Financial Strength - Strength and Security

Strength and Security

STRENGTH AND SECURITY

Financial Strength

Strength and Security

Financial Strength

When placing your money with a broker, you need to make sure your broker is secure and can endure through good and bad times. The financial statements of Interactive Brokers LLC are available on our website for your review.

Note that Interactive Brokers LLC and its affiliates are owned by Interactive Brokers Group (IBG LLC).

In a recent interview, Thomas Peterffy, Founder and Chairman of the Board of Directors, shared his views on the current state of financial markets, including rising interest rates and their impact on Interactive Brokers. He also discussed IBKR's interest rates on instantly available cash balances and how clients are positioned to navigate the current environment.

March 13, 2023 | 8:08 PM EDT

CNBC interview with Thomas Peterffy

Watch Video



Important Strength and Security Facts about Interactive Brokers Group1


  • IBKR IS NOT A BANK, and as a regulated securities broker dealer, we cannot carry securities classified as HTM (Held To Maturity), which are not required to be marked to market on a bank's books. We also cannot make unsecured, long-term loans.
  • The only kind of loans we can make are margin loans fully secured by marketable securities.
  • Our real-time margining system marks all client positions to market continuously. All orders are credit vetted before being executed and positions in accounts with inadequate margin deposits are liquidated automatically.
  • ALL of our positions are marked to market daily and the resulting payables/receivables are reconciled to outside sources automatically.
  • IBKR invests cash in very short-term investments maturing within a few months. We hold no material positions in over-the-counter securities or derivatives. We hold no CDOs, MBS or CDS.

  • On a consolidated basis, IBG LLC has $14.1 billion in equity capital, over $9.7 billion in excess of regulatory requirements.
  • IBG LLC's owners are our public company, Interactive Brokers Group, Inc. (25.4%) and the firm's employees and their affiliates (74.6%). Unlike at most other firms, where management owns a relatively small share, we participate substantially in the downside just as much as in the upside. Because of this vested interest, we run our business conservatively.
  • IBG LLC reported $3.069 billion of pretax profit for 2023.
  • IBG LLC has no long-term debt.
  • Interactive Brokers LLC is rated "A- Outlook Stable" by Standard & Poor's. S&P Rating Report.
  • Interactive Brokers LLC's financial statements, which reflect the mark to market profit/loss on all securities positions, are submitted monthly to its regulators in its FOCUS report. View latest report.



Important Strength and Security Facts about Interactive Brokers Central Europe Zrt. ("IBCE")1


How We Handle Client Assets


Client money is segregated in special bank or custody accounts, which are designated for the exclusive benefit of clients of IBCE. Statutory Instrument. No. 604/2017 - Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2017 is the governing legislation in Central Europe for Client Assets. There are 7 core Client Asset principals.

  • Segregation – distinguishing Client Assets from Company Assets.
  • Designation and Registration – correctly titled accounts to include the term "Client Asset" within the account name.
  • Daily Reconciliation – relevant for all Client Asset accounts.
  • Daily Calculation – ensures that Client Assets (client funds & client financial instruments) match IBCE’s internal accounting records.
  • Client Disclosure & Client Consent – applicable to all clients.
  • Risk Management - qualified personnel and internal procedures and plans are in place to safeguard Client Assets.
  • Client Asset Examination – annual external review by independent body.

By properly segregating the client's assets, if no money or stock is borrowed and no futures positions are held by the client, then the client's assets are available to be returned to the client in the event of a default by or bankruptcy of the broker.

Client funds are deposited in pooled accounts, with a variety of reputable banks located both within and outside the EEA. This affords a greater level of protection to our clients, by reducing the concentration risk associated with depositing client funds with a small number of banks.





Accounts with Investment Loans


For clients who borrow money from IBCE to purchase securities, IBCE will utilise, for financing purposes, up to 100% of the loan value of the stock these clients hold with IBCE. In simple terms, IBCE borrows money from a third party (such as a bank or broker-dealer), using the client's margin stock as collateral, and it lends those funds to the client to finance the client's margin purchases.

Disclosure
  1. Information as of December 31, 2023. "Interactive Brokers Group" and "IBKR" include the Group's operating subsidiaries.