Interactive Brokers Group Stock

Interactive Brokers Group, Inc. (IBG, Inc.) is an automated global electronic broker.

The company custodies and services accounts for hedge and mutual funds, exchange-traded funds ('ETFs'), registered investment advisors, proprietary trading groups, introducing brokers and individual investors. The company specializes in routing orders and executing and processing trades in stocks, options, futures, foreign exchange instruments ('forex'), bonds, mutual funds, ETFs and precious metals on more than 150 electronic exchanges and market centers in 34 countries and 27 currencies seamlessly around the world.

In addition, the company's customers can use its trading platform to trade certain cryptocurrencies through third-party cryptocurrency service providers that execute, clear and custody the cryptocurrencies. In the United States of America ('U.S.'), the company conducts its business primarily from its headquarters in Greenwich, Connecticut and from Chicago, Illinois. Abroad, the company conducts its business through offices located in Canada, the United Kingdom, Ireland, Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia.

IBG, Inc. is a holding company whose primary asset is the ownership of approximately 25.4% of the membership interests of IBG LLC, the current holding company for the company's businesses. IBG, Inc. is the sole managing member of IBG LLC.

As an electronic broker, the company executes, clears and settles trades globally for both institutional and individual customers. Capitalizing on the company's proprietary technology, the company's systems provide its customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost in multiple products and currencies from a single unified platform. The company offers its customers access to all tradable classes of primarily exchange-listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals and cryptocurrencies traded on more than 150 electronic exchanges and market centers in 34 countries and in 27 currencies seamlessly around the world.

The company has grown to approximately 2.6 million institutional and individual brokerage customers. The company provides its customers with one of the most effective and efficient electronic brokerage platforms in the industry.

The company is able to provide its customers with high-speed trade execution at low commission rates, in large part because of the company's proprietary technology. As a result of the company's advanced electronic brokerage platform, the company is especially attractive to sophisticated and active investors.

The company's customers can choose the following trading platforms to match their trading style and expertise:

IBKR Trader Workstation (TWS) - The TWS is the company's flagship desktop trading platform, designed for seasoned, active traders who trade multiple products and require power and flexibility. The TWS Mosaic interface provides intuitive out-of-the-box usability with quick and easy access to comprehensive trading, order management, chart, watchlist and portfolio tools all in a single, customizable workspace.

IBKR Mobile - The IBKR Mobile app provides experienced traders powerful trading tools and the same market-moving information as the company's desktop TWS trading platform. The company's mobile app provides the functionality needed to trade and manage accounts from anywhere.

IBKR Client Portal - The IBKR Client Portal is an easy-to-use web-based platform that requires no downloads. It gives customers access to every resource they need to view, trade and manage their account all with a single login.

IBKR GlobalTrader - The IBKR GlobalTrader is a streamlined mobile trading app to trade stocks, EFTs, options and cryptocurrencies worldwide. Customers can deposit in their local currency and trade stocks at 90+ exchanges and options at 30+ market centers around the world. Customers can also trade select U.S. ETFs around the clock, plus cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum and Litecoin, all from their mobile device.

IBKR APIs - For the company's more sophisticated customers, IBKR APIs allows them to build custom trading applications and automate any part of the trading process to their specifications. The company offers APIs for every experience level from its easy-to-use Excel API to the company's institutional grade FIX API.

The company's key product offerings include:

IBKR Pro is the core IBKR service designed for sophisticated investors. IBKR Pro offers the lowest cost access to stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals and cryptocurrencies from a single unified platform with no added spreads, ticket charges, account minimums or platform fees.

IBKR Lite provides unlimited commission-free trades on the U.S. exchange-listed stocks and ETFs and low-cost access to global markets without required account minimums or platform fees to participating the U.S. customers. IBKR Lite was designed to meet the needs of investors who are seeking a simple, commission-free way to trade the U.S. exchange-listed stocks and ETFs and do not wish to consider the company's efforts to obtain greater price improvement through the company's IB SmartRouting system.

