Industry Guide
What Is an Introducing Broker?
An introducing broker (IB) is a firm or individual that solicits and accepts orders for futures, options on futures, retail forex, or swaps — but doesn't hold customer money. Instead, an IB “introduces” its customers to a futures commission merchant (FCM), which holds the funds, clears the trades, and carries the account.
A guide from the National Introducing Brokers Association · Updated October 2026
The short answer
- An IB registers with the CFTC and must be a member of NFA, the industry's self-regulatory organization.
- An IB never holds customer funds — those stay with the FCM, segregated from the FCM's own money.
- An IB qualifies either independently, with its own capital, or under a guarantee agreement with an FCM.
- IBs work alongside related registrants — FCMs, CTAs, CPOs, and associated persons — all overseen by the same regulators.
How an introducing broker works
Think of the IB as the customer-facing half of a brokerage relationship. The IB finds and services clients — opening accounts, answering questions, and taking orders — while the FCM handles the money: holding margin deposits, executing and clearing trades, issuing statements, and carrying the account.
The arrangement lets independent brokers build their own practices without the capital and infrastructure it takes to run a clearing firm. IBs are typically compensated through commissions or a negotiated share of the fees their customers' trading generates, paid through the carrying FCM.
- Step 1
Customer
Opens an account and places orders through the introducing broker.
- Step 2
Introducing Broker
Solicits and services the account and accepts orders — but never holds the customer's money.
- Step 3
FCM
Holds customer funds in segregated accounts, executes and clears trades, and carries the account.
- Step 4
Exchange & Clearinghouse
Lists the contracts, matches buyers and sellers, and guarantees settlement of every trade.
Independent vs. guaranteed IBs
Every IB has to show regulators it can stand behind its obligations, and the rules allow two ways to do it. The choice shapes how the business operates — and it's why you'll see members of NIBA's broker directory listed as IIBs (independent) or GIBs (guaranteed).
| Independent IB (IIB) | Guaranteed IB (GIB) | |
|---|---|---|
| How it qualifies | Maintains its own adjusted net capital | Signs a guarantee agreement with an FCM (NFA Form 1-FR-IB Part B) |
| Minimum capital | $45,000 adjusted net capital under CFTC Regulation 1.17 — and NFA expects new applicants to show at least $50,000 | None — the guaranteeing FCM stands behind the IB |
| Financial reporting | Files periodic financial reports with NFA, including certified annual statements | Exempt from net capital and financial reporting requirements |
| Where business goes | Free to introduce customers to more than one FCM | Generally introduces all of its business to the guaranteeing FCM |
| Accountability | Answers for its own compliance | The guaranteeing FCM can also be disciplined for the IB's NFA rule violations |
| Typical fit | Established firms that want flexibility across clearing relationships | Newer or smaller firms that want a lighter regulatory footprint |
Who's who in the futures industry
The IB is one of several registration categories under the Commodity Exchange Act. Many firms hold more than one — and NIBA represents introducing brokers, CTAs, CPOs, and associated persons alike. About our membership.
Futures Commission Merchant
Accepts orders for futures, options, forex, or swaps and — unlike an IB — accepts money from customers to support them. FCMs must maintain at least $1,000,000 in adjusted net capital.
Introducing Broker
Solicits or accepts the same kinds of orders but does not accept money or other assets from customers. Independent or guaranteed, as described above.
Associated Person
An individual who solicits orders, customers, or customer funds — or supervises people who do — on behalf of an FCM, IB, CTA, CPO, or RFED. Generally must pass the Series 3 exam.
Commodity Trading Advisor
Advises others, for compensation or profit, on buying or selling futures, options, forex, or swaps — directly by managing accounts, or indirectly through newsletters, systems, or signals.
Commodity Pool Operator
Operates a commodity pool — a collective investment vehicle that combines participants' funds to trade derivatives — and solicits money for it.
Retail Foreign Exchange Dealer
Acts as the counterparty to off-exchange foreign currency transactions with retail customers.
Swap Dealer
Holds itself out as a dealer in swaps, makes a market in swaps, or regularly enters into swaps as an ordinary course of business.
