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Introducing Broker

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Introducing Broker
A person or business that provides investing advice or counsel to an investor, but does not actually handle transactions. Generally speaking, introducing brokers make recommendations while delegating the task of executing trades to someone at the same or a different firm who operates on a trading floor. The introducing broker and the person(s) who execute a transaction split the fees and commissions according to some agreed upon arrangement. The term most often applies to brokers in the futures market.

Introducing broker (IB). 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.

The clearing firm, not the introducing broker, receives payments and securities from the clients and handles record-keeping. 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.

In commodities markets, an introducing broker is an intermediary who takes orders for futures contracts but passes on responsibility for executing the orders and handling the financial arrangements to a futures commission merchant (FCM).



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While the proposal focuses on depository institutions, broker-dealers in securities, mutual funds, futures commission merchants and introducing brokers in commodities, the proposed rule and guidance could have broader implications for mortgage bankers.
Hence, they would make money from you by posing as an introducing broker.
An Introducing Broker may accept your orders and transmit them for execution to a Futures Commission Merchant with which the Introducing Broker has a relationship.
 
 
 
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