advises clients in the futures market but delegates trade execution and back office operations to others. The IB is usually affiliated with the FCM, either as an independent entity that is partnered with that merchant firm or as a direct subsidiary of that FCM.
How are introducing brokers regulated by the CFTC?
Futures introducing brokers are registered with the Commodity Futures Trading Commission (CFTC) and regulated by the National Futures Association (NFA). Introducing brokers help increase efficiency and lower the work load for futures commission merchants.
How are stock brokers regulated by the SEC?
Stock brokers are registered with the Securities and Exchange Commission (SEC) and are regulated by the Financial Industry Regulatory Authority (FINRA). 1 Futures introducing brokers are registered with the Commodity Futures Trading Commission (CFTC) and regulated by the National Futures Association (NFA). 2