IBKR Universal Account - From a single point of entry in their IBKR Universal Account, the company's customers are able to transact in 27 currencies, across multiple classes of tradable, primarily exchange-listed products traded on more than 150 electronic exchanges and market centers in 34 countries around the world seamlessly. The company's offering features a suite of cash management services, including:

Direct Deposit and Mobile Check Deposit - The company's Direct Deposit program allows customers to automatically deposit paychecks, pension distributions and other recurring payments to their (non-retirement) brokerage account with the company. In addition, the U.S. customers can use the company's Mobile Check Deposit to directly deposit checks drawn on a U.S. bank.

American Express International Dollar Card - The American Express International Dollar card allows non-U.S. residents to transact in U.S. dollars. Customers enjoy the convenience of paying their bills directly from their Interactive Brokers account. Available for eligible customers in Latin America and the Caribbean (excluding Puerto Rico and the U.S. Virgin Islands).

Request for Payment Service - Through this new banking service, the U.S. customers can make instant deposits, 24 hours a day, from their mobile banking app or other bank portal to fund their brokerage account with the company. Funds deposited via Request for Payment are immediately available for trading. The service is available to customers with accounts at several major U.S. banks and, over time, other banks will be added.

Insured Bank Deposit Sweep Program - The company's Insured Bank Deposit Sweep Program provides eligible customers with up to $2,500,000 of Federal Deposit Insurance Corporation ('FDIC') insurance on their eligible cash balances in addition to the existing $250,000 Securities Investor Protection Corporation ('SIPC') coverage for total coverage of $2,750,000. Customers continue earning the same competitive interest rates applied to cash held in their brokerage accounts with the company. The company sweeps each participating customer's eligible cash balances daily to one or more banks, up to $246,500 per bank, allowing for the accrual of interest and keeping within the FDIC protected threshold. Cash balances above $2,750,000 remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3.

Investors' Marketplace - The Investors' Marketplace is the first electronic meeting place that brings together individual investors, financial advisors, money managers, fund managers, research analysts, technology providers, business developers and administrators, allowing them to interact to form connections and conduct business.

Mutual Fund Marketplace - The Mutual Fund Marketplace offers the company's customers access to more than 48,000 mutual funds worldwide, including more than 19,000 no-transaction-fee funds from more than 550 fund families.

Bond Marketplace - The Bond Marketplace allows customers to search for the best yields from a vast universe of over one million bonds from issuers in the Americas, Europe and Asia. The company provides direct market access at a low cost to a wide array of corporate, government and municipal securities. The company's customers obtain competitive bids and offers with low, transparent commissions and no hidden mark-ups.

Cryptocurrency - Customers, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through Paxos Trust Company or Zero Hash LLC, which execute, clear and custody the cryptocurrencies, alongside other asset classes on a single unified platform. In Hong Kong, customers can trade and hold BTC and ETH in their account with Interactive Brokers Hong Kong Limited ('IBHK').

Fractional Trading - Fractional Trading allows customers to buy and sell any eligible U.S., Canadian, or European stocks (or ETFs, where available), using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share. With fractional shares, there is no minimum for European shares and customers can invest in the U.S. shares with as little as $1.00. This functionality allows customers to experiment with trading and investing without committing substantial sums of money and learn about building and rebalancing diversified portfolios.

The U.S. Spot Gold - Customers can trade the U.S. Spot Gold alongside other asset classes from a single unified platform. In addition, the company's customers have access to efficient pricing in quantities as small as one ounce and can request physical delivery of their U.S. Spot Gold position.

No Transaction Fee Program for Exchange-Traded Funds - The company offers a no transaction fee program for ETFs that reimburses IBKR Pro customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days.

Event Contracts - IBKR EventTrader is the company's web-based platform for trading event contracts on select CME futures markets. IBKR EventTrader allows customers to trade their opinion about a specific question with a 'yes' or 'no' outcome.

Overnight Trading Hours - Customers can trade over 10,000 U.S. stocks and ETFs nearly 24 hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time. It also provides customers in Asia with access to the U.S. Equity markets during their trading day.

