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Interactive Brokers Group Strength and Security


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).




Important Strength and Security Facts about Interactive Brokers Group1


  • On a consolidated basis, IBG LLC exceeds $9 billion in equity capital, over $6.0 billion in excess of regulatory requirements.
  • IBG LLC's owners are our public company, Interactive Brokers Group, Inc. (18.5%) and the firm's employees and their affiliates (78.2%). 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.
  • We manage our brokerage and market making businesses in separate companies, which are registered with local securities and/or commodities regulators. We maintain strict systematic and procedural separation between the two business lines and we do not commingle or utilize client-segregated assets for proprietary operations. Although certain affiliates of IBKR trade for their own account, our client-facing businesses do not conduct proprietary trading. We have completed the winding down of the bulk of our market making operations.
  • We hold no material positions in over-the-counter securities or derivatives. We hold no CDOs, MBS or CDS.
  • Our positions are marked to market daily and the resulting payables/receivables are reconciled to outside sources automatically.
  • 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.
  • IBG LLC reported $1.2 billion of pretax profit for 2019.
  • IBG LLC have no long-term debt.
  • Interactive Brokers LLC is rated 'BBB+'; Outlook Positive by Standard & Poor's

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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. All numbers reported as of March 31, 2020.