The regulators
CFTC
Commodity Futures Trading Commission
The federal agency that regulates the U.S. derivatives markets. Created by Congress in 1974 under the Commodity Futures Trading Commission Act, its mission is to “promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.” The CFTC writes the rules — including the capital requirements above — and brings enforcement actions.
cftc.govNFA
National Futures Association
The industrywide self-regulatory organization for U.S. derivatives, designated by the CFTC in 1981 and operating since 1982. With few exceptions, CFTC-registered firms must be NFA members. NFA processes registrations, examines member firms, writes and enforces conduct rules, and offers arbitration for disputes.
nfa.futures.orgWhere futures meet securities
The SEC regulates the securities markets. Some firms are dual registrants — a securities broker-dealer that is also registered as an IB, for example — and answer to both regulators.Check before you trade
NFA's free BASIC lookup shows any firm's or individual's registration status, NFA membership, and regulatory history.
The exchanges
Futures and options trade on CFTC-registered exchanges known as designated contract markets, and every trade is backed by a clearinghouse that guarantees performance. The major U.S. venues:
CME Group
ChicagoThe world's leading derivatives marketplace, made up of four exchanges — CME, CBOT, NYMEX, and COMEX — covering equity indexes, interest rates, agriculture, energy, metals, and FX. Trades clear through CME Clearing.
Visit siteICE Futures U.S.
New YorkIntercontinental Exchange's U.S. futures market — home of the 'softs' (coffee, sugar, cocoa, cotton, and orange juice) and U.S. Dollar Index futures. ICE's global network also includes ICE Futures Europe, home of Brent crude.
Visit siteCboe Futures Exchange
ChicagoCboe's futures market (CFE), best known as the home of VIX futures — the benchmark way to trade expectations of U.S. stock-market volatility.
Visit siteMIAX Futures
MinneapolisFormerly the Minneapolis Grain Exchange (renamed in 2024), home of Minneapolis Hard Red Spring Wheat futures. Registered with the CFTC as both an exchange and a clearinghouse.
Visit siteHow to become an introducing broker
Registration runs through NFA. The broad strokes:
- 1
Pass the Series 3
Each sole proprietor and associated person generally must pass the National Commodity Futures Examination (Series 3) within the two years before applying.
- 2
Choose independent or guaranteed
Either capitalize the firm and prepare financial statements, or arrange a guarantee agreement with the FCM that will carry your customers' accounts.
- 3
Register through NFA
File Form 7-R for the firm and Form 8-R (with fingerprints) for each principal and AP, and apply for NFA membership. Application fees are currently $200 for the firm and $85 per principal or AP.
- 4
Build your compliance program
Applicants provide anti-money-laundering procedures and a source-of-assets letter, and members maintain written supervisory procedures, an information security program, and a business continuity plan.
- 5
Stay current
Registration is ongoing: annual dues and registration updates, periodic financial filings for independent IBs, promotional-material rules, and NFA examinations.
Further reading from the NIBA Journal
Special Alert: Introducing Brokers will be featured at FIA EXPO 2025
October 2025
CFTC Grants Certain AML Relief to IBs that do not introduce customers to FCMs
July 2019
Marketing and Promotional Material | Compliance Reminders from NFA
June 2023
NFA ISSP Amendments
March 2019
CFTC Further Narrows Regulation 4.7 Exemption for CTAs and CPOs
November 2024
NFA Launches Redesigned BASIC Tool
September 2019
Frequently asked questions
Does an introducing broker hold my money?
No. By definition, an introducing broker does not accept money or other assets from customers. Your funds are held by the futures commission merchant (FCM) that carries your account, in accounts segregated from the FCM's own money.
What is the difference between an introducing broker and an FCM?
Both can solicit and accept orders, but only an FCM accepts customer funds. The IB handles the customer relationship — opening accounts, service, and order-taking — while the FCM holds the money, clears the trades, and carries the account.
Is a guaranteed IB less safe than an independent IB?
Not inherently. The two structures meet the same regulatory obligation in different ways: an independent IB maintains its own capital, while a guaranteed IB is backed by an FCM that is accountable for it. In both cases, customer funds are held at the FCM, not the IB.
How can I check whether an introducing broker is registered?
Use NFA's free BASIC (Background Affiliation Status Information Center) lookup at nfa.futures.org. It shows a firm's or individual's registration status, NFA membership, and any regulatory or disciplinary history.
Can an introducing broker also be a CTA?
Yes. Many firms and individuals hold more than one registration — an IB that also advises on or manages trading accounts, for example, may also register as a commodity trading advisor.
How do introducing brokers get paid?
IBs are typically compensated through commissions or a negotiated share of the fees generated by their customers' trading, paid through the FCM that carries the accounts.
Looking for an introducing broker?
Search NIBA's directory of futures brokers and CTAs by state, or browse the FCMs, exchanges, and service providers that support them.
This guide is educational and isn't legal or regulatory advice. Requirements and fees change — confirm current rules with NFA and the CFTC before acting on them.
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