For all customers, the company's platform offers:

Low Costs - The company provides its customers with among the industry's lowest overall transaction costs in two ways. First, the company offers among the lowest execution, commission and financing costs in the industry. Second, the company's IBKR Pro customers benefit from the company's advanced routing of orders designed to achieve the best available trade price. In addition, customers earn interest on their uninvested cash balances above $10,000 (or the equivalent in foreign currency).

IB SmartRouting - IB SmartRouting retains control of the customer's order, continuously searches for the best available price and, unlike most other routers, dynamically routes and re-routes all or parts of a customer's order to achieve optimal execution and among the lowest execution and commission costs in the industry. The company offers Transaction Cost Analysis reporting to allow customers to track execution performance using multiple criteria. The company's IBKR Pro customers benefit from the company's advanced order routing technology for all trades, while the company's IBKR Lite customers benefit from this technology for their trades in products not eligible for IBKR Lite.

Automated Risk Controls - Throughout the trading day, the company calculates margin requirements for each of the company's customers on a real-time basis across all product classes and across all currencies. The company's customers are alerted to approaching margin violations and if a customer's equity falls below what is required to support that customer's margin, the company attempts to automatically liquidate positions to bring the customer's account into margin compliance. This is done to protect the company, as well as the customer, from excessive losses.

Flexible and Customizable System - The company's platform is designed to provide an efficient customer experience, beginning with a highly automated account opening process and continuing through fast trade execution and reporting. The company's sophisticated interface provides interactive real-time views of account balances, positions, profits or losses, buying power and 'what-if' scenarios to enable the company's customers to more easily make informed investment decisions and trade effectively. The company's system is configured to remember the user's preferences and is specifically designed for multi-screen systems. When away from their main workstations, customers can conveniently access their accounts through the company's IBKR Mobile platforms.

Securities Financing Services - The company offers a suite of automated Stock Borrow and Lending tools, including the company's depth of availability, transparent rates, global reach and dedicated service representatives. In addition, the company's Stock Yield Enhancement Program allows its customers to lend their fully-paid stock shares to the company in exchange for cash or the U.S. Treasury securities collateral. In turn, the company lends these stocks in exchange for collateral and earn stock lending fees. The company pays its customers interest on the collateral value generally equal to 50% of a market-based rate for lending the shares. This allows customers holding fully-paid long stock positions to enhance their returns.

Block Trade Desk - The company offers broker-assisted trading through its Corporate Bond and Stock and Option block order desks. The desks help traders execute large or complex orders and monitor trades when customers are unable to do so. The desks source liquidity, bring SPX color from the pit, offer price discovery services, and help customers calibrate and execute complex algo trading strategies.

IBKR Campus - IBKR Campus helps customers learn about the markets, products, and tools available through the company's platforms. IBKR Campus offers self-directed courses at the Traders' Academy; live and recorded webinars; the company's Traders' Insight market commentary blog; IBKR Podcasts, a podcast series featuring interviews with financial industry thought leaders; the IBKR Quant Blog; IBKR-API, the source for all IBKR API documentation; and the Student Trading Lab, which allows educators to bring real-world trading experiences to their classroom. In addition, the company provides content to Coursera, an online provider of learning content, for a certificate program called Practical Guide to Trading.

Promotional offerings include:

IBKR Refer a Friend Program - Under the Refer a Friend program, the company encourages existing customers to refer friends and family to IBKR. The referring customer can earn a flat fee payment of $200 while the new customer can receive up to $1,000 in IBKR stock. The specific program details and eligibility requirements are described on the company's website.

Analytical offerings on the company's platform include:

IBKR GlobalAnalyst - The company's IBKR GlobalAnalyst tool, designed for investors who are interested in international portfolio diversification, helps find new opportunities to diversify an investor's portfolio and discover undervalued companies that may have greater growth potential. The relative value of global stocks by region, country, industry or individually can be compared, and metrics displayed in one of 31 currencies. IBKR GlobalAnalyst can search across business sectors and allows for filtering by region, country and market capitalization.

PortfolioAnalyst - The company's PortfolioAnalyst reporting tool allows customers to consolidate, track and analyze their portfolios, offering multi-custody solutions, advanced reporting, global support, benchmarks, risk metrics, GIPS verified returns and powerful on-the-go analytics. PortfolioAnalyst can consolidate data from a customer's investment, checking, savings and annuity accounts, as well as incentive plans, credit card accounts, mortgages and student loans.

IB Risk Navigator - The company offers to all customers its real-time market risk management platform that unifies exposure across multiple asset classes around the globe. The system is capable of identifying overexposure to risk by starting at the portfolio level and drilling down into successively greater detail within multiple report views. Report data is updated every ten seconds or upon changes to portfolio composition. Predefined reports allow the summarization of a portfolio from different risk perspectives, providing views of Exposure, Value at Risk ('VaR'), Delta, Gamma, Vega and Theta, profit and loss, and position quantity measures. The system also offers customers the ability to modify positions through 'what-if' scenarios that show hypothetical changes to the risk profile.

Portfolio Builder - Portfolio Builder supports the company's customers in setting up an investment strategy based on research and rankings from top buy-side providers and fundamental data; use filters to define the universe of equities that will comprise their strategy and back-test their strategy using up to three years of historical performance; work in hypothetical mode to adjust the strategy until the historical performance meets their standards; and with the click of a button let the system create the orders to invest in a strategy and track its performance in their portfolio.

Securities Lending Dashboard - The Securities Lending Dashboard is designed to help customers assess the short-selling activity for specific securities and inform trading decisions. The dashboard allows sophisticated individual and institutional investors, including hedge funds, to view an expanded universe of securities lending data across key metrics. The Securities Lending Dashboard complements IBKR's Securities Loan and Borrow system, which is a fully electronic and actionable self-service utility that lets customers search for availability of shortable securities from within IBKR trading platforms at no cost.

Interactive Analytics and IB Option Analytics - The company offers its customers state-of-the-art tools, which include a customizable trading platform, advanced analytic tools and over 100 sophisticated order types and algorithms. The company also provides a real-time option analytics window that displays values reflecting the rate of change of an option's price with respect to a unit change in each of several risk dimensions.

Probability Lab - The Probability Lab provides customers with an intuitive, visual method to analyze market participants' future stock price forecasts based on current option prices. This tool compares a customer's stock price forecast versus that of the market and scans the entire option universe for the highest Sharpe ratio multi-leg option strategies that take advantage of the customer's forecast.

Goal Tracker - Interactive Advisors' Goal Tracker projects the hypothetical performance of a portfolio and monitors how likely it is the portfolio might achieve the goal. Customers can adjust inputs, such as monthly contribution amount, goal target date, or the cost or outflow associated with the goal, to estimate the likelihood of achieving a goal.

Sustainable Investing Tools

IMPACT by Interactive Brokers - IMPACT by Interactive Brokers ('IMPACT App') is a unique, simple and intuitive mobile app that helps customers easily align their investment portfolio with their values. The IMPACT App allows customers to select their personal investment criteria from thirteen impact values and principles, and also allow customers to exclude investments based on business practices they would like to avoid.

Carbon Offsets - Using the IMPACT App, the U.S. customers can offset their carbon emissions by purchasing carbon offsets and can use the Carbon Offsets tool to select from either greenhouse-gas emitting activities related to household, transportation and food, or enter a specific amount of carbon to offset. The company sources and retires the carbon credits at the appropriate registries enabling customers to fully or partially offset their carbon footprints.

Charitable Giving - IBKR GIVE supports the U.S. customers in making charitable donations directly from the IMPACT App. Using a comprehensive directory of U.S. charities and non-profit organizations from GuideStar by Candid, IBKR GIVE lets customers easily donate to a charity matching their values, or search for a non-profit organization of their choice.

Impact Dashboard - The Impact Dashboard helps customers to evaluate and invest in companies that align with their values. Customers can select the values they care about from a list ranging from clean air to consumer safety and racial equality, and measure how both individual securities and their overall portfolio measure up against their criteria.

ESG Scores - ESG Scores from Refinitiv give customers a new set of tools for making investment decisions based on more than just financial factors. Companies are scored along several dimensions, such as reducing emissions and supporting human rights, and customers can easily see how companies rank both overall and on each dimension.

The company caters to various customer groups with specific service needs.

For advisors, the company offers:

Model Portfolios - Model Portfolios offer advisors an efficient and time-saving approach to investing customer assets. They allow advisors to create groupings of financial instruments based on specific investment themes, and then invest customer funds into these models.

IBKR Allocation Order Tool - The IBKR Allocation Order Tool streamlines the creation, execution and allocation of group orders. The tool provides advisors with a single screen to enter trade allocations quickly across many customer accounts, advisors or strategies; allocate total quantity or cash quantity for user-specified values proportionally or equally; and modify orders or allocations on the fly. In addition, customers can use the Allocation Order Tool to project, preview and allocate trades to take advantage of potential capital losses for all or some of an advisor's invested customers.

ESG Impact Profile - The ESG Impact Profile helps advisors understand customer preferences for socially responsible and impact investing. Advisors' customers can select personal investment criteria from thirteen impact values and principles and exclude investments based on ten categories.

IBKR Client Risk Profile - IBKR Client Risk Profile is designed to help advisors determine the most suitable investments for their customers, based on each customer's risk tolerance. This information is collected through a custom-designed questionnaire. Advisors can view the scores through the Advisor Portal and create custom pre-trade allocation groups and profiles in Trader Workstation to place orders and allocate trades for customers with similar risk profiles.

Custom Indexing - Custom Indexing allows advisors to create custom portfolios for their customers that directly hold the underlying securities of an index, rather than purchasing a traditional index fund. This gives advisors the ability to customize portfolios to align with specific investment objectives.

Employee Plan Administrator SIMPLE IRA - The Employee Plan Administrator account allows the U.S. advisors to offer self-employed individuals and companies of less than 100 employees a Savings Investment Match Plan for Employees Individual Retirement Account ('SIMPLE IRA').

Tax Loss Harvesting - IBKR's Tax Loss Harvest tool helps advisors to potentially reduce their customers' tax liabilities by harvesting losses across multiple assets for multiple customers at the same time.

For introducing brokers and advisors, the company offers:

White Branding - The company's large financial advisor and broker-dealer customers may 'white brand' the company's trading interface, account management and reports with their firm's identity. Broker-dealer customers can also select from among the company's modular functionalities, such as order routing, trade reporting or clearing, on specific products or exchanges where they may not have up-to-date technology to offer to their customers a complete global range of services and products.

Streamlined Client Service Program - The Streamlined Client Service Program offers a new level of service for brokers and advisors who want to handle tasks for their customers, with a simplified process for approving funding requests and signing agreements. The full list of available tasks includes authorization to update or change account information, account settings, trading permissions, tax forms, banking and transfer instructions; authorization to vote shares and make elections regarding positions; authorization for special programs and alternative investments; and request to send electronic notices, confirmations, account statements and certain communications only to the broker or advisor.

For customers looking for online advisory services, the company offers:

Interactive Advisors - Interactive Advisors recruits registered financial advisors, vets them, analyzes their investment track records, and groups them by their risk profile. Investors who are interested in having their individual accounts robo-traded are grouped by their risk and return preferences. Investors can assign their accounts to be traded by one or more advisors. Interactive Advisors also offers the company's customers Smart Beta Portfolios which combine the benefits of actively managed fund stock selection techniques with passive ETFs low-cost automation to provide broad market exposure and potentially higher returns, as well as Socially Responsible Investing.

Transaction Processing

The company's transaction processing is automated over the full life cycle of a trade. The company's fully automated IB SmartRouting system searches for the best possible combination of prices available at the time a customer order is placed and immediately seeks to execute that order electronically or send it where the order has the highest possibility of execution at the best price. The company's market making software generates and disseminates to the exchanges and market centers, in which the company still operates, continuous bid and offer quotes on tradable, exchange-listed products.

When an order is executed, the company's systems capture and deliver this information back to the source, either to the customer via the brokerage system or to the market making system, generally within a fraction of a second. Simultaneously, the trade record is written into the company's clearing system, where it flows through a chain of control accounts that allow the company to reconcile trades, positions and money until the final settlement occurs. The company's integrated software tracks other important activities, such as dividends, corporate actions, options exercises, securities lending, margining, risk management and funds receipt and disbursement.

IB SmartRouting

IB SmartRouting searches for the best destination price in view of the displayed prices, sizes and accumulated statistical information about the behavior of market centers at the time an order is placed, then immediately seeks to execute that order electronically. Unlike other smart routers, IB SmartRouting never relinquishes control of the order, and constantly searches for the best price. It continuously evaluates fast-changing market conditions and dynamically re-routes all or parts of the order seeking to achieve optimal execution. For example, for the U.S. options, IB SmartRouting can represent each leg of a spread order independently, if needed, and in that event enters each leg at the best possible venue. IB SmartRouting Autorecovery re-routes a customer's U.S. options order in the case of an exchange malfunction, and the company absorbs the risk of double executions. In addition, IB SmartRouting checks each new order to see if it could be executed against any of its pending orders in the company's automated trading system ('ATS'). As the system continues to gain more users, IB SmartRouting and the IBKR ATS facilities become more important for customers in a world of multiple exchanges, market centers and penny-priced orders because it increases the possibility of best possible executions for the company's customers ahead of customers of other brokers. As a result of this feature, the company's customers have a greater chance of executing limit orders and can do so sooner than those who use less sophisticated routers.

Clearing and Margining

The company's activities in the U.S. are entirely self-cleared. The company is a clearing member of OCC (formerly known as the Options Clearing Corporation), The Depository Trust and Clearing Corporation, the Chicago Mercantile Exchange Clearing House, and ICE Clear U.S. In addition, the company is fully or partially self-cleared in Canada, the United Kingdom, Switzerland, France, Germany, Belgium, Austria, the Netherlands, Spain, Norway, Sweden, India, Hong Kong, Japan and Australia.

Customers

The company's customers primarily fall into two groups based on services provided, both of which take advantage of the company's low commissions, as well as the company's best price execution. Cleared customers, the large majority of the company's customers, use the company's trade execution and clearing services, low financing rates, high interest paid (when available) and, under the company's IBKR Lite offering, commission-free trades. Non-cleared customers use the company's trade execution services while choosing to clear with another prime broker or a custodian bank.

The company services approximately 2.56 million cleared customer accounts and have customers residing in over 200 countries and territories around the world. The company's target customer is one who requires the latest in trading technology and worldwide access, and who expects low overall transaction and financing costs and market rate interest on idle cash balances. The company's customers are mainly consisted of individuals, trading desk professionals, electronic retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access.

Regulation

As registered U.S. broker-dealers, Interactive Brokers LLC ('IB LLC'), IBKR Securities Services LLC ('IBKRSS') and Interactive Brokers Corp. are subject to the rules and regulations of the Exchange Act, and as members of various exchanges, the company is also subject to such exchanges' rules and requirements. Additionally, IB LLC is subject to the Commodity Exchange Act and rules promulgated by the Commodity Futures Trading Commission ('CFTC') and the various commodity exchanges of which it is a member. The company is also subject to the requirements of various self-regulatory organizations such as the Financial Industry Regulatory Authority ('FINRA'), the Chicago Mercantile Exchange ('CME') and the National Futures Association ('NFA'). The company's foreign subsidiaries are similarly regulated under the laws and institutional frameworks of the countries in which they operate.

As certain of the company's subsidiaries are members of FINRA, the company is subject to certain regulations regarding changes in control of the company's ownership.

IB LLC is subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act and to the CFTC's minimum financial requirements (Regulation 1.17) under the Commodities Exchange Act. Additionally, Interactive Brokers Canada Inc. ('IBC') is subject to the Canadian Investment Regulatory Organization ('CIRO') risk adjusted capital requirement; Interactive Brokers (U.K.) Limited ('IBUK') is subject to the United Kingdom's ('U.K.') Financial Conduct Authority ('FCA') financial resources requirement; Interactive Brokers Ireland Limited ('IBIE') is subject to the Central Bank of Ireland ('CBI') financial resources requirement; IBKR Financial Services AG ('IBKRFS') is subject to the Swiss Financial Market Supervisory Authority ('FINMA') eligible equity requirement; Interactive Brokers Central Europe Zrt. ('IBCE') is subject to the Hungarian National Bank ('MNB') financial resource requirement; Interactive Brokers (India) Private Limited ('IBI') is subject to the National Stock Exchange of India net capital requirements; Interactive Brokers Hong Kong Limited ('IBHK') is subject to the Hong Kong Securities and Futures Commission ('SFC') financial resource requirement; Interactive Brokers Securities Japan, Inc. ('IBSJ') is subject to the Japanese Financial Services Agency ('FSA') capital requirements; Interactive Brokers Singapore Pte. Ltd. ('IBSG') is subject to the Monetary Authority of Singapore ('MAS') capital requirements; and Interactive Brokers Australia Pty Limited ('IBA') is subject to the Australian Securities Exchange ('ASX') liquid capital requirement.

To conduct customer activities, IB LLC is obligated under rules mandated by its primary regulators, the SEC and the CFTC, to segregate cash or qualified securities belonging to customers. In accordance with the Securities Exchange Act of 1934, IB LLC is required to maintain separate bank accounts for the exclusive benefit of customers. In accordance with the Commodity Exchange Act, IB LLC is required to segregate all monies, securities and property received from commodities customers in specially designated accounts. IBC, IBUK, IBIE, IBCE, IBI, IBHK, IBSJ, IBSG and IBA are subject to similar requirements within their respective jurisdictions.

The SEC, CFTC, foreign regulators, and the various exchanges and self-regulatory organizations, of which the company's operating subsidiaries are members, have passed numerous AML and customer due diligence rules.

As required by the USA Patriot Act and other rules, the company has established comprehensive AML and customer identification procedures, and designated AML Compliance Officers for each electronic brokerage subsidiary; and the company provides formal AML training to the company's AML, customer facing, and other relevant employees, and conduct regular independent audits of the company's AML programs. The company's AML screening is conducted using a mix of automated and manual reviews and has been structured to comply with regulations in various jurisdictions. The company collects required information through its new account opening process and screen accounts against databases for the purposes of identity verification and for review of potential negative information and appearance on government sanction lists, including the Office of Foreign Assets and Control, Specially Designated Nationals and Blocked Persons lists and several other global, United Nations, European Union ('EU') and other non-U.S. sanction lists. Additionally, the company has designed and implemented restrictions to prevent certain types of high-risk activity, including potentially manipulative patterns of trading or higher risk patterns of money movement. The company generates and reviews a sophisticated suite of surveillance reports and queues to identify potential money laundering, market manipulation or abuse, fraud and other suspicious activities.

The company's international subsidiaries are subject to extensive regulation in the various jurisdictions where they have operations. The most significant of the company's international subsidiaries are: IBC, registered to do business in Canada as an investment dealer; IBUK, registered to do business in the U.K. as a broker; IBIE, registered in Ireland as an investment firm; IBKRFS, registered to do business in Switzerland as a securities dealer; IBCE, registered in Hungary as an investment firm; IBI, registered to do business in India as a stock broker; IBHK, registered to do business in Hong Kong as a securities dealer; IBSJ, registered in Japan as a financial instruments firm; IBSG, registered in Singapore as a capital markets firm; and IBA, registered to do business in Australia as a securities dealer and futures broker.

History

Interactive Brokers Group, Inc. was founded in 1977. The company was incorporated in 